TRILLIONS SHIFTING IN GLOBAL BOND MARKETS:
No, thank you as enormous outflows left the US bond markets. Why? Because the Trump presidency has Policies which includes massive spending to MAKE AMERICA GREAT AGAIN. This strategy long overdue since 2008 includes:
- Massive infrastructure spending
- Massive return to home manufacturing
- Massive trade rebalances
- Global INFLATION overpowering deflation and stagflation
- Massive shifts for developing nations
Already the DOLLAR has soared in value since the election. There is really no comparison and the rise is continuing. Fixed bonds knowing interest rates are rising next – are bear bonds and no one wants them – versus NEW bonds which will replace them. So bonds are being sold. Like never before. The Bond Super CRASH has begun if your a Bondholder – it was NOT THANKSGIVING out the door to the American Holiday. The safe haven investment is a blood bath which is why we told YOU all to move to all cash getting out of both stocks and bonds – for those who listened you’re very happy and safe right now.
The worst is yet to come.
Meanwhile, let’s think of how this all works ( economically ) on the stock market as my students in economics class 101. So children let begin.
- Earnings have been going down in a global earnings recession since 20014. No end in sight.
- Multiples on share price have been soaring without earnings ratio’s to drive them. We call that insane. Fools rallies.
- Next add in the DOLLAR SOARING and what that will do to all American based companies that must buy STUFF world wide at a price where their money goes farther – that’s good – and where if they sell STUFF their goods are now SO MUCH HIGHER COST FOR EVERYONE ELSE.
- Now consider the price value ratio of the benefit of BUYING STUFF will not offset the decline in SELLING STUFF and MARGIN CRUNCH because all USA firms have been hit by DOLLAR swing having zero time to prepare for the shift. Their earnings will be muted – and share price will be affected – negatively – into 2017 .
Consider this while – the market skyrockets up on “what” – insane honeymoon “WHAT” after Trump – as in WHAT?
SO THE RISK INSIDE THE MARKET is greater than the reward. The market is always to buy low sell high. Also, the market is always bowed out when the crowd moves in and bow in when the crowd moves out. This requires discipline. I’ve suggested you sell out at the high – and invest in diversified insurance investing for the coming years until SUPER CRASH works its way through the system.
It is so hard to take this advice. Over 40 years those that have – slept like babies and never lost their principle hard earned nest eggs. Those who did not lose their nest egg and moan and confirm…I SO WISH I LISTENED TO HIM AND TOOK “ACTION”.
What I”m telling my readers – is to keep the data pure – wait and watch – and see how right this blog is going to be – against all the experts – in time. Just wait and watch.
I promise you – this is going to be fun.
Berny Dohrmann – Financial historian and founder CEO SPACE – next big one for you ( the tax man will buy your lifetime membership asset Dec 13 ).