Stocks Bursting?
In a word, "NO". Please don't follow the Donald Trump, Peter Schiff and others touting this bubble is about to burst. You don't want to not have exposure to the stock market you want to definitely have exposure to the stock market and be buying any sizeable dips in the markets if you are lucky enough to get them. The Dow is in no way finished its bull market run. Not by a long shot. I suspect it will be headed to at least 45,000 over the next two years. Yep that is where I see it headed. Not to 6000 or 3000 or any other number like this. I see it moving higher because of inflationary pressure on stocks. Yes interest rates will rise and in the past this has been notoriously bad for stocks. Not this time my friends. First of all if interest rates rise to say 6% as some are projecting over the next few years this is still well below the last forty years average of 11%. With the cost of inflationary pressures you still can't really live that well on 60K a year which is roughly what you would get if you had saved one million dollars in the bank and who has that in the bank right now. Sure not the majority who have only enough to survive one weeks pay loss. Plus the damage that has already been done to retirees saving accounts. It would take a few years at ultra high interest rates to recover losses this way.
I do not see it my friends. I don't see it at all. Maybe 3% interest at most but not much higher.
Say the Fed raises three times next year well that would put interest rates at about 1.5%. Not much. On the feds balance sheet it is a lot. However for you it is absolutely nothing. Remember the banks do NOT have to follow the interest rate set by the Fed. They can do what they want. I suspect they are going to pile into lending on real estate very shortly. So that will be what they are going to do with their money.
The bigger problem that I think most people are missing is Trumps idiotic policies around protectionism and tariffs. If you are from the US you might think that this is good. You know bullying companies to stay in the US and destabilizing the present model of global outsourcing that has been in existence for the past thirty years. This is the biggest bomb waiting to explode. Forget the Bonds and stocks. This one will destroy the economy. Do you think that wage stability and standard of living can change overnight? It doesn't happen that way folks. You can't bully your way into being made in the US again. If you cut off the rest of the world and live in a shell this might work. I mean think of it this way. What do you say to the Japanese and Chinese who hold a few trillion in debt so that Americans could buy their cheap products for decades? Hey we aren't going to allow your products in here because they are killing our infrastructure and standard of living. Good luck with that one. You will piss off a lot of people. The very thing you are attempting to prevent will occur (which is war) as a result of these protectionist policies. Watch and see. They tried that in the 30's too. It didn't work then and it won't work now. That was when you had a far less reaching global economy too. It exacerbated problems. Trump being the blow hard, ego centric, conspiracy theorist is walking right into the trap like a fool. He will do a lot of harm folks. You better hope he has good people around him to explain what he can and cannot do. Let's hope he listens when and if they tell him.
I do not see it my friends. I don't see it at all. Maybe 3% interest at most but not much higher.
Say the Fed raises three times next year well that would put interest rates at about 1.5%. Not much. On the feds balance sheet it is a lot. However for you it is absolutely nothing. Remember the banks do NOT have to follow the interest rate set by the Fed. They can do what they want. I suspect they are going to pile into lending on real estate very shortly. So that will be what they are going to do with their money.
The bigger problem that I think most people are missing is Trumps idiotic policies around protectionism and tariffs. If you are from the US you might think that this is good. You know bullying companies to stay in the US and destabilizing the present model of global outsourcing that has been in existence for the past thirty years. This is the biggest bomb waiting to explode. Forget the Bonds and stocks. This one will destroy the economy. Do you think that wage stability and standard of living can change overnight? It doesn't happen that way folks. You can't bully your way into being made in the US again. If you cut off the rest of the world and live in a shell this might work. I mean think of it this way. What do you say to the Japanese and Chinese who hold a few trillion in debt so that Americans could buy their cheap products for decades? Hey we aren't going to allow your products in here because they are killing our infrastructure and standard of living. Good luck with that one. You will piss off a lot of people. The very thing you are attempting to prevent will occur (which is war) as a result of these protectionist policies. Watch and see. They tried that in the 30's too. It didn't work then and it won't work now. That was when you had a far less reaching global economy too. It exacerbated problems. Trump being the blow hard, ego centric, conspiracy theorist is walking right into the trap like a fool. He will do a lot of harm folks. You better hope he has good people around him to explain what he can and cannot do. Let's hope he listens when and if they tell him.
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