Phoenix Capital Research's blog
How this will all end up is obvious to anyone: the EU Crisis will return and the whole mess will come crashing down.
The investment world is counting on China and the US to drive global GDP growth next year. Unfortunately it's banking on a false assumption.
Having just engaged in QE for TWO SOLID YEARS STRAIGHT the Fed would totally destroy any and all credibility in its monetary policies to engage in QE anytime within the next three to six months.
All the talk of “helping small business” and “creating jobs” is just that: talk. Those who actually show initiative to create business shouldn’t be overburdened with tax loads and bureaucratic red tap.
Janet Yellen is a career academic. This is not necessarily a bad thing. However, unlike most career academics, Janet Yellen is in charge of the US economy. In this light, one has to ask aloud, “why would you put someone with absolutely zero experience in creating jobs, growing a business, lending money, hiring, firing, etc. in
Put another way, those individuals responsible for running the largest companies in the US, who know more about their companies’ growth prospects and the economy have used the Fed’s policies to cash out.
This is all only the beginning. When the smoke clears, stocks could be 30% lower than where they are now, if not more.
The systemic risks underlying the Financial Crisis are in no way resolved.
So… we’ve got a weak and fragile market, losing two of its biggest drivers… at the same time that the Fed is ending QE. This is a recipe for a potential bloodbath. If we wipe out the “bubble” portion of the market move from 2009, we’re going to 1,250 on the S&P 500.
During every major breakdown in the last five years, the Fed announced a new monetary program. This time around, the Fed is committed to ending QE... So who will save stocks now?
At the end of the day, the Fed with its misguided theories have demolished capitalism: the single most powerful form of wealth generation in the history of mankind. All the Fed has really accomplished is leverage the entire financial by an even greater amount… which has set the stage for a collapse that will make 2008 look like a picnic.
The market is primed to drop. Now is the time to prepare.
The Smart Money is dumping stocks for real assets.
The single most important issue for understanding why the finacnial system is not healthy and why we’re set to have an even bigger crash than in 2008 has to do with one word…
Today, we now have a financial system that is even more leveraged than in 2007… backstopped by even less high quality collateral. So when the panic hits, the selling pressure will be even MORE extreme.