My Worst Fears Have Come: A Depression into Stagflation
Its no surprise the market is collapsing - globally - around the world in-front of our owns eyes. This has been an enormous bubble created by central banks over the past 10-12 years from incredibly negligent and irresponsible monetary policy pushed ahead by massive amounts of free money allowing companies to buyback stock to inflate their stock prices.
It has officially come home to roost.
There are fourth major support levels and I see very little support until we hit the 2050-2100 level. There are no guarantees that holds, and at the very least everyone should assume a 50% retracement from the prior ATH of 3400ish.
While in my opinion, even though I am not a health official, due to a corrupt healthcare system and slow-to-act government, the USA will be one of the worst "industrialized" countries impacted from the coronavirus and the US stock market will likely have years of malaise.
The question is, once things eventually start to look up what will happen? Well my friends that is where the second major trouble lies ahead. While we can certainly expect a major relief rally, its highly unlikely new market highs would be made, and there will likely be another recession after this impending one as a result of stagflation. Yields are starting to tick exponentially higher and the bond market has begun pricing in inflation. Eventually, yields will spike up and it will price in stagflation and the bond bubble will burst.
With all the money printing and stimulus banks around the world are undergoing to save the economies and record low interest rates, this will create massive inflation. Its hard to see it now but we will see crude, Gold and Silver undergo massive spikes to the upside for 3+ years once the dust settles. This inflation will lead to further job losses and cause another major recession. Gold will go well over 2000, Silver will go well over 50 and crude will spike right back to the upside.
Its a tough time right now and the next 5 years are looking bleak in traditional equities.
Wishing everyone safety and health. Remain defensive and avoid leveraging in this market. This is not the time to "buy the dip" and "predict bottoms" as its very possible many stocks go back to 2010 levels.
- zSplit
It has officially come home to roost.
There are fourth major support levels and I see very little support until we hit the 2050-2100 level. There are no guarantees that holds, and at the very least everyone should assume a 50% retracement from the prior ATH of 3400ish.
While in my opinion, even though I am not a health official, due to a corrupt healthcare system and slow-to-act government, the USA will be one of the worst "industrialized" countries impacted from the coronavirus and the US stock market will likely have years of malaise.
The question is, once things eventually start to look up what will happen? Well my friends that is where the second major trouble lies ahead. While we can certainly expect a major relief rally, its highly unlikely new market highs would be made, and there will likely be another recession after this impending one as a result of stagflation. Yields are starting to tick exponentially higher and the bond market has begun pricing in inflation. Eventually, yields will spike up and it will price in stagflation and the bond bubble will burst.
With all the money printing and stimulus banks around the world are undergoing to save the economies and record low interest rates, this will create massive inflation. Its hard to see it now but we will see crude, Gold and Silver undergo massive spikes to the upside for 3+ years once the dust settles. This inflation will lead to further job losses and cause another major recession. Gold will go well over 2000, Silver will go well over 50 and crude will spike right back to the upside.
Its a tough time right now and the next 5 years are looking bleak in traditional equities.
Wishing everyone safety and health. Remain defensive and avoid leveraging in this market. This is not the time to "buy the dip" and "predict bottoms" as its very possible many stocks go back to 2010 levels.
- zSplit
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