Updated April 2020
America’s Economy and the Stock market
The Stock market does not care that America’s economic recovery is not real
There is simply no economic recovery. All one has to do is take a look at a chart of copper or the Baltic Dry Index to understand that every statistic the BLS issues is nothing but rubbish. There are a huge number of individuals including fund managers who have sat out this bull market because they have rightly made the following assertions
Several reasons America’s economy is Not As Strong As It Appears
- Copper a leading indicator is in a death spiral so all must not be well
- The Baltic Dry index another leading indicator is also in a death spiral, so the economic recovery is all smoke and mirrors
- Overall Market volume is terrible, and this does not bode well for the markets
- Unemployment figures are twisted, and the data the BLS puts out does not give you a real picture of what is going on
- Real wages have been declining since 2000
- Student debt is time bomb waiting to explode
- We are creating new debt at a mind-boggling rate
America’s economic recovery is not real but the Bull Market does not give a damn
We could list dozens of more reasons, but other than sounding like another naysayer, it would not help you one bit. This economic recovery is a joke as the Fed has done nothing but create a mountain of debt to paint a false picture that all is well.
Having said that the naysayers are kicking themselves in the Shin and some in even more sensitive parts as they cannot fathom how against this terrible backdrop the markets have soared so high over the past seven years. The answer to this question lies in “mass sentiment”
Our proprietary Anxiety Index also clearly indicates that the masses are nervous and until they embrace this stock market bull it is unlikely to crash.
The Unemployment data from Shadow Stats indicates that the economic recovery narrative is fake
America’s Economy Far From Strong But The Market Is ready to Trend higher
While the Economic Recovery Narrative is False, this Stock market Bull is expected to trend a lot higher
Having said that, please do not tell us you believe that the markets can only trend higher without experiencing a correction. If you do we have a machine that turns rocks into Gold that we would be willing to sell for a small fortune. Every bull market experiences one or two extremely strong corrections. The last real correction we had was back in 2011; everything after that was at most a tiny road bump.
The Fed will continue to play mind games by raising rates to give the masses the impression that all is well. However, overseas buyers will continue to purchase our bonds, which will neutralise the Fed’s rate-hiking efforts. The Fed is fully aware of this and is taking advantage of this window to raise rates in order to provide them with more wiggle room in the future. The global economy is weak and so raising interest rates here makes our bonds very attractive to the rest word. If this economic recovery was real, Central bankers World Wide would be raising rates.
In terms of the stock market, we expect one strong correction before this bull market ends. This correction will be followed by with a move to new highs and then when the masses embrace this bull, a long term will take hold.
America’s Economy & Stock Market Update April 2020
The route of today’s problems is Fiat money, and as the money supply increases so will the number of issues facing this world. But as the problems arise so will the opportunity factor, but for that, one needs to stop falling for conspiracy type theories and focus on taking actionable steps. 10% of the populace thinks outside the box, but roughly 3% put this information to use. The rest either fall into the “conspiracy storytelling camp” or the “resistance camp”; both positions are all talk with no action.
There is also a possibility that the markets could experience two pullbacks; one could be minor and the other sharper in nature. We can’t predict the order, but needless to say, we view all sharp pullbacks through a bullish lens while the Trend is up. Market Update Feb 20, 2020
The masses are panicking and therefore this is the best time to buy stocks. In the name of the coronavirus, the entire world has come to grinding halt and years from today, the masses will mourn over the fact they did not load up on shares that were literally being given away. They made the same fatal mistake in 2009 and they will do so again. Nothing ever changes, misery loves company while stupidity simply demands it.
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