For the moment, things are looking pretty good in the United States but…our financial markets are perfectly primed for a fall.
The above introductory comments are edited excerpts from an article* by Michael Snyder (theeconomiccollapseblog.com) entitled Serious Financial Trouble Is Erupting In Germany And Japan.
Snyder goes on to say in further edited excerpts:
Other experts see things the same way. Just consider what John Hussman wrote recently:
“As I did in 2000 and 2007, I feel obligated to state an expectation that only seems like a bizarre assertion because the financial memory is just as short as the popular understanding of valuation is superficial: I view the stock market as likely to lose more than half of its value from its recent high to its ultimate low in this market cycle.
At present, however, market conditions couple valuations that are more than double pre-bubble norms (on historically reliable measures) with clear deterioration in market internals and our measures of trend uniformity. None of these factors provide support for the market here. In my view, speculators are dancing without a floor.”
It isn’t just stocks that could potentially be on the verge of a massive decline. The bond market is also experiencing an unprecedented bubble right now and, when that bubble bursts, the carnage will be unbelievable. This has become so obvious that even CNBC is talking about it…[saying:]
“Picture this: The bond market gets spooked by a sudden interest rate scare, sending a throng of buyers streaming toward the exits, only to find a dearth of buyers on the other side.
As a result, liquidity evaporates, yields soar, and the U.S. finds itself smack in the middle of another debt crisis no one saw coming.
It’s a scenario that TABB Group fixed income head Anthony J. Perrotta believes is not all that far-fetched, considering the market had what could be considered a sneak preview in May 2013. That was the “taper tantrum,” which saw yields spike and stocks sell off after then-Federal Reserve Chairman Ben Bernanke made remarks that the market construed as indicating rates would rise sooner than expected.”
If the strength of our financial markets reflected overall strength in the U.S. economy there would not be nearly as much cause for concern but, at this point, our financial markets have become completely and totally divorced from economic reality.
The truth is that our economic fundamentals continue to decay. In fact, the IMF says that China now has the largest economy on the planet on a purchasing power basis. The era of American economic dominance is ending. It is just that the financial markets have not gotten the memo yet.
Hopefully we still have at least a few more months before stock markets all over the world start crashing, but remember, we are entering the seventh year of the seven year cycle of economic crashes that so many people are talking about these days and we are definitely primed for a global financial collapse.
- Should Financial Market Cycles Play A Role In Your Decision-making Process?
- Cycle Analysis Suggests S&P 500 Has Topped & Will Decline To Major Low In 2016
Sadly, most people did not see the crash of 2008 coming, and most people will not see the next one coming either.
Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.
*http://theeconomiccollapseblog.com/archives/financial-trouble-is-already-erupting-in-germany-and-japan (Copyright © 2014 The Economic Collapse)
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