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Financial news I consider important, with my opinion, which is worth as much as you paid for it.

Saturday, October 30, 2021

The final stock blow off, and lost economic decade ahead

 In my post All Easy Buttons pressed, the top is near, I believe the USA is near a stock market top.  The timing is impossible to spot the exact top, I think it will be January.   But the top is relative to actions taken, so its impossible to target the exact level or date.

What I can say with complete certainty the stock market got here due to government and Federal Reserve Bank intervention in an attempt to 'avoid pain'.   In a capitalistic market, you WANT pain, for pain helps the market regulate investment.  For example, if oil companies have profit challenges and price problems, it could accelerate investment in alternative energy.  However it is very unpopular to allow capitalism yield higher cost energy.  So the can is kicked by any way possible.  Now take this action and apply it to the entire US economy.

Does anyone believe the US economy is at the healthiest it has ever been in US history?  Not only that, that the years ahead will yield much better economic results?  If so, then the stock prices are well deserved.

In my opinion the free money bonanza that accelerated under President Trump, doubled down with the pandemic.  The year 2021 spending was approved by Trump and Republicans.  The 2022 spending will require Republican approval, but will block free money with a Democratic president.   

The inflation we are experiencing in my opinion is a result of economic shock combined with Just in Time manufacturing, and innovation over the last twenty years.  This will force the Federal Reserve to make a policy mistake, triggering the market decline, just like 1929.  To learn more, watch this video here.

We have conditioned the US economy that the public and companies are NOT the engine of the economy, but the government and Federal Reserve is.  So with the next decline the entire country will ask for more quick fixes, the next round should really crush the US economic dream.  

The intervention will 'require'...(click for video that explains these items)

Lower interest rates (real rates may even go negative!)
MORE free money by aligning the Federal Reserve bank and US treasury resulting in corporate and direct to people (universal Basic Income)
Expand and accelerate federal reserve buying private assets including banks!
Try to fix things with higher taxes on the top 0.01%, but eventually top 5%...
Issue price controls as the problems are blamed on the 'greedy corporations'.

This will result in massive shocks to the US economy, that I don't think will yield good results. 
Peoples investments must be defensive for an ever increasing stock market may not be in the USA future in the decade ahead.  The cracks are many, from China's energy shocks, the largest ponzi scheme in history blowing up in China real estate,  price shocks in natural resources,   Amazon and Apple issuing earnings warnings in the year ahead, and threats to extended US supply crisis.
I am working to create the right mix of investments for me, and I will share my view when I am ready.  For now, that's why I am in Bitcoin, India ETF's, and revenue stream ETFs.



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