I keep going on the media and saying that we’re going to see the greatest bubble burst in modern history, after the greatest bubbles in history have clearly formed…
But everyone says this is not a bubble…
Because the central banks will keep supporting the economy and markets with more free money…
Because real estate is in tight supply and can only go up…
Because there is nowhere else to go but high-dividend stocks…
And because sovereign bond yields are going to negative, not just zero.
This is absolute BS!
Nothing lasts forever. You don’t get something for nothing, and that’s exactly what the central banks have created since late 2008 with their endless money printing and zero interest rate policies (which are now pushing desperately into negative territory) – neither of which has ever happened in history.
Doesn’t such desperation in policies make you wonder how weak the actual economy would be without such massive and never-ending stimulus?
The markets are so blind with free money and highly leveraged carry trades into bonds and stocks that they just don’t care about fundamentals anymore!
Earnings have been declining since late 2014, according to real GAAP or accounting standards. They have been declining for over three quarters even on the “funny money” standards… the ones that don’t count one-time losses, even though they keep occurring!
Productivity has been declining for years and is near zero. GDP has declined to just under 1% adjusted for inflation over the last three quarters… if it’s not actually lower. And the average wage has been declining since early 2000 and is close to what it was back in the early 1970s. No wonder the middle and lower-middle classes are pissed and supporting Trump and Sanders.
We’re already heading into a recession, if we’re not already in one. But the stock market is ignoring this because there’s simply nowhere else to go, as programmed by the Fed and central banks…
Just think – last Friday the Dow was off by nearly 400 points because one Fed governor said they might raise rates by a quarter frickin’ point in the coming months?
This is ridiculous!
It’s lemmings hurtling right over a cliff.
And if you don’t think bubbles can burst 80% or more in a matter of years, look at the commodity bubble that we predicted would burst many years back. Everything from oil to iron ore to corn to the general CRB Index is down 70% to 80%, with a bit more to come.
The commodity bubble proves that bubbles burst and don’t just correct.
And as it was the first to fall over the cliff… it may also be the first opportunity to reinvest in the years ahead…
Again, the sale of a lifetime is ahead if you preserve your wealth… and even grow it with our investment systems that have proven track records in both boom and bust periods.
After commodities, stocks will once again become a buy… and so will real estate.
But “buy and hold” has been dead since late 2007. It won’t be a safe bet until at least early 2020, and likely late 2022 in the next global boom – but that will be concentrated more in emerging countries like India and Southeast Asia, while the U.S. will still tend to be the “best house in a bad neighborhood” of slowing demographics and debt deleveraging.
Don’t listen to the never-ending army of pundits that are defending this bubble. It is the greatest, most pervasive, and most perverse in modern history, and it will destroy your wealth faster than you can imagine when it finally bursts – especially into late 2019/early 2020 when all four of my longer-term cycles bottom together.