Quote ", I expect between now and February the market to decline materially from the high (unlikely the day I am writing this is the high, but who knows!) The setup for next year is not good. The market will need to lose 40-60% of its valuation to be a good buy once again, and will likely take years to play out and fully recover. (a decade? 30 years like Japan?)
This is excluding the print our way out option as I expect Republicans to enforce fiscal discipline much more than they did with in 2016-2020 during 'good times'. With a crippled economy they will double down the pain in hopes of winning elections. The easy money train will end in January, unless Democrats takes the senate in Georgia."
This is excluding the print our way out option as I expect Republicans to enforce fiscal discipline much more than they did with in 2016-2020 during 'good times'. With a crippled economy they will double down the pain in hopes of winning elections. The easy money train will end in January, unless Democrats takes the senate in Georgia."
So we have a Democratic leadership, free money for everyone. As long as the free money flows, I do think the market downturn will NOT be a decade. It maybe as quick as a few weeks to a year. Free money to the people will flow, heavily, to gambling, ala Gamestop style or the market in general. It will also flow heavily to Bitcoin.
That doesn't mean we wont see a punch in the face, as I stated in "Preparing for a GBTC punch in the face" on January 7th. GBTC hit 48 on January 8th and hasn't come close to that since.
I am hoping that GBTC hits 22, if it does, I may allocate as much as 50% to GBTC. The other half will be divided 25% Gold Miners and 25% INDA. India doesn't have any Fed debt trap, and they have 1.2 billion people. I think looking ahead this will be the decade of India.
So the week ahead will validate there is a downturn, of weeks or a year (I am not THAT good to know exactly how long!). But once we bottom, I really do think the market will never look back. We will see inflation go right to the market, and it will be a rocket that never stops. But that depends on US pumping free money AND the rest of the world doing things like it.
If the rest of the world doesn't enter the debt race to keep up with the USA, we will have constraints. Specifically, the USD will be in danger of losing credibility in the world with new lows in value. The USD dropped 10% last year and was solely responsible for the rally. Not Trump, not a real comeback, just free money that devalued the USD. To learn more see my post January 2nd 'waiting for a new market high".
The USD bottomed January the 6th, the same time I called Bitcoin top. This is VERY interesting, or coincidence, its something to watch for ahead. And the USD jumped Wednesday , the day of the market downturn, again coincidence? I don't think so.
Lastly, we have a new problem in America, first was S&L debt (90's) , then housing market debt (2008), now stock margin debt. Each time we blow a debt bubble it must unwind once we reach peak debt. The question really is was last week peak margin debt? Whenever it is, that is the true top. And the unwind will be ugly.
Check out "I am tapping out" from Jan 25th to learn more about how extreme margin debt is.
Everything I posted is just educated guesses, so we will see in the weeks ahead if this is a downturn, and how long and how deep. At some point Trillions more will be released and we should see markets fly until the USD collapses or we show restraint. Hence Bitcoin, Gold, and India will be my next multi-year play.
yes, what you had said is right.
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