The Art of the Fake Trade Deal – Ep. 527

Dow Jones closed above 29,000 today for the first time ever. Part of the impotence of this rally has been anticipation of the trade deal with China, but the majority of the rally is due to the policies of the Fed as it quietly returns to quantitative easing. The so-called good news of the trade deal is in the past and traders who were buying the rumors may start selling off on the facts. Especially since the facts of the trade deal didn’t even live up to the rumors.

The trade deal is a big fat disappointment that didn’t live up to Trump’s hype. It’s not even a real deal; it’s written as a bunch of suggestions that either party can back-out of at any time.

The deal is a double-win for China. It supposedly commits China to buying more food and energy from the U.S., but China ends up getting the commodities they need with an easy way to unload their U.S. treasuries before they collapse. The Fed will have to buy more treasuries and print more money, to keep interest rates from going up.

Gold market stronger now after the trade deal signed. Gold’s technicals haven’t looked like this since 2000 when the dot com bubble burst and gold’s bear market ended. Americans don’t see the gold bull market that foreigners do because gold has made a new high in every currency except the U.S. dollar and is outperforming foreign stock markets, but not the U.S. stock market.

Fed released a weak jobs report with a big loss of 12,000 manufacturing jobs. Americans are working less hours and getting paid less for the hours they work.

Boomberg wins the democratic debates by not showing up. Democratic presidential candidates are right about healthcare costs being too high, but they’re wrong about the reasons and solutions.