The Global Financial Crisis of 2007 wiped out over 50% of the Australian market share and they are still some 20% below their peak. Aussie's are still not back to a break-even point after a decade. One has to wonder if their losses will ever be recouped in light of the debt the world has incurred and the debt President Trump's plan will incur rebuilding America to greatness again.
If you think that's a tough question, then contemplate how long it would take to recover from a 90% drop in your paper investments which is just what happened in 1929? It would not be a couple of decades but more likely a lifetime of 5 or 6 decades, similar to Japan's ongoing pain. Now, knowing that the markets are rigged by insider trading and high frequency trading utilizing ever daily changing high speed fiber optics, how could ANYONE believe that THEY could receive an honest return on their investment money?
Most DOW drops were fall failures from August through October and it appears we have escaped one more year? However, under current monetary policy, do you actually believe that we could have another 5-15 years before a 40-80% DOW drop occurs? Why would anyone risk losing their life savings for so little return? "Going on vacation" from the markets and returning after the market drops is usually an early summer decision, but my gut feeling is to suggest one stay on vacation a while longer.
The "Talking Heads" at the F.O.M.C. threaten to raise rates but realistically this would only hurt the government's debt costs which are undeniably un-payable. We will most likely see a quarter % hike and another quarter% before the end of the 1st quarter 2017 to Trump the new presidents plans but WHY, when the rest of the world has negative interest rates? The only reason our dollar is still the world's reserve currency is because the dollar is the least ugly of all its currency sisters if you had to marry one, and so the dollar continues to move higher. It is farcical watching central bankers persist in their failed strategies regarding zero and negative interest without their desired results. It reminds me of the Marxists claims that "communism has never been tried" or "we just need to stay true to communism's precepts and we will get it right and the time is now." Historical facts are ignored when just five Communist dictators: Mao, Stalin, Ho Chi Min, Pol Pot and Kim Jong II, killed over 100 M people in the last century, in less than a hundred years. More lives lost at the hands of ALL other leaders, over ALL other centuries in the world. Karl Marx's socialist ideas concerning society, capital and labor have always ended with dictators that wreak genocide and poverty on their populace. Today we see the effects of the poorly educated masses from our Department of the Uneducated whom have manipulated our youth to fight for entitlements and not the right reasons. You see, ALL of us are but slaves to the 1% and government has pitted us against one another for their continued control and gain. The right sees the stagnation of wages, the theft of our homes and businesses, but socialism is not the answer. Wake up America and let history be our weapon!
The celebration of the death of communist dictator Fidel Castro is the proof most people need to verify that socialism doesn't work yet it hasn't even interested the liberal leftists. The populace of Cuba started a party of the half century last week believing that, "The Wicked Witch is dead." Our snowflakes have not been educated with any reasoning or deduction skills putting the equation to a proof. Let me spell it out, Socialism does not equal freedom and free college does not equal jobs as we have seen for decades in Cuba as trained doctors and dentists earn less than $50 a day and the average man earns $20 a mo. Engineers work as farmers and taxi drivers, while doctors work as bakers and cooks. Castro stole $10 B in property from Cubans and farmers work the land but cannot own anything while all live in shacks and poverty. Is this what our young Americans want as they burn the American flag on campuses across the U.S.? If so they need to take their Spring break vacation or their semester abroad studies to Cuba and earn a real education in Capitalism. There Cubans start business but are only allowed to run one business and never expand and if the government discovers their true incomes the government takes over and operates their own stores as clothing and shoe retailers are all government run and poorly operated as is the norm for government. It reminds me of our local government that has taken over ambulatory services and trash pickup with none or very little competition on the tax payer's dime and we pay for services as well. Cuba is again another fine mess Obama has gotten us into by eliminating the trade embargo with Cuba. Now Trump is planning to pull back the reins, a rethinking of the lifting of Cuba's trade embargo, to negotiate with Raul Castro for a deal that improves lives for Cubans and Americans here at home. Hold on tight America, cause change is coming at breakneck speed with this President when he hits the ground running.
Once again the ONLY, old trick left of the Federal Reserve is to continue fiddling with interest rates, holding them close to zero which they have done for years and print and digitize even more cyber-free money for the banks. The consequences of holding down interest rates and printing money is negative to a positive economic environment however it will allow the newly introduced price tag for infrastructure spending the new administration is planning at a nominal cost to government. Only until China's hand is forced and they have had enough will they possibly introduce a gold-backed currency to dissolve the U.S. dollar hegemony but perhaps it would behoove the U.S. to beat them to the mark if there were any gold left in Fort Knox.
Negative interest rates do not encourage employers to hire and only encourages investment in marginal and poor projects at extreme yield and risk taking endeavors. Low interest rates lead to more loans flowing to marginal borrowers as the converse were true when rates were high as too few borrowers received loans at all. It punishes savers and retirees but what does government care about its citizens?
The FDIC and CFR continue to study banking runs of the 1920's and one would surmise that banking runs are a real possibility in the near future especially if the markets tank. ALL signs point to a correction scenario and usually after an eight year seated president are replaced as well as historical recessions and market drops occurring every eight years.
When banks fail, there will be NO available cash to be disbursed to depositor shareholders. The government's plan to eliminate the sinister and dangerous $100 bill, as they have the $500, $1000, $5000 and $10,000 in decades past, is to force everyone to keep their earnings and life savings in the banks under their control. We will continue to hear reports of digital systems getting hacked: banks, SWIFT systems, government spy systems, election polling machines and digital currencies like bit-coin. Maybe they will be legitimate hacking thefts, yet maybe they won't be, when a government becomes desperate for monetary funding as their only way to prop up their system by stealing all our savings.
I'd suspect that the government will continue to keep around some spare stacks of newly illegal $100's, enough to fill a couple of jumbo jetliners , just in case it becomes necessary to pay off some mullah's in Iran a couple of billion. Eliminating cash to squelch crime is about as illogical as eliminating guns to stop murders and confiscating all knives and bombs to prevent terrorism. How many more failed attempts of Keynesian "stimulation" must we endure? Their monetary policy will only work if we ALL comply, will you? A future without cash or real money, gold and silver, is a future of economic slavery for the common man. Don't expect ANY governance to quell the economic problems of this world? Only YOU can make rational decisions to protect yourself and take control of you and your family's future.