Stock Market Cycles: Forever QE Will Fuel Insane Bull Market

Stock Market Cycles: Forever QE Will Fuel Insane Bull Market

Stock Market Fears Culled With the Help of Forever QE

We are entering a new paradigm; get used to forever QE, though it will be given other names along the journey to make it appear more palatable. The US and by default worldwide debt is set to soar to preposterous levels; get used to it and embrace this fact for nothing has changed since we got off the Gold standard and nothing will change until the system collapses, though waiting for that day might prove to be fatal as the masses are completely asleep.

If a national debt of almost $22 trillion is shocking to some; imagine how they will feel when the debt soars to $100 trillion. Many might say no way in hell that is going to come to pass.  Take a look at the national debt numbers in the early 1900s. Go back to 1900 and then fast forward to the present.  Once upon a time, our national debt was less than 1 million USD.

Now if you told people back then it would be at $22 trillion one day; would the reaction not be the same? We will go on record to state that there is a good chance that worldwide debt will surge to $1000 trillion before the masses discover the emperor is naked, fat, bald and ugly; until then they will continue to believe he is a handsome prince.  It currently stands at $247 trillion

Clarida hints at the Forever QE reality

In Feb. 22 speech, Clarida acknowledged no doubts. He said that radical monetary policy has worked, that it will continue to work, and that it may well become more radical. He contended that low-interest rates are here to stay and that new policy “tools” must be sharpened and kept at the ready. As to potential adverse consequences of administered rates and the mind-control games meant to “anchor” our collective expectations of the future, he mentioned none.

Certainly, rates are astoundingly low—Bank of America Merrill Lynch recently was able to count $11 trillion of bonds worldwide quoted at yields of less than zero. Clarida said that the decline in the so-called neutral rate of interest “is widely expected to persist for years.Full Story

Stories like this barely receive much media attention, and the masses are too busy dealing with the problems on reality TV or being misdirected by highly politicised B.S. News that only serves to allocate even more time to trivial matters.   These developments indicate that developed nations like the US and most of western Europe will become increasingly hostile places to live in. This topic is beyond the scope of this publication, but the trend is in place, the US is no longer the bastion of Freedom and will soon not make it even to the top 10 of the best places to live in. As a result of forever, QE Stock Market Fears should be viewed as a disease that needs to be cured. Instead of panicking jump in and back up the truck every time the stock market crashes.

In The Forever QE Era; strong corrections have to be embraced

In terms of Stock Market Cycles, until the Fed changes its mind, all sharp corrections have to be viewed as buying opportunities, and backbreaking corrections have to be placed in the category of “once in a lifetime events”, provided of course the trend is positive.  That is what we are here for; to inform you if the trend is positive (Up) or negative (down).   The world is going to witness a Fed that has decided to make a cocktail of Coke, Heroin, Crack and Meth and take it all in one shot. Imagine what a junkie on this combination of potent drugs is capable of doing, and you will have an idea of where the Fed is heading in the years to come.

Now the Gold bugs will cry “I told you so”. Our response to this statement; not so fast little bugs. While precious metals will do well, we think stocks in key sectors (and we are not referring to Gold stocks) will pulverise the precious metals sector in terms of returns. One such area is robots (particularly Sex-bots) and AI.

Stock Market Cycles: The Game Plan

The stronger the deviation the better the opportunity, the trend is your friend unless you try to fight for if you do it will turn into your nemesis.  We would like one person to point out one instance over the long when a permabar has been correct on the trend of the market. If you betted against the market in the run you would be blown out of the water decades ago, that is why there is not one successful permabear when one takes the long term perspective.   Case in point, the backbreaking so-called market crash of 1987 and the even scarier one of 2008.  The chart below clearly proves that being a long term bear is dangerous for one’s financial health


Stock Market Cycles Trend Forecast

On the monthly charts above, our indicators are trading in the extremely oversold ranges and historically, when this occurs, the markets have rallied higher instead of breaking down. Hence any correction is generally expected to be a short-lived one.

Ideally, they shed some weight, our indicators pullback and the masses panic. If the markets don’t pull back sharply but negative sentiment soars and our indicators pullback a bit that would be more than enough for us.  Never tell the markets what to do; the idea is to be able to identify what represents opportunity and what does not?  While we would favour a firm correction, we are willing to adapt to whatever hand the market deals. As the trend is up, this means we have no choice but to view every reversal, whether it is sharp or shallow through a bullish lens.

Those that hold out for a meaningful correction

Might be sorely disappointed as on the monthly charts, the Dow is trading in the extremely oversold ranges, and this could limit the downside action. Individuals that use the term significant or sharp when referring to a correction who are not familiar with the concept of Mass Psychology, usually have floating targets. For example, before the correction starts, they might be satisfied if the Dow sheds 1500-2000 points, but after the masses are in full-blown panic mode, these guys will jump on the panic train and lower their targets.

History illustrates that they will keep lowering the targets until the markets suddenly reverse course, catching them off guard once again. The crowd never wins, and that’s one of the main lessons investors need to understand when it comes to investing. Market Update May 7, 2019. 

As far as the news is concerned it is on par with sewage and this old clip illustrates who the CIA admitted to having agents in the news media. If the CIA can do this what is there to stop other large corporations from doing the same.

Since 2003, we have not found one piece of financially related news from Mass media that could have been used to help any investor in the long run. In fact, mass media outlets seem to take delight in stampeding the masses at precisely the worst time and pushing them to them into the Euphoric camp when the smart thing to do was to bail out.

A simple winning strategy is to buy when the masses are stampeding and the trend is up and vice versa

Stock Market Fears Views

The US Federal Reserve will pump almost half a trillion dollars into the financial system over the end of the year, dramatically increasing intervention in the market in an attempt to avoid a repeat of September’s alarming rise in short-term borrowing costs. The New York markets arm of the central bank announced the measures on Thursday, amid mounting concern that banks will pull back from lending ahead of regulatory capital calculations on December 31, leaving cash in short supply.  Full Story

The lack of liquidity in the repo market is only a symptom.

“There isn’t any real economic catastrophe occurring,” says Tim Speiss, co-leader of the personal wealth advisors group at accounting and advisory firm EisnerAmper. “That this could be a regulatory matter makes the most sense.”

Banks also make 1.8% interest on money they keep on reserve with the Fed. Not just mandated on levels, but excess reserves that could use to cover liquidity shortfalls. The latter practice started with post-economic crash QE. “They had to compensate banks, which were giving up interest-bearing assets,” Zhao says. “But once you pay rates, some banks don’t have the incentive to lend it out.”

The total is currently more than $1.3 trillion in excess reserves, meaning at least $19.5 billion in interest with no risk is paid to the banks every month. When repo pays 1.75% to 2.0%, banks may prefer to park all the extra and collect guaranteed interest. Full Story

Whatever reason is laid out here, the main goal of central bankers worldwide is to destroy their currencies.  The world is now locked in a currency war and the goal is to attempt to finish last. When the Feds bailed out the banks in 2008 and refused to allow market forces to take over after the bailout, they set the path in motion for forever QE. Now the moment the market gets any signal that the Fed might be inclined to tighten the spigots the markets tank. This entire economic recovery is founded on a lie and the only driving force behind this recovery is hot money.

Forever QE & Insane Bull Market Update April 2020 Update

The Trump administration has doled out roughly $881 billion from the major components of the pandemic relief package signed into law one month ago and soon will have a half-trillion dollars more to shovel into the economy.

The Treasury Department was put in charge of distributing, through multiple channels, nearly half of the $2.2 trillion Coronavirus Aid, Relief and Economic Security Act. While one key piece ran empty within two weeks — aid to small businesses — there’s still has a lot of money left to work with.

“We’ve had an unprecedented fiscal and monetary response,” Treasury Secretary Steven Mnuchin said Thursday in a Bloomberg News interview.

On Friday, President Donald Trump plans to sign into law another $484 billion in rescue money, including replenishment of small business assistance, aid to hospitals and funding for virus testing. Here is a tally of what’s been spent or committed so far from the law’s key programs: Yahoo

This kind of liquidity is like throwing gasoline on a raging fire, while the short term pullback has been vicious, the counter-rally is going to be even stronger. The first stages of the counter-rally already indicate what lies in store for this market in the years ago. Now is the time to back the truck up and buy quality stocks.

Other Articles of Interest

Trending Now News Equates To Garbage; It’s All Talk & No Action  (April 24)

Americans Are Scared Of Investing And The Answer Might Surprise You  (March 9)

Stock Market Crash Stories Experts Push Equate to Nonsense  (March 4)

Popular Media Lies To You: Don’t Listen To Experts As They Know Nothing  (March 3)

Fiat Money; The main driver behind boom & Bust Cycles  (March 1)

Permabear; It Takes A Special Kind Of Stupid To Be One  (Feb 21)

US Debt To GDP Means Nothing To Bonds & Stocks  (Feb 12)

Technology-Driven Deflation Will Kill The Inflation Monster (Feb 7)

Business Investment & Stock Market Uncertainty   (Jan 31)

Dow 30 Stocks; what are they saying about the markets  (Jan 30)

Stock Market Bull 2019; Follow The Trend & Avoid The Noise   (Jan 29)

stock market fears and why most investors lose money in the markets