018/2019 Bear Market
02-27-2019, 05:57 AM
You can´t predict the markets because they are dependent from central banks actions and secondary measures from governments. And these actions are seemingly random in time. The only thing you can understand is a shift in market sentiment. These shift is palpable by a backturn of central bank policies and in many measures taken by governments which direct or indirectly stifles investment. May it be foreign or national.
Central banks are like fuel on a plane. The moment they raise interest rates they are cutting it´s fuel. The plane will glide for some time but inevitably fall. Other measures from governments. Like raise in tax, regulations, etc. Are storms to help take the plane down.
The recession didn´t happen yet because Trump managed to influence Powell. And he backtracked from the path of rising interest rates. This event you cannot time. You cannot time when political and economical decision makers decide it´s time to raise or lower interest rates.
Even without raising interest rates central banks can difficult access to credit. Setting more regulations or demands of it´s approvals.
Both FED and ECB are privately owned.
If you add other measures like a raise in tax. A regulatory new rule. State persecution of investments. Crashes are more probable. Investments are globally interconnected. Just like a Rubik cube. A measure in China will affect Europe and US. You cut off the oxygen of a source of investment directly in it´s origin. Wether it be China, Europe, Dubai, US, etc. And that area of investment dries up.
Credit is the fuel of the economy. You cut the fuel the engine stops working. When does the fuel gets cut. Nobody knows. The current policy is to start cutting the fuel.
Central banks are like fuel on a plane. The moment they raise interest rates they are cutting it´s fuel. The plane will glide for some time but inevitably fall. Other measures from governments. Like raise in tax, regulations, etc. Are storms to help take the plane down.
The recession didn´t happen yet because Trump managed to influence Powell. And he backtracked from the path of rising interest rates. This event you cannot time. You cannot time when political and economical decision makers decide it´s time to raise or lower interest rates.
Even without raising interest rates central banks can difficult access to credit. Setting more regulations or demands of it´s approvals.
Both FED and ECB are privately owned.
If you add other measures like a raise in tax. A regulatory new rule. State persecution of investments. Crashes are more probable. Investments are globally interconnected. Just like a Rubik cube. A measure in China will affect Europe and US. You cut off the oxygen of a source of investment directly in it´s origin. Wether it be China, Europe, Dubai, US, etc. And that area of investment dries up.
Credit is the fuel of the economy. You cut the fuel the engine stops working. When does the fuel gets cut. Nobody knows. The current policy is to start cutting the fuel.