The ride up, until its down

The market is at all time highs, and its anyone's guess if this continues into next year.  With the world printing cash, the cash must flow to assets.  And right now, USA is the best place for assets in a world having challenges.

This does not mean average Americans are being prosperous.  It means loose cash finds whatever the world thinks is a safe investment.   When the loose cash ends or people panic, no one can predict exact timing.  But it will end in 2025 (if not sooner).

When it does, fear will take over hard core, and US bond rates should plummet.  When this happens it will be the LAST time you see rates this low easily for a decade.  Ideally move out of bonds into energy, commodities, gold, bitcoin, even oil.   Can also invest in technology such as AI or biotech.

What could change my outlook? Average Americans having lower costs, gainfully employed, paying down debts, and growth in consumerism.  Without this mix, we will all struggle to keep things afloat.

I do think after this crash we may see inflation in the decade ahead balloon as the world prints its way out of debt, and its obligations to baby boomers. 

Buckle up!  Enjoy this stock market, for it won't be the same ever again.  Easy money days are almost over.

A Lesson of when you are right, but wrong

 My last post asserted SPX hitting 4900, it hit 5120.  This is a prime example when you are right, but yet still wrong.  This is what the market is excellent on doing.  We did get a market decline and rally into the election as I asserted. 

But what I did not get is a decline to the target I thought.  Lesson is always trade out of positions when you are right, and don't wait until perfectly right.

I did close out of short positions, in the case of shorting Stellantis, it all worked out well.  But for SPX, I let quite a bit go back.

Looking ahead, while the market should be topping, I am reserving this from a declaration.  The reason is China is printing printing printing.  With loose money it will flow to whatever it thinks is a good investment.  I expect gold, bitcoin, and potentially the US stock market to benefit.  The reasoning is China's economy is a disaster, I question if the CCP will be in control by 2030.

Worse yet, we will likely get inflation in the USA, and the world, because of the Chinese printing flowing into hard assets.  Also Russia is attacking Ukraine international grain ships that will result in less world wheat.  These two items will force the FED to not cut rates, ensuring our economy doesn't get the support it needs.  I suspect the FED will know this and will ease in "different ways", like its special operations.  The interest rate lever is used to pretend it is the master controller of inflation, and while a component, it is hardly the largest one.

If assets do rise, the US pundits will use this to confirm the US economy is doing great.  Far from it.  The housing market is turning bearish (click).    And I personally know multiple people unemployed, some over a year in IT.   There isn't a crazy amount of layoffs, companies are simply hiring at a minimal level.  This is the first step to having an employment problem as the unemployed accumulate.

Where does that leave us?  With China printing we may get another goose up.  If it does Bitcoin & Gold is a good play, and the market.  Stay into the market going up, but if you get concerned listen to your gut and capture gains.  There is nothing wrong with sitting on a portion of your cash in fixed and sit watching into Q2 next year IMO.