{"id":90070,"date":"2016-05-20T09:32:59","date_gmt":"2016-05-20T13:32:59","guid":{"rendered":"http:\/\/countingpips.com\/?p=90070"},"modified":"2016-05-20T09:41:57","modified_gmt":"2016-05-20T13:41:57","slug":"is-this-the-end-of-the-road","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2016\/05\/is-this-the-end-of-the-road\/","title":{"rendered":"Is This the End of the Road?"},"content":{"rendered":"
May 20, 2016<\/div>
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By Chris Vermeulen –\u00a0www.TheGoldAndOilGuy.com<\/a><\/strong><\/p>\n

In May of 2008, there was a very similar stock market \u2018rally\u2019 as compared to today\u2019s \u2018rally\u2019.\u00a0 Investors believed that the \u2018turmoil\u2019 during the latter part of 2007 and the early part of 2008 was permanently over and that we were headed towards a strong economic growth!<\/p>\n

In actuality, it merely masked the \u2018declining economic collapse\u2019.\u00a0 The same situation is happening, all over again, even as you are reading this article.\u00a0 There are numerous flashing red lights,<\/em> currently while the stock markets is \u2018collapsing\u2019 once again, just as it did during the beginning of the spring of 2008!<\/p>\n

\"may201\"<\/p>\n

There have now been four consecutive quarters in which corporate earnings have declined. The profits from the SPX were down over 7.1 percent during the first quarter of this year.<\/p>\n

The U.S. markets have now entered the next phase \u2013 a stock market downturn. The global financial system is now starting to \u2018unravel\u2019 which will have far reaching implications!<\/p>\n

In fact, the real truth of the matter, is now about to worsen, from this point of time and onwards!<\/p>

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While this country has 100 million American people, who are unemployed and searching for work, and yet are unable to find any, I say this is a major RED WARNING ALERT<\/em><\/strong> that must now need be heard loud and clearly!<\/p>\n

According to the FED, forty-seven percent of all Americans are not able to come up with $400.00 in case of an actual emergency situation, that they may incur. \u00a0They would either need to sell personal belongings or borrow the money, somehow!<\/p>\n

The majority of Americans are now living from paycheck to paycheck: (http:\/\/www.theatlantic.com\/magazine\/archive\/2016\/05\/my-secret-shame\/476415\/<\/a>).<\/p>\n

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In December of 2015, when the FED raised their interest rates, for the first time, in almost a decade, they had projected a one percent \u2018hike\u2019 in 2016. I was apprehensive of their prediction and had forecasted that the FED would not \u201cmaterially\u201d hike rates!<\/p>\n

The FED later backtracked their estimates to half of a percentage point \u2018hike\u2019, in 2016 during their March meeting.<\/p>\n

The chances of a June 2016 \u2018hike\u2019 are low to nil as the \u201cBrexit\u201d referendum is being held only one week after that FED meeting. If the U.K. votes for a \u201cBrexit\u201d from the European Union, then the financial implications may wreak havoc on the already fragile global economies. Hence, the FED will not chance raising it especially before such a significant and important event.<\/p>\n

Similarly, post July 2016, the U.S. Presidential race will \u2018heat up\u2019 and the FED will not want to raise interest rates prior to knowing what the next Presidents\u2019 \u2018economic policy\u2019 will be. However, if the world economy falters, the FED will have to follow the other Central Banks and \u2018restart\u2019 QE.<\/p>\n

The timing of a stock market \u2018crash\u2019 is presently within our reach. All signs are pointing towards a higher price for gold; both in the near-term and the long-term. \u00a0Enforced negative interest rates which are more of the FEDs\u2019 Quantitative Easing (QE) and the race to devalue the U.S. dollar. This proves to be quite bullish for gold. The timing of all of these concurrent events are affecting the gold market!<\/p>\n

The rise of the stock market is widely viewed today as the result of \u2018Quantitative Easing\u2019(QE). \u00a0A bandage was placed on that financial crisis which was never structurally repaired. Today, I believe that investors have long since given up on the FEDs\u2019 bond buying as a means of repairing the economy.\u00a0 There is so much skepticism, at this point, as to what direction the equity-market is trending \u2013 Up or Down?<\/p>\n

SP500 Weekly Chart<\/strong><\/p>\n

\"may202\"<\/p>\n

The response from the FED<\/a> was to \u2018debase\u2019 the U.S. dollar as reflected in its\u2019 decline of 4.7% thus far in 2016. \u00a0Treasury bond yields have dropped well below 2%.\u00a0 Something has truly gone horribly wrong within the economy!\u00a0 However, the FED is trying to put up a brave front.\u00a0 They have asserted that they are considering a \u2018hike\u2019 in their June 2016 meeting, but this is very misleading as there will be no \u201cmaterial\u201d short-term interest rate hike in my opinion.<\/p>\n

Monthly US Dollar Index:<\/strong><\/p>\n

\"May203\"<\/p>\n

Weekly SP500 Stock Index<\/strong><\/p>\n

\"May204\"<\/p>\n

Daily Gold Chart<\/strong><\/p>\n

\"May2015\"<\/p>\n

These problems that exist within all of these markets are that of the global Central Banks, which are sending their mixed messages. They are actually driving the dollar higher for the time being.<\/p>\n

Two weeks ago, the Bank of Japan did not provide more monetary accommodation, as was expected, at that time; whereas last week, BOJ announced they would do so. Therefore, the dollar rose up whereas other currencies, including the Euro and the Yen, fell rather hard.\u00a0 This reaction resulted in both metals and stocks going down.<\/p>\n

The three Central Banks have now reversed their prior announcements regarding monetary policy, within the last month. First, the ECB and then the FED and now the BOJ.<\/p>\n

The FED is currently working on a different scenario in which they are stress testing negative Treasury bills. This scenario, in which\u00a0the interest rate on the three-month U.S. Treasury bill\u00a0becomes negative, in the second quarter of 2016 and then declines to -0.5% remaining at\u00a0that level until the first quarter of 2019.<\/p>\n

The Fed stated,\u00a0\u201cThe severely adverse scenario is characterized by a severe global recession, accompanied by a period of heightened corporate financial stress and negative yields for short-term U.S. Treasury securities.\u201d \u00a0 (http:\/\/www.bloomberg.com\/news\/articles\/2016-02-02\/rates-less-than-zero-is-bank-stress-fed-wants-to-test-in-2016<\/a> ).<\/p>\n

Gold prices are surging this year and that has \u2018the smart money\u2019 flocking towards the yellow metal.<\/p>\n

During this global contraction, it is only a matter of a very short period of time before the stock market reflects this reality.<\/p>\n

Truly, this is the beginning of \u2018The Great Reset\u2019!<\/p>\n

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CONCLUSION:<\/strong><\/p>\n

In short, big things have slowly been unfolding that will be not only life changing but will change the entire financial situation of the world.<\/p>\n

The good news is that there are many ways to profit and prosper from these events. A few simple and well time positions can yield huge results for the savvy trader and investor.<\/p>\n

Follow my lead as we place special ETF trades to prosper during the pending market collapse: www.TheGoldAndOilGuy.com<\/a><\/strong><\/p>\n

Chris Vermeulen<\/p>\n

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 <\/p>\n","protected":false},"excerpt":{"rendered":"

By Chris Vermeulen –\u00a0www.TheGoldAndOilGuy.com In May of 2008, there was a very similar stock market \u2018rally\u2019 as compared to today\u2019s \u2018rally\u2019.\u00a0 Investors believed that the \u2018turmoil\u2019 during the latter part of 2007 and the early part of 2008 was permanently over and that we were headed towards a strong economic growth! In actuality, it merely […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-90070","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/90070","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=90070"}],"version-history":[{"count":5,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/90070\/revisions"}],"predecessor-version":[{"id":90077,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/90070\/revisions\/90077"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=90070"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=90070"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=90070"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}