J.W.T.S. August Finance Report

TVC:DJI   Dow Jones Industrial Average Index
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As August begins, our market environments continue to decline and global controversies are coming to a boiling point. China is suffering from the biggest housing crisis its seen in history, while the U.S. has entered a period of economic recession. Supply chain issues continue to build as trade sanctions between Europe, Asia & the U.S. continue to disrupt the flow of products needed around the world.

At the beginning of August, China started threatening the United States, because Nancy Pelosi was scheduled to take a trip to Taiwan. This is to solidify our diplomatic ties with Taiwan. If you are not familiar with Taiwan, it is a large island off of the Asian continent, that China failed to capture and sway the regime of after WWII. Taiwan considers themselves a country, but China does not and lately China seems to be willing to go to war about it. This is the current conflict in the Indo-Pacific region of the world that America is preparing to counter, if things go wrong. China does not believe Taiwan exists and that it is a part of China. This same event silently happened to Hong Kong throughout the 2020 recession. This has created a long-standing tension in this region, because the U.S. backs the democracy of Taiwan. We also participate in trade with Taiwan. It is the largest producer, in the entire world, of microchips that fuel the tech industries around the world. Here lies the problem.
As of today, August 3rd the Strait of Taiwan, a major shipping channel of the world, is now being used for military exercises by the Chinese, thus shutting down all trade lines through the strait. Chinese officials had been threating a dramatic response, if Mrs . Pelosi had taken the trip to Taiwan and they delivered. Taiwan’s Strait is a key route for supply chains around the world, with almost half of the global container fleet passing through the waterway this year, according to data compiled by Bloomberg. However, only about 14% of China's oil and gas vessels have transited the strait this year, according to analytics firm Vortexa. This creates a serious issue for the ever-growing stress on the world supply chain. This is also after months of warplane fly overs and other concerning acts from the PROC to the Taiwanese. It is only a matter of time before the conflict conflagrates just like Ukraine and Russia. Call me crazy, but I think this is what would spark the Third World War.

On the topic of supply chains, more stress will continue to be mounted on these structures. As tensions between the European Union nations and Russia come to a boiling point, there are serious economic effects happening in Europe. Sanctions between Russia, the United States, Europe, Asia and other institutions, have fractured market environments around the world. In July’s article I talked about the energy crisis that was developing in Europe, due to Russia’s halt to the flow of oil to European countries. This happened because sanctions put on Russia, because countries are unwilling to buy from them because of the current situation in Ukraine. This has now erupted into a full-blown energy crisis. Many different European countries are wondering where they’ll get their energy and gas from for the winter months of 2022, on top of how much more expensive their bills will be, now that these trade wars are in affect. European markets are going through one of the worst economic declines they’ve seen, since World War II. I believe we have not seen the worst of what is to come.

In China, there have been eerie reports of tanks being sent to cover the front of banks from protesters making bank runs. China is currently going through one of the largest recorded housing market collapses in history. One of the main triggers of this was the collapse of one of its largest financial firms in the country, Evergrande. This created an economic contagion effect the country is currently experiencing. China’s housing market works extremely different than ours does in America. In America, you go and view houses, then you buy the house that’s roomy, with the nice white picket fence in the front yard that has a big green lawn. In China, for the major part of home buyers and new home owners, you pay for a house and it is built for you in a certain amount of time. When is negotiated upon between the buyers, banks, lenders and builders. Their economy exploded upwards over the last few years. Unfortunately, what these institutions promised the people, for a large portion of investors and home buyers, has not come to fruition. Portions of these companies are creating huge plots of real estate, many that are the size of skyscrapers, that are completely uninhabitable. This has the lead to the people who have gone through the system of paying for a home before it was finished, being left in the dust. Many of these financial institutions are falling into distress as the contagion effect of Evergrande collapsing, and many other reckless monetary practices, have now shocked their economy. People are mad. Another major issue in China is the implementation of their new Central Bank Digital Currency or CBDC, for short. This will be the future of money in the coming decades.

Here is a terrifying story related to the tanks I mentioned earlier. A Central Bank Digital Currency is a currency that’s regulated and distributed through a ledger-based system, between the central bank , a country and a citizen. Let’s say I’m a citizen of China. This CBDC is called, the digital Yuan, a real thing. I get a card, distributed by the government, that my income gets put on when I get paid. There is a catch though, because China’s monetary system is, scary, for lack of better words.

In China, they use a Social Credit Score system. This means that all the known metrics of the individual are collected by the government, measured, weighted and cataloged. Everything. It is later used when diagnosing what opportunities the person will get from educational systems, financial institutions and so on. This is becoming the “norm” of their policies, especially in the upper class. They have a national facial recognition system that is active 24/7. It is in almost all parts of every major city and national transportation system in China. You are always being watched. Peoples bank accounts are being locked from being used. China can do this, because they’re using a digital currency to establish the flow of their mediums of exchange they use in their market. They can do this for any reason. Maybe they don’t want people drinking, so you can use your CBDC at a bar or to buy alcohol at a store. This goes for anything. All they have to do is create that program in the system code of the CBDC. These systems are now what they are trying to force people to live by, not the Chinese, the Central Banks. This has happened to many people in China already. Protests and riots have broken out around the country and bank runs have started to happen. In response to one protest, the PROC used a tank to block the entrance of one bank and break up the protest. The PROC denies these claims. Protests continue to flare up around the country and bank runs continue to happen.

American markets have pulled back from their downturn after July and a reaction rally has been in effect, up until today. Momentum seems to be topping out, especially over the last few days. I believe in August we will see consolidation, over the next couple days in the stock market, for its next move down. The Federal Reserve will be drastically increasing interest rates and selling off their balance sheet over the rest of this year. This is to “combat inflation and fix the recession” that we are currently experiencing. That is, if we are in an actual recession. White House officials reportedly tried to deny the fact that we are in a recession, starting a large debate of what actually defines a recession and if it should be redefined for the current conditions of our markets. It is currently defined as, “Two negative periods of GDP (Gross Domestic Product) losses over the period of a Quarter.” The most concerning things happening in the financial space right now are the ultra-wealthy billionaire investors that are boldly coming out and telling people a new world order type situation is currently happening and we’re watching the happenings play out, right in front of us.

One person to acknowledge and read up on is a gentleman named Zoltan Pozsar. He is one of the most knowledgeable members of the world monetary policy community and has worked for multiple world class financial institutions and networks, that regulate and create the rules banks and continents operate by. This man is currently saying the Federal reserve will push the world market economies into a Depression.

We also have the legendary investor, Michael Burry, from the Big Short, making his next play on the European markets we mentioned earlier. He says we are about half way through the drop we saw since the beginning of 2022 and is putting his money where his mouth is by shorting the EU50, like he did with the housing market in the 2000’s.

Ray Dalio is the owner of Bridgewater Associates, which is one of the most successful investment firms on earth. He is one of the most successful investors in history and his strategies, not only in investing but in the compartmentalization of life, are some of the finest systems a human being has developed. He is currently calling for China to overtake the power structure that the U.S. has held since WWII ended.

The list goes on and needless to say, it’s a very unstable time to be alive and our markets are reflecting it. My overall consensus is very bearish .

DOW Jones Industrial has seen a +7.30% from July 1st. It is sitting between a major region of support and major region of resistance, but it’s about to be rejected by the 200-day MA.

The NASDAQ Composite has seen a +15.5% gain from July 1. We’re about to be rejected off of the 200-day MA. Momentum has topped out. We’re currently in a major area of resistance.

S&P 500 is up 10% since July 1. We are far overextended in the momentum of this stock. Again, expect a pullback in the U.S. Stock Market overall.

Europe’s top 50 companies, EU50. Looking to make a move down. U.S. Oil is going to be problematic due to sanctions and supply chains.

Crypto Total Market Cap -65% from all-time high. Cryptocurrency institutions are in a seriously bad spot right now. I’m still firm on my analysis on Bitcoin and it is still holding true. View, "Has TOTAL1 seen a bottom?" Ethereum is in the same position as BTC . I’m very worried about a selloff in the traditional markets with institutional balance sheets of crypto. This will most likely trigger the next flash crash.

Currently I am predominantly short on everything. I have dividend stocks in my portfolio I’ll hopefully pass onto my children, but that’s for passive portfolio income. I don’t worry about the net profit or loss on these because I’ll never sell them and they’re accruing me money over time. Anything that I am trading, rather than investing in, are short positions currently. I have been taking long positions in several inverse ETF’s that you can see in my daily watchlist, but I am very bearish at the moment.

In the cryptocurrency space I am still yield farming and taking leveraged intraday positions. I am adding 25-70% of value a week onto my cryptocurrency portfolio. This is my only “risk on” investment, most of the profits goes to capital gains taxes and buying dividend stocks. It is also what I generate the most capital from over time.

Continue to be safe with your investments. On 8/15 my guide will finally be done and you will be able to download it for free. Until then, keep a watchful eye on the markets.

A FREE ebook of my strategy is available on my Discord. Come join my community of investors, traders, portfolio managers, blockchain enthusiasts and everyday people, looking to trade the world markets. I also have a Patreon for paid content!

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