While I do expect a leg lower in December, with a stock rebound, it isn't the bottom. The US Stock market is now setup for a Greater Depression. But this time, I do expect some companies to excel during this Greater Depression as AI yields massive profits by reducing labor. And there is the rub, companies that can cut their workforce by 50-75% and increase profits will do great.
Companies that depend on consumers will not to well. Therefore overall the market will enter a greater depression as the economy transforms itself "before AI to post AI" in the next few years. I view this akin to the great depression in the 30's, as USA became a manufacturing powerhouse. Before then, the industries thriving in the 20's was not the same as the 40's.
How does this affect investing? Well, once the greater marketplace acknowledges an economic issue, I expect printing money to resume. The reason why its not done now is fear of inflation with Jerome Powell as head of the Federal Reserve. However Jerome Powell is retiring in January, and President Trump will put in a puppet, doing Trumps will over using data to guide actions.
So I fully expect once printing starts hardcore (Q2-Q3 2026?), the liquidity must go someplace. That will be either the few companies improving profits or Bitcoin and potentially Gold. Why? since the 40's when USA created loose money, new companies and expanding companies received improved financial conditions. With an economy that many companies are not doing what it takes to improve profits with AI, there will be resistance for investing. The excess liquidity will flow to the few companies or to 'Ponzi like' schemes such as Bitcoin.
