If you needed any confirmation as to the true state of the world economy, not just the United States, then this week should have been a bellwether. In the backdrop of the death and funeral of former President George H W Bush, the stock market emerged as the biggest story this week along with growing doubts over America and China’s trade truce.
And since you’ve been paying attention to all this, then you already know it would be silly to attribute the massive 1,150 point total loss for the Dow Jones, a 4.5% reduction of the total value of stocks taking place over just 4 days, to the tariffs that Donald Trump keeps upping to get China to play fair.
While these tariffs are certainly not making investors happy, they do make me happy considering China is one giant slave factory devoid of numerous basic freedoms that American millennials take for granted, and we could all cut back on our spending if even just a little.
There’s more to life than being a consumer of goods and services.
The Stock Market Crash is Here and Well Underway
One investor is saying that things are shaping up to resemble 1929, when a giant stock market crash started a series of events which we would later know as The Great Depression:
Even people who invest in the stock market for a living have made the decision to take as much as 75% of their stock market holdings and convert them to cash, sitting on the sidelines and saying enough is enough.
In fact, these wild swings in the stock market are actually somewhat predictable at this point, considering that job growth is slowing and the yield curve in the bond market has now inverted, a very bad sign for stocks, equities, and financial markets in general.
It’s practically impossible at this point to call what’s happening on Wall Street “wild swings” because 800 point drops are anything but swings, but baby crashes each time they happen. Looking at the stock chart above one can easily see a “dead cat bounce”, where the recoveries get smaller even as the price drops grow consistently larger.
If Only It Were Just the Stock Market That is Crashing…
As we’re seeing across the financial board, stocks are crashing, but so is BitCoin and even housing markets all around the world. Housing sales have plummeted in the USA, Canada, Australia, the UK, Hong Kong, China, and even in Japan where they are now giving out abandoned houses for free. It’s that bad and they know they can’t make money off of housing any more.
The housing market and the stock market share a scary similiarity- a lack of buyers. The room is full of sellers right now, and few buyers exist to prop up the current bubbles in real estate and stock shares. The fundamentals simply aren’t there.
Overwhelmed by Distractions, People Are Just Starting to Wake Up to the Real Economy
Again, while the mainstream press continues to falsely attribute major market fundamentals to current events, the real picture is different. This market has become a bubble due to zero % interest rates and unlimited rounds of quantitative easing, stimulus, and even bailouts, and the end of the road is in sight.
Why did anyone think this “bull market” could go on forever? Even in the midst of record levels of corporate, municipal, government, and personal private debt, student loan debt, and dwindling GDP? The mainstream media is the spin machine to keep regular folks putting their hopes, incorrectly, into the stock market waiting for a correction that may never come.
This is why the most underappreciated assets right now remain to be gold and silver. Getting into cash from large positions in stocks is just step #1. Step #2 is buying lots of silver and investing in a gold IRA or getting a rollover from your 401K so you can still have tax benefits.
Please be proactive and do something about your retirement and investments while you still can. There is no shame to admitting that you’ve had a good run and you’ve made some solid returns in the last 10 years after the 2008 financial crisis, but just as recessions tend to happen every 10 years, all good things must come to an end, at least here on Earth.
Good luck and be vigilant.