Market Lab Report - Will The U.S. Stock Market Crash Soon?
From Virtue of Selfish Investing Market Lab Reports and Newsletters
March 19, 2017 - 12:05pm
If 8000 years of human history is any guide, when central banks print as much money as they have, a massive global market crash has been the result.
There have been no soft landings when debt gets to these extreme levels.
Do not panic. There are always solutions.
If 8,000 years of human history is any guide, when central banks print as much money as they have, a massive global market crash has been the result. One of the best known examples is the rise and fall of Rome 2 millennia ago. But there have been numerous other examples of money printing gone wrong. Often, it is contained to a specific country but when the money printing becomes a global phenomenon as it has over the last several years, the result is always a major market catastrophe.
There are no examplesÂ in history where such a degree of money printing ended up as a "soft landing." Countries are mired in massive debt burdens including China. Debt-to-GDP is at all-time highs. Meanwhile, interest rates are at all-time lows. So unlike in 2008 after the great crash, central banks have no more "ammo" to further reduce rates to spark the global economy. Instead, they have painted themselves into a nasty little corner with no choice but to continue to print money to keep things afloat at best. Bond king Bill Gross who ran the world's largest bond fund writes about it here:Â Bill Gross Investment Outlook March 2017
While the US has ended its QE programs, the European Central Bank and Bank of Japan continue to print as they have no choice. If they were to materially reduce QE levels, it would beÂ the start of aÂ serious bear market. Gross writes about it here:Â Bill Gross: Happiness Runs.
Indeed, for the first time in our lives, the number of luminaries from legendary futures trader Ed Seykota to market historian and billionaire Jim Rogers to Bill Gross to Martin Armstrong, all of whom have top investment track records, have recently said there is a massive price to pay for all the money printing that has taken place globally starting with the US quantitative easing campaign in late 2008 after the great crash. Even the former head of the Federal Reserve, Alan Greenspan, has said that this will not end well in his classic understated manner.
What Should Investors Do?
We always advise watching your stocks and stock watch lists closely in real-time. Always have your stops in place.
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