Written by Bryan Lutz, Editor at Dollarcollapse.com:
Every Sunday morning I sit down to write a few thoughts.
Sometimes these thoughts end up being about life, other times they are on gold, geopolitical issues affecting the markets, or the economy.
Here are three thoughts for this morning:
1. US Stock Market valuations continue to push new all-time highs, more than any valuation in the past 120 years. Yet, hedge funds are continuing to bet AGAINST fear in the market. They think market valuations will go higher…
The last time stock market valuations were this high was 1929, just before the Great Depression.
Will there be a crash coming?
Maybe, but most hedge funds think not.
Somehow the net short position against the VIX, a measure for fear, uncertainty and doubt in the market is at its highest since 2022.
About 93,000 shorts…
2. It’s funny how people change their opinions so quickly after order is established, and the streets are safe.
In 2019, President Nayib Bukele of El Salvador took to the streets to make the country a safe place.
He claimed his own territory and then worked his way out from there. He fought crime. He fought gangs.
Then, following a deadly spree of 87 homicides in late March 2022—the worst since the civil war—Bukele declared a “war on gangs”.
He deployed mass amounts of military and police to arrest suspected gang members.
By the end of 2024, the country has arrested 84,000 people…
In prison, he gives them skills. Skills they can sell in the marketplace, but only after hardcore discipline.
Now El Salvador has a record low murder rate and has positioning itself as “the safest nation in the Western Hemisphere.”
It only took a few years.
After receiving flak for deploying the National Guard in California, Trump is starting, at home, in DC.
Not to the same extent, but…
After only three weeks, he’s receiving praise from the Mayor of Washington D.C.
Violent crime has dropped 45% in 3 weeks.
She says, “We greatly appreciate the federal surge of officers. For carjackings, the difference between this 20-day period and last year, represents an 87% reduction.”
Now, if we could just get some of that in Canada.
Speaking of Canada…
3. It looks like Trump is winning. Canada’s new Prime Minister promised a lot of “elbows,” but there are none to be seen.
And that means, Canada is importing more value (goods, services, income payments) than it’s exporting. So it’s a net borrower from the rest of the world.
It looked as though that was changing around late 2021, but with Canada’s new Prime Minister, Mark Carney losing the battle against Trump’s tariffs its hit a new 25-year low.
Meanwhile, Carney is on vacation for an extended Summer.
Carney advised the governor general to dissolve Parliament shortly after taking office on March 14, 2025, and the House of Commons was adjourned for the summer without passing a budget, as he decided to delay the federal budget until the fall.
As a former Governor of the Bank of England, carrying a dual citizenship between Canada and Ireland, and a wife with a British passport, I assume he is seeing relatives on an island just north of France.
Happy Holidays.
I hear the beaches are lovely this time of year.
