Sell and stay in cash. The bubble is about to pop.
1929 - The great depression causes
- Too much leverage trades and speculations
- Low interest rates
- Production declines
- Too much unemployment
- Struggling agriculture sector
2021 - Will the history repeat itself?
- Too much leverage trades and speculations (stock market and cryptocurrency assets)
- Historical low (0.25%) Interest rate (2021) encourage people put money in stock market instead of saving it
- Production declines during covid pandamic, which makes lack of supply. Therefore it causes price of goods goes up, in terms of steels, corns, oil, and almost every commodity. Higher inputs costs to be absorb by manufacturer because it can't fully transfer to higher cost of production fully towards consumers good.
This will discourage manufacturers to continue produce at a loss or low margin, which essentially reduces productions and create more unemployment/uses machines to replace human work force. Agriculture also will face the same problem as high input costs.
- The record high money circulating in the US stock market, instead of flowing to the real market. It resulted overvalued or hype valuation in all stocks prices.
- US government had already uses all their bullets to save the companies, financial market in the Covid 19 Pandemic.
It means that if sooner, we had a crash in the stock market, i do personally belives the government will not have more options/tools to interfere the market.
- China Evergrande Property Bubble pop will may be another catalyst to make the stock market recover even more painful or harder to recover.
Questions: Will we head to a deflation or inflation? We will never know because we can't guess government movement on how to interfere or protect the market. But what we can do is, protect our investment position safely because there are too much uncertainty in the market.
Disclaimer: The content is only for sharing, discussion and field analysis, not an investment advice, buy or sell at your own risk. Please Like and Share. The final decision is always yours, thank you.
https://klse.i3investor.com/blogs/followtrend/2021-10-17-story-h1592739074-A_crash_is_coming.jsp
