Sadly, I’m more convince now than ever that my belief America has entered its worst economic, social and political period in its history, shall indeed be correct.
It was said to me not long ago by a savvy investor – “Peter I wake up each morning knowing you shall be right, but praying you will be wrong.”
For the record, I don’t wish this to be true and it certainly doesn’t increase business (most people don’t want to hear it and choose others who whisper visions of grandeur instead); but all around us, the evidence continues to pile up.
The latest move by the Chinese has added a major accelerant to the on-going currency war that the “Don’t Worry, Be Happy” crowd had hoped its sheep’s would not get wind of. This move shall be far more resounding than the little pee-shooter the Swiss fired not too long ago.
As noted over and over again, the Chinese economy is the engine that pulls the world’s economy – not the U.S. Sputtering may be too kind to describe China’s economy right now and as also previously stated; if China sneezes, much of the world catches an economic cold.
Meanwhile here in the U.S., the anemic 7+ year economic “recovery” continues to decelerate in the face of a Fed who would like to raise interest rates, but is seeing more and more reasons it really can’t afford to. The latest productivity and wage growth numbers stink. The real smell shall hit home when the “Happy” people conclude for the trillions of dollars of debt we have burden future Americans with since the last financial crisis, ends upa far too big of a price to pay for the anemic economic return we have seen. But hey, “Don’t Worry, Be Happy”!
While no longer a “Market Forecaster”, old habits die hard so here’s just a few words on what the “Former” Whiz Kid’s broken crystal ball sees:
U.S. Stock Market – The list of bearish fundamental and bearish factors increase daily. The list of stocks still performing rather well is shrinking rapidly – a classic factor when a bull is being put to bed. I remain this until further notice.
U.S. Bonds – The Chinese currency move shall support Treasuries and I look for more chatter that the Fed hiking interest rates may not actually occur. This shall benefit bonds far greater than equities IMHO.
Gold – While not there yet (despite having its obituary written by just about everybody under the Sun), the “relic” gold is attempting to put in a major bottom. As noted recently, it’s close to breaking significantly one way out of a bearish pennant formation and yours truly believes (and hopes) it’s to the upside.
Oil – For many months now I’ve believed oil’s decline can only come to an end somewhere in the $30’s. Nothing has change for me to rethink that target.
Have a most blessed Tuesday!