The recent down volatility of the US markets is due to the political tensions of the upcoming US mid-terms. If republicans win, the stock market will continue to reach all time highs, if Democrats get the house , the market could either fall further short term and then slowly consolidate. Presently some technical analysts seem mid to long term bullishness for US stock market. However, they feel the US stock market bull cycle will not last more than 1-2 years. The economy is reported to be healthy by recent government released numbers BUT the underlying fundamentals of unprecedented high personal & corporate debt with increasing interest rates – will make the economy implode in about 1-2 years time. At which point the stock market will take a hit, at which point the banks and governments step in to print more money to prop it up again and then we are in dangerous hyperinflation territory.
What has also been observed is that these past few weeks there was a stock buy back blackout period due to earning announcements. Stock buy backs is as a way for companies to increase their own stock prices without actually producing or earning more. Many considered this as an illegitimate way to promote value of a company, regardless it is practiced widely. Due to massive cheap loans banks have been serving wall street and corporations after 2008 crash, the stock market has grown into a massive bubble that does not reflect the true earning or viability of many companies (particularly in the Hi-Tech) …as such many well known investors are very cautious about getting into the market …some are liquidating slowly. What is even more interesting is that bonds have not faired much better than equity market. Usually money moves from one to the other in market cycles, but this time due to the heavy leveraged and debted corporations and nations, bonds are considered even more risky.
Presently US markets seem to be more attractive than all other markets in the world. The EU is tittering on a banking crisis lead by Italy. The emerging markets are experiencing currency crisis’ due to USD raised interest rates. On top of all that, trades wars with the US have the whole global geopolitical and financial systems in a dangerously instable state. Money will flood into the US markets but the eventually (and some say very soon) the petro dollar (USD as the reserve currency of the world) will be no more…to be replaced by another currency…perhaps yuan. Due to trade sanctions , nations are moving to bilateral trade deals outside of the US dollar. At some point, majority of the oil will be traded with other currencies and that will be the end of the American Empire and its stock market and economy. I suspect we will have a greater war triggered by America/Israel against Russia/china/Iran (the next superpower axis)….all empires go down burning. May take anywhere from 3-5 years, some say 7 years….
Taking into account the timelines and events predicted by MANY analysts from all sectors and regions – the stock and bonds crashes, recession/stagflation/depression, hyperinflation, large scaled war, financial crisis and reset, new world reserve currency, rise of new superpowers – will happen and play out during the next 2-10 years . Some say by 2030 -2035 we will be out of this mess and begin a cycle of new paradigms and prosperity. With all this research , I feel strongly that however the next 10 years play out, we should be prepared. Economics, financials, geopolitics may bore you – but it is each our responsibility to place ourselves in the right positions to preserve our wealth & well being. By the time the masses have woken up …its too late. Don’t follow the herd – be aware.
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