September 22, 2022
On Wednesday, Fed Chairman Powell, made it clear that “this time he was really serious,” about fighting inflation, as he lifted interest rates, by 3/4’s of a point. At first, the stock market shrugged the news off as expected. But then later in the day, as his words indicated that interest rates might continue to increase, until they reached 4 1/4% in the coming months, produced a late market sell off of almost 500 points.
Only two countries are fighting the inflation battle, by lowering interest rates, to stimulate their economies; China and Japan.
Although this is not investment advice, I continue to recommend for my hypothetical account, a high concentration in 3 month and 6 month Treasury Bills offering a low risk 3% return. For those with high risk tolerances and experience, I would talk to your advisors about some inverse funds on China, such as FXP ($46) and YANG ($20) The chart for FXP is showing a Golden Cross, where the 50 day average is breaking above the 200 day moving average.
Of course, the markets are oversold and may have already adjusted to the prospect of rising interest rates. So be very careful with whatever you do as the so-called “Plunge Protection Teams” can cause sudden and swift market short covering rallies.
My opinion about Bitcoin?
I still prefer Gold as a real store of value, with its 3000 year history of stability. It may turn out as the “George Costanza” investment idea of 2023. Doing the opposite of what the situation calls for.