As the New Year Looms - What to Expect...
First of all I want to wish you all the best from my family to yours in the coming new year. I do sincerely hope that all your wishes and hard work pay off in 2018. Try to live in the moment and try not to set too many goals this year where you will put extra pressure on yourself. There is a whole pile of malinvestment out there as a result of easy credit. Most people are chasing their tail although they don't really see it that way. As the boomers near the turning point in their lives where the final bell tolls, we should see even less demand for the goods and services in the coming years. This is the end of an era that started back in 1947 or so. Approximately seventy years ago. It peaked in the 90's and try as we might to bring these great times back it simply isn't in the cards. There is no group that is big enough to spur demand like the boomers did. Even the millenials cannot do what the boomers did because they are relatively the same size. What that means is that they will simply fill the demand that the boomers leave behind. You won't need more.
The boomers spurred the greatest credit creation we have ever seen or may ever see again. At least in my own life time. The huge amount of malinvestment that followed them through their key spending years is still being propped up. It was the single biggest cause of inflationary pressure that has ever existed. These problems will probably be solved in the next twenty years. We will produce locally and so I doubt that we will see huge over supply that we have had for the past thirty to forty years.
I don't expect central banks to give up their hard work but in the next five to ten years they are going to face some very strong head winds. With debt as high as it is and boomers moving into old age homes and dying off demand will drop sharply. You will notice it and feel it. It will start slow and then accelerate in about five years. Don't forget the biggest group of them is between 63 and 67 at the moment. If you want to use a time frame think of Jaws (the movie 1975). That is when it all began.
The generation that were the boomers parents are pretty much gone now with a few stragglers left. Those in their late eighties and nineties. The Boomers will move there in the next decade. The ones that were hard on themselves (which was a lot) I am beginning to notice that 69 seems to be the magic number where things go wrong in the body. So a lot of them have maybe 3 to four years before they risk exiting the world.
Anyway enough about that. Your immediate strategy should be based on what the Dollar will do from here. It is presently around the 92.30 level. This is a ripe level for a reversal. It has formed an obvious head and shoulder pattern that would normally signify further downside from here but we need to keep in mind that the Dollar has been sideways for quite some time (almost a year) where the 93.80 level is the major volume area (remember me telling you to find them) never straying too far from this area whether it be up or down. This level is the mid volume point holding price at the moment. We cannot say it is either bearish or bullish at the moment. It is simply sideways.
However from here, you could see a significant rally back to the 95-96 area. This would be the last rally we might get before a sell off. What does that mean?
Gold may fall heavily from here.
The EURO may fall back to the 1.1500 area or lower and commodities will NOT rally when the dollar rises. Does it mean that the Dollar bull is back. Not really just a ramp once sentiment is skewed heavily in a direction like it is right now. That direction is bearish. Could mean the Aussie and other currencies sell off too. Oil should stay where it is to lower from here.
Remember it would seem like stocks are poised to fall. That could happen as the YEN strengthened and the Neikii seems to be stuck sideways.
So in the coming week look for the rally. If it is going to happen NOW is the time.
Cheers and Happy New Year.
The boomers spurred the greatest credit creation we have ever seen or may ever see again. At least in my own life time. The huge amount of malinvestment that followed them through their key spending years is still being propped up. It was the single biggest cause of inflationary pressure that has ever existed. These problems will probably be solved in the next twenty years. We will produce locally and so I doubt that we will see huge over supply that we have had for the past thirty to forty years.
I don't expect central banks to give up their hard work but in the next five to ten years they are going to face some very strong head winds. With debt as high as it is and boomers moving into old age homes and dying off demand will drop sharply. You will notice it and feel it. It will start slow and then accelerate in about five years. Don't forget the biggest group of them is between 63 and 67 at the moment. If you want to use a time frame think of Jaws (the movie 1975). That is when it all began.
The generation that were the boomers parents are pretty much gone now with a few stragglers left. Those in their late eighties and nineties. The Boomers will move there in the next decade. The ones that were hard on themselves (which was a lot) I am beginning to notice that 69 seems to be the magic number where things go wrong in the body. So a lot of them have maybe 3 to four years before they risk exiting the world.
Anyway enough about that. Your immediate strategy should be based on what the Dollar will do from here. It is presently around the 92.30 level. This is a ripe level for a reversal. It has formed an obvious head and shoulder pattern that would normally signify further downside from here but we need to keep in mind that the Dollar has been sideways for quite some time (almost a year) where the 93.80 level is the major volume area (remember me telling you to find them) never straying too far from this area whether it be up or down. This level is the mid volume point holding price at the moment. We cannot say it is either bearish or bullish at the moment. It is simply sideways.
However from here, you could see a significant rally back to the 95-96 area. This would be the last rally we might get before a sell off. What does that mean?
Gold may fall heavily from here.
The EURO may fall back to the 1.1500 area or lower and commodities will NOT rally when the dollar rises. Does it mean that the Dollar bull is back. Not really just a ramp once sentiment is skewed heavily in a direction like it is right now. That direction is bearish. Could mean the Aussie and other currencies sell off too. Oil should stay where it is to lower from here.
Remember it would seem like stocks are poised to fall. That could happen as the YEN strengthened and the Neikii seems to be stuck sideways.
So in the coming week look for the rally. If it is going to happen NOW is the time.
Cheers and Happy New Year.
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