Patrick Karim: Crippling Debt Loads will Crush Economies
Tom welcomes Patrick Karim back to the show to discuss his latest charts. Patrick is a proprietary capital manager and chart trader.
Patrick discusses the importance of gathering clues regarding the data in the charts. You want to get on the fastest train, so you can increase your assets. Always, wait for those break-outs before you envision those higher price targets. With equities, charts can show you what will happen before the public knows the latest fundamentals.
Patrick shows the SPX Chart priced against oil. We might expect the SPX to drop by over 90% compared with oil. Historically, the ratio can reach three to one relative to oil. Headline, attention-grabbing numbers don’t stick around for long, that’s probably when you want to be selling.
He notes we seem to be at a turning point in purchasing power similar to that of the 1970s. He notes how these periods compare with the price of silver. The destruction of purchasing power seems to be increasing faster than in the 1970s.
Lebanon’s currency has lost several thousand percent since 2019. It was priced at 1500 in 2019 and today is over 32000. By the time they get their money back, it will be worthless. This is why investors should have physical gold outside the system.
The long-term ten-year yield chart shows when one can expect a shift in gold. Currently, it appears we’re near or at the bottom for gold. It seems unlikely they can raise rates enough to break out of this 40 year pattern. Volatility has been steadily increasing.
We’re at the high water market for debt saturation. When we hit these types of levels, something important breaks. We appear to be once again at this type of level, and something could snap at any moment.
Time Stamp References:
0:00 – Introduction
1:45 – Find The Best Train
4:37 – Charts Vs. Fundamentals
7:05 – Perspective with Ratios
8:54 – SPX Priced in Oil
17:50 – Finding Correlations
19:50 – Purchasing Power
29:30 – Lebanon Currency
33:05 – Inflation Adj. Yields
39:35 – Debt Saturation Chart
47:00 – Breadding Out
47:23 – Gold, Silver Ratio
48:39 – Concluding Thoughts
Talking Points From This Episode
- Finding the clues in the charts from the price action.
- SPX Priced in oil and the possible outlook for equity markets.
- Purchasing power appears to have passed a key turning point.
- Why gold is at or near the bottom and why something key is about to break.
Patrick Karim is a proprietary capital manager and chart trader since 2006. Patrick’s background in commerce, psychology, and an ongoing career in systems engineering has allowed him to evaluate trading scenarios systematically.
His psychology background helps him understand the human factor: overcoming stress, which is mostly responsible for maintaining a successful career.