Will the Stock Market Crash Soon?
It seems to me, as a person who follows these things, that the stock market is not really sure what to do at the moment. One day it goes up a hundred, the next day it is down a hundred. The fundamentals of the market are very strong however the credit crunch is hanging over it like a dark satanic cloud, so how will the stock markets of the world perform in 2022?
I am a very positive thinker and am also a risk taker. I strongly believe in the concept of risk and reward and am a willing investor of stocks and shares. I am currently investing into various areas of the world on a monthly basis.
This strategy is known as pound cost averaging and is very popular in these turbulent times. When unit prices fall you are able to purchase more units for your monthly premium etc.
At the back of my mind is the realisation that a stock market crash could be imminent and for that reason I am keeping in reserve quite a large amount of money which I will invest if such an event takes place.
I am somebody who likes to invest on the stock market in the aftermath of a dramatic fall as I believe that most of these sharp declines are as a result of an over-reaction and because of panic selling on the part of novice investors.
If there is more bad news on an economic front such as a deepening of the credit crunch or a series of profit warnings from some of the major companies on the index then share prices may well fall. These are situations which could well happen and is the reason why I am keeping some cash back.
The market, in my opinion, is strong and robust enough to with stand the current problems and historically does well in the years when Americans vote for a new President.
But we are merely borrowing and spending to sustain our unsustainable life style. This is like being a rich kid who inherited a fortune and is wasting it on nightlife. Consumer economy is a myth. When the multinational corporations are done plundering America, they will simply move out to suck the blood of other nations.
They are working hard to create consumer culture elsewhere around the globe. Consumer consume, go into debt and become poorer. Only producers prosper.
Imagine life if Uncle Sam cannot borrow. It is going to be the biggest crash the world has ever seen. We cannot sustain our jobs at the current salary levels and the free market is telling that to us as it is. Loud and clear. We need to cut the deficit soon, before our hand is forced.
Today’s economic problems are not about what we are doing now. They are about what we have already done for many decades. The mistake was to inflate credit to excessive levels. FED made credit easy, America borrowed.
Inflated the money supply with borrowed money, inflated the prices and salaries. We borrowed from the future. The future is here. Money supply will deflate. It is not reasonable to expect that all will be fine when the pay back time arrives. Prepare for a deflationary crash.
Joe cannot fix it. Nobody can! They can only change who pays for it and so far it is the savers and the tax payer who is paying the bill for borrowers and the bankers.
Soon we won’t be able to afford interest payments on existing debt. Then the party will end and the Great Depression #2 will start.
Anything I Missed?
And now I’d like to hear from you:
Or maybe you have a question.
Either way, let me know by leaving a comment below right now.