29. The Great Rotation of Cash into Stocks or Commodities?

Welcome to RIGGED, the podcast that helps you RIG the wealth game back in your favor. I’m Terry Sacka AAMS of Cornerstone Asset Metals.

(00:06):
This is RIGGED. I’m Terry Sacka. Today, we’re going to talk about the great rotation, the new monetary policy and the great rotation of cash as where it’s going to go related to stocks or commodities, because the big question is we’ve had this what 11, almost 12 years of economic expansion. And then of course, you know, the COVID-19 hit and we’re, we saw many collapse there, um, which didn’t work and then it came back. But a lot of that market move beyond just the money printing was because of the foregoing policies of low taxes and low regulation and the changes in the trade. But this is all going to change now, folks. So we’re going to talk about stocks and commodities today, stocks or commodities, and what this great rotation of money is all about. And you want to pay attention because it’s that rotation is where smart money moves.

(01:02):
It’s kind of like herding cattle. And there was a great piece done by, you know, Smith and Costa at Cresco capital, where they were discussing the rotation of currencies. And the bottom line folks is, you know, with this debt democratic sweep that took place. Um, and I, you know, you know, where I stand on that is the bottom line is we all know that there were millions and Trump probably got about 10 million more votes than they showed. Um, this is a very scary time for America. It, you know, as a Republic for the truth. And the fascinating thing is how many people, legislatively judges, politicians are all going in the same. What happened? What were they told or shown? Why are so many people in this country right now losing their soul and forgetting what the great constitution in the American experiment was for sovereignty and freedom of individuals?

(02:04):
I don’t know. Well, I have a lot of theory, but I’m not going to go there today. But with this big sweep that took place in the election, which, you know, I contend was definitely not legitimate. It was definitely rigged at the ultimate scale, but it’s, they got away with it. So bottom line financially is we’re about to experience even more of the double barrel, you know, fiscal and monetary stimulus that comes, I mean, what we saw in 2020 is nothing to what’s coming overwhelmingly today, such policies that are being put forward, not just the green new deal, but everything else in the stimulus they’re going to do for $2,000 checks, which Hey, bottom line is, I think it’s great. I’m glad they’re going to go. There have served to incite almost like an animal spirit towards the financial assets. Investors are already positioned. They’re all in on both and bonds in the UN the bottom line with all of that, as the U S is creating a highly imbalanced stock.

(03:08):
The problem is that the money printing kind of

(03:11):
Married with the fiscal spending and the bailouts and the baking bailouts is crashing head-on with an emerging commodity supply problem that will likely stir up rising inflation. I’m talking more than people realize, which is really bearish for both equities stocks and bonds get ready for an extremely volatile 20, 21, the year of reckoning for twin asset bubbles as the world attempts to emerge from the COVID 19 plan DEMEC and this is the world, not just the United States folks, the macro setup that’s taking place here. This is the, you know, the micro, the macro, the bigger and the smaller for self-reinforcing unwinding

(04:03):
For stocks

(04:04):
And a rise in commodities is almost akin to the 1920 period, the 1974 period, and the 2000 period on alongside of this trade. There are merely two sectors left in the us stock market and that’s

(04:21):
Energy and material. Those offers substantial value. We believe

(04:28):
The smart money is already rotating out of historically overvalued equities. I mean, come on folks, Tesla, Amazon, these stocks driving, they are a thousand plus on the price to earnings ratio. We used a block when it was 40 to one on a price to earnings ratio, and there were over a thousand, so they’re not realistic. It’s not real. We know the equity is overvalued and the bond market securities are undervalued in commodities. So equities and bonds are just, they’re just done, but yet commodities are extremely undervalued. So soon we’re going to see an absolute stampede kind of, of a reflexive, great rotation and funds. And we’re talking billions and billions and hundreds of billions and trillions that have to move. So eventually you’re going to find a moving in that direction. The fed basically is determined now, and they’re going to go along with all the other stimulus. That’s going to come out of this whole democratic controlled stuff to increase the rate of inflation and ease the record debt burden, because we need to do this in order to eat, you know, reduce the burden of debt and the interest we’re paying, dragging down our economic growth. The fiscal powers to be

(05:50):
B will be playing along. The politicians are all going to let in.

(05:54):
So inflation is indeed what we are likely to get. Long-term economic history always proved that the forces of rising wholesale and consumer prices cannot easily be brought BRAC under control of, uh, the, you know, by the central banks, once they get loose and they’re not meant to prices will rise to condition your sold condition, your idea that this is just normal, but it won’t be, we’re going to see extreme inflation folks and believe me I’m with you. We’re already have it. When it comes to go buying clothes, equipment, blenders, or anything for the home or anything, it’s so much more expensive than it

(06:37):
Used to be.

(06:39):
What we’re talking about here is the output gap. In recent

(06:43):
Years, it’s kind of like a paradox.

(06:46):
Really. It’s a paradox of holding inflation in check, as they always think they can do to the, you know, underachieving economy.

(06:58):
Well, what about the

(06:58):
Deflationary forces? They save the technological innovation in aging demographic. So that’s helping us well at this stage of the macro cycle. We’re in of inflation. It’s all about the input to gap, meaning the supply shortages of primary resources, wait until you see the food crisis that’s coming. But while the new economy has been enjoying kind of like a limelight in recent years, you know, the stage for a cost push inflation has been set due to the kind of the underinvestment in the old economy. Now, the policies, you know, makers, these politicians are about to pull out the biggest bazooka

(07:43):
Yet to boost the demand. The global

(07:47):
Full central banks have added a total of 9.1 trillion so far, and that’s not accounting. Off-book accounting of assets to their balance sheet in 2020. And to compare this, you know, this year’s monetary stimulus was three times the response we did and the massive, great depression crisis of 2008,

(08:11):
We

(08:12):
Also saw at least 25 trillion of newly issued debt worldwide, which is really a lot higher when you get into

(08:21):
Swaps.

(08:24):
Well, the value of all negative yielding bonds reach close to 18 trillion

(08:30):
In 2020

(08:33):
Believable stuff going on folks. This is why the banking system needed it. They, the central banks needed Trump out because he was a constitutionalist, bring the money, the power back to the people. And now that they got their people back in, which would be the, um, moldable calls I would call them. Then the Biden’s there to do his job. I don’t think he lasts more than a year. Anyway. I think Kamala Harris is president soon, but the point is they’re there to do the job of, of this great reset. The global central bank assets. They’ve added 9 trillion

(09:10):
In, in assets alone.

(09:12):
Now what’s interesting about this is with gold and silver closing. The past year up 25% in 50%, respectively miners are in paradise.

(09:22):
They have

(09:23):
Now reported this much pot miners have never reported this much positive, free cashflow. 60% of the newly generated capital was used to pay

(09:32):
Down debt, which was a largest

(09:35):
Quarterly amount in the history of the India.

(09:39):
This is good stuff. Folks.

(09:41):
The reason fundamental progress across the industry is in date

(09:46):
Negative. That minors are indeed in a new bull market. They’re ready to go

(09:55):
Gold and silver miners had taken care of so much debt. If you see the chart

(10:00):
On it, when

(10:02):
You see where a peak of gold happen back in 2011,

(10:07):
When it came into the short and long-term borrowing

(10:11):
Ray. Now we were in the largest repayment debt in history for these minors. And we’re seeing free cashflow explode, which is going to allow us to get busy on the skizzy. I call it and the supply chain, which we need. They already sold out of American gold Eagles already. And silver American Eagles have absolutely exploded for the first two weeks of the year. And the beauty of all of this, what it means to those. And we ask ourselves the question when the great rotation comes out of equity and starts going into commodities, you’re going to see an explosive move for gold and silver. And I won’t be surprised to see gold back up around $2,300 by the end of the year. And I won’t be surprised to see silver challenging the 40 to 50, just for the

(11:00):
A year, mind you, then we’re not over the

(11:03):
[inaudible] to look at, which makes us want to believe silver would be your better investment is the goal to silver ratio. Meaning how many ounces of silver does it take to buy one ounce of gold? Now during the crisis has shot up to one 20 and now is down to 71.

(11:22):
Now what’s interesting

(11:23):
Is it means it takes 71 ounces of silver to buy one ounce of gold, but it’s on a major trend line that goes back to 2011. It’s sitting on that trend line. And what that means folks is it’s going to break through. Well, I see a breaking through that trend line. Absolutely. Which means silver will be going up exponentially faster than gold. So gold could only go up maybe two or $400 an ounce, but silver is going to go up probably dollars an ounce. And when you put that in actual percentage terms, silver is going to be an unbelievable investment for 2021 over gold. And definitely commodities are going to be the investment to do. When you take a look at the details of the great rotation of cash out of the equities into come on at ease, we’re going to see them even going into things like natural gas, which is going to be explosive because of other factors.

(12:22):
I mean, I can only get any more than this that, you know, precious metals have always been the place to be. I mean, most people talk gold and silver, but you know, one thing I like to talk about, which just doesn’t resonate because most people don’t understand it was rhodium. Rhodium is near $20,000 an ounce. And when it was nearly $1,000 an ounce, I mean, talk about rate of return on an investment. Palladium has done very well, too. Golden silver is just had the monetary attachment, but it’s coming. So stay very focused folks because this rotation of cash is a very serious amount of money. And the problem is silver is a very small market. So once money starts flooding in there on the investment side, watch out for the price. I think 2021 is going to be an extraordinary year for commodities. And I would take very seriously getting yourself protected, properly, being in the right place. Cornerstone asset metals definitely is in position to take care of that for you, or at least help you understand it. And folks until then God bless each and every one of you, because there’s going to be a wild 2021.

 

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