Must see video…Jim Rickards, the author of CURRENCY WARS discusses monetary policy world wide. Jim Rickards is…without a doubt…one of the most knowledgeable economists in the world.
I was going to enter a short position on Friday, but didn’t.
- It’s Friday, entering an order on a Friday is risky and you want to keep the risk to a minimum.
- As you can see in the chart above, the price of the Dow Jones Industrial Average closed right at support, support hasn’t been breached yet.
- The next pivot point is slated for around November 9th, NOTE…support or resistance is also part of the model. So November 9th could be a breach of support or resistance as well.
- As you will see in the chart below of the Russell 2000, support hasn’t been breached.
Looking at the chart above of the Russell 2000, you can see that it is more volatile than the Dow Jones, so it’s not out of the realm of possibility that both the Dow Industrials and the Russell 2000 would breach support on the same day. We have had our pivot point short term/intermediate term top. When the index’s tag a top or bottom on the same day that is an indication that there is a mood change in investors across the board and change is inevitable. Reason being, all of the money is on the same side of the market, therefore, a high percentage of stocks are rolling over and all of the index’s would relay the same message at the same time. I don’t have a chart of the Dow Transports but that high was in place, June of last year, so there is divergence.
One thing about the market is, things take time to play out, you need to be patient. Signs in this market dictate to me that this is not a time to be long, might be too early to be short, but the odds of a melt down out weigh a sling shot move to the upside. We could see a similar thing transpire like 2008 only for the market to sling shot back up. When you watch the video of Jim Rickards discussing Monetary Policy, the ultimate result will be inflation in the end.
Since there’s an estimation of 1 quadrillion dollars of total debt in the world and world GDP is around 50 trillion, a debt to income ration of 20:1. that’s the same as saying my income is $100,000.00 and my total debt load is $2,000,000.00. First of all the bank would do that to me because I would surely fail, since there would be no asset attached to the debt and if there were assets attached, the income isn’t enough. There would be only one of 2 solutions.
- Bankruptcy in the end.
- Consolidate my date into one easy monthly payment and extend my mortgage into a 200 year term.
So Monetary Policy right now in the United States is to print it’s way out of this mess and if the other countries in the world don’t do the same then there will be even more suffering. Make sure you watch Jim Rickards discuss the Fed and Monetary Policy.