If you want to make money long-term, you have to bet against the prevailing consensus of most financial experts. I have never seen such an overwhelming bullish consensus as there is today that the economy is going to do great, that gold is a sell, and that the stock market is going to go higher, and if you want to build speculative wealth, you have to bet against that. The above are excerpts from an article* by (ema2trade.com) as posted** on SeekingAlpha.com and entitled The World Debt Bubble Is About To Burst.
The following article is presented by Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!) and the FREE Market Intelligence Report newsletter and has been edited, abridged and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.
[Below is the prevailing consensus:]
1. Stock Market Is About To Plunge
The stock market is massively overvalued. The total market cap compared to GDP is above 100%, while the average back to 1990 is 57%. We could see a huge plunge in about late June or early July as the Fed continues to taper, which should be good for gold. Initially we could see a period of deflation, similar to the end of 2008 and beginning of 2009. Gold fell at that time, but then came roaring back once we had a very aggressive central bank intervention and you are going to see that later this year….(as people see) that this economy is not getting better and that it (the economy) cannot function with QE the way they want it to.
2. Gold Market Is About To Bottom
The gold and silver markets have extended their corrective patterns during this most critical and decisive period of time and price. A cluster of major short-term, intermediate and long-term cycles converge around this time frame from late December to the August/September time frame. This is another reason why the expected bottom that started back in late December of 2013, is in the process of completing a major 6 month bottoming process ending by June 28, 2014. The gold and silver markets are indicating the weekly trend is down. A very good indication of increasing probabilities the cyclical expectations for a multi – year bottom completion will be validated by making new lows during this time frame. The weekly downtrend signals gold could drop to the .786 Fibonacci retracement at $1231 into the final June time frame, a completion of this second corrective wave usually takes place at these levels and it could unfold anytime. Short-term, intermediate and long-term traders/investors should use this final window of opportunity to trade short – term and accumulate to build a long – term bullish position as current prices are truly in a historic environment when fortunes can be made in a relatively short period of time. The next 2 to 3 years will go down on the books as such a period of time in history.
3. Bond Market Is About To Collapse
“I believe the collapse in the 10-year note will be very close to zero,” says Michael Pento, founder and president of Pento Portfolio Management. “Not only because of our own internal, intrinsic weakness,” but also because China’s economy, especially their real estate market, is slowing. China’s 10 biggest banks reported that late payments on loans reached a 5-year high. Pento argues that, “The crumbling economy in China, the insolvency in Japan and our own intrinsic economic weakness will lead to “a global recession/depression, and that is the only reason why the yield on the 10-year note has gone from 3% to 2.44% in the matter of just a few months in spite of the fact that the Fed is tapering bond purchases” and political leaders and the mainstream media are saying that economic growth is about to accelerate.
4. World Debt Bubble Is About To Burst
The picture the mainstream media and Washington paint of growth is unrealistic. Q1 GDP growth was an anemic 0.1%, Home ownership rates are the lowest since 1995, 49% of Americans are on some form of government assistance, and the unemployment rate is still at 12.3%. The labor participation rate is 62.8%, which is the lowest since 1978. There are 1.3 million fewer jobs than when the Great Recession began. We are also “in the midst of a huge debt bubble.” Chinese government debt is up 25 times since the year 2000, while Japan has $10 trillion in debt, which will take 56% of government income to just pay the interest on in the near future.
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.
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