I believe the main sentiment for the dollar will remain bearish, as a result, we might begin to see a rise in commodity (AG/AU) again.
Alot of things concern me regarding the dollar and markets as a whole.
The first thing that I would like to point out is how the sharp decline in the US dollar has resulted in several commodity markets to rise, most notably gold.
As we know Gold is often used as an indicator to gauge fear across markets and investors, the recent pump on /GC to an all-time high of $2089, and the sharp decline of the dollar leaves me with 1 question, is the stock market genuinely at risk for another major crash?
Let's take a look at some of the things happening right now.
Reasons I think we might be in a bubble (Stock & Debt bubble):
- Unprecedented mounting debt due to COVID-19
- Extremely low-interest rates (0.25%) would not be surprised to see 0% or even neg interest rate following or going into 2021
- FED throwing out cash like its candy
- Unemployment and stimulus packages
- The eradication of physical cash notes (Changing into a cashless society, thanks AAPL)
- Overall PE ratios across markets hyper-inflated / overvalued
- The most leverage/margin ever offered to literally almost everyone.
- Long term debt cycle has begun (Last long term debt cycle was in 1930 aka one of the biggest economic ass raping in history, 75 years ago)
- Purchasing of financial assets by the government (Treasuries and bonds most notably) meaning they are injecting money/debt "Liquidity" into the markets to try to expand, I think that this is where things can take a horrible turn.
I'm not sure how much more debt we can accumulate without eventually, in the near future switching to another form of currency, perhaps gold-backed crypto, or really anything that's not the dollar and is backed by some form of metal/commodity.
Let me know your thoughts and correct if I'm wrong on anything, safe trading!
Ray Dalio on Long term debt cycle
finance.yahoo.com/vi...-term-022249474.html
Alot of things concern me regarding the dollar and markets as a whole.
The first thing that I would like to point out is how the sharp decline in the US dollar has resulted in several commodity markets to rise, most notably gold.
As we know Gold is often used as an indicator to gauge fear across markets and investors, the recent pump on /GC to an all-time high of $2089, and the sharp decline of the dollar leaves me with 1 question, is the stock market genuinely at risk for another major crash?
Let's take a look at some of the things happening right now.
Reasons I think we might be in a bubble (Stock & Debt bubble):
- Unprecedented mounting debt due to COVID-19
- Extremely low-interest rates (0.25%) would not be surprised to see 0% or even neg interest rate following or going into 2021
- FED throwing out cash like its candy
- Unemployment and stimulus packages
- The eradication of physical cash notes (Changing into a cashless society, thanks AAPL)
- Overall PE ratios across markets hyper-inflated / overvalued
- The most leverage/margin ever offered to literally almost everyone.
- Long term debt cycle has begun (Last long term debt cycle was in 1930 aka one of the biggest economic ass raping in history, 75 years ago)
- Purchasing of financial assets by the government (Treasuries and bonds most notably) meaning they are injecting money/debt "Liquidity" into the markets to try to expand, I think that this is where things can take a horrible turn.
I'm not sure how much more debt we can accumulate without eventually, in the near future switching to another form of currency, perhaps gold-backed crypto, or really anything that's not the dollar and is backed by some form of metal/commodity.
Let me know your thoughts and correct if I'm wrong on anything, safe trading!
Ray Dalio on Long term debt cycle
finance.yahoo.com/vi...-term-022249474.html