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Market Crash likely soon! Why?

February 27, 2013

The fundamentals for economic growth have not improved in recent months and our Central Banks continue to manipulate the ‘prices’ and ‘interest rates’ in the global markets. This is leading to a stock market crash at some point!

My sense is that the coming market crash will occur as sentiment continues to deteriorate globally. The big factors that could change sentiment soon are the increasing oil prices and gas prices. We are now approaching an average gas price of $4.00/gallon. This is a crunch point for the American markets.

The other major change now emerging is the reduction of wages for the common working person. Taxes have increased over 2012 levels and this will likely continue to depress sentiment going forward. Unemployment is not really improving and the number of Americans on food stamps is still increasing (now some 48 million). As affordability cuts into home buyers plans we could also witness a coming decline in the housing sector. This will further decrease sentiment and overall confidence in the markets and our Central Planners.

The additional factor that is rapidly emerging is a general awareness from financial advisers that we now have a virtual (digital) dollar which can be created ‘out of nothing’ by mostly one person, Bernanke and his group think committee. Bernanke is prone to continue with his virtual dollar manipulations as this process is so easy and immediate. With the click of a computer key, Bernanke can increase his computer account (called SOMA) and distribute these ‘counterfeit’ digits to anyone he desires (especially in an emergency situation).

Our Congress has little understanding of the operations at the Fed and their ability to manipulate the markets with their high-speed computer actions. These actions of Bernanke and other Central Bankers will gradually create new distortions in the markets which will then lead to counter actions by other Central Banks. Currency Wars will continue as each country must protect their own interests. All these manipulations by these Central Planners will erode confidence in time. This will then lead to a market crash at some point!

Once a market crash gets started, it will be difficult for the Central Planners to change the sentiment within the markets. Traders now can act instantaneously in real-time to protect their financial positions. If a herd mentality emerges within the trading community, then the Central Bank manipulators will have difficulty reversing this trend. My sense is that the markets are now on a knives edge. This means that an emerging ‘black swan’ event can set off the changes in confidence leading to this coming market crash.

Watch the markets in the coming weeks for the beginning of a change in sentiment and confidence. The sequester process may also start this change in sentiment. That is my view as of today! A market crash will likely lead to a trend that will last for months. What will Bernanke and the other Central Bankers do as these events begin to emerge. Will these policymakers panic and create hyper-inflation…or will they panic and decide to allow the markets to correct (crash)? My sense is that a deflationary crash is evident! I am:

2 Comments leave one →
  1. March 2, 2013 7:55 pm

    Thanks for websites that forecast a coming crash. I agree. D



  1. realism about investment risk and opportunity | power of language blog: partnering with reality by JR Fibonacci

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