Your post is very much how I feel about millennial and the coming socialist takeover. 1) they have a tough environment they will have to contend with (they can thank their Baby Boomer parents for getting us to this point. 2) They aren't equipped with the toughness to handle it and power through. 3) They will blame the wrong person and system (Trump and Capitalism). 4) They will bring about the wrong solution (Socialism), which will doom all future generations of the US. We only have to look at what is happening right now in Venezuela to see our future. Socialism can so easily tip over into Dictatorship, especially when you have a compliant FBI. Look at how hard the FBI are trying to implement a soft coup against Trump. The political corruption among our security services is just astounding. I still think the CIA and FBI do an excellent job of protecting us from bad people like terrorists, but the fact that they have become so partisan is the absolute darkest of stains on their organizations. That one stain overshadows EVERYTHING else they do. I hope Trump and the GOP clean house at the FBI.
As for the economy and stock market, I hear a lot of people saying that 2018 should be fine and we really have to watch for 2019. They all cite history as why we see a 6-12 month lag from the indicator of their choice to the recession. But John, here's something to think about. I've noticed that, because we now solidly live in the information age, things happen MUCH faster. Information gets disseminated instantaneously and anticipatory actions are shortening timelines. I would write to you what all the indicators are that I watch, but there are so many and they are ALL so negative. Probably the key thing I'm watching right now is QT. The Fed is right on schedule with QT. That is going to continue to build all throughout 2018, until by the last quarter of this year, they are rolling off $50B a month, $150B a quarter, $600B annualized. If that doesn't have a negative impact on the stock market, then I will be absolutely shocked. The stock market players are going to understand that and anticipate that. I think it is around 75% probability we get a 20% or more correction in the first half of 2018. I think it is 95% probable we get a 20% or more correction by October. Also, when the correction comes, bonds will not be a safe haven. Long dated, >5 yrs, will most likely get hit as well. So cash is the only safe place, maybe gold, but I wouldn't count on that. If we don't get a broad asset correction in the timeframes and magnitude I've outlined, then we simply don't live in a world where anything makes sense anymore.
As you know, I've been 35% cash, 20% stocks, and 45% short dated TIPS and gov't bonds since July 2017. I'm already hunkered down and ready to buy things at a discount. |
