If you’ve been reading here for a while, you know that I care deeply about your inner peace and well-being. So, at first glance this post title may seem off topic, but in reality I feel compelled to write about what I see in the markets so that you can prepare yourselves. Preparedness yields some peace of mind.
You may have gleaned from posts that I’m an entrepreneur, PR professional, writer/author and amateur perfumer. But, I’ve never mentioned that I love reading stock charts and am pretty darn good at it. We all have our quirks right! Anyway, I’ve been reading charts for more than 20 years and right now I have a very bad feeling about what is coming.
Let’s get right to the point. The dollar has been plunging lately. Many are attributing the weakness in the dollar to our massive debt. The dollar declined 54.7 percent against the euro between 2002 and 2012. That is because U.S. debt almost tripled during that period, from $6 trillion to $15 trillion. Well, guess what, the debt is now $19 trillion. Put on top of that the biggest buyer of our debt in the past, China, is now a net seller of our debt and you can see what other countries think of our currency.
Now look at the bank stocks. Currently they are rolling over. You can go to stockcharts.com and look at the biggest banks: bac, gs, wfc, c, jpm and see what I’m talking about. Also, if you are familiar with Elliot wave theory, you can look at a chart of the S&P 500 and see that the big run since 2009 appears to be in its fifth wave. The fifth wave is the final leg up before a correction.
Every other day CNBC seems to have guests on that assure us that there’s no reason this bull-run shouldn’t continue. I think they are just trying to postpone the inevitable. Anyway, my final bit of evidence is the rise in bitcoin. A bitcoin was worth about $1600 at the beginning of May. Just a month later, now June 1st, it is at $2456. Some think it will rise to as much as $6000 by the end of the year. Bitcoin is a cryptocurrency that is not tied to any bank. Why do you think there is this kind of mania and surge in this digital currency?
Okay, now that we’re all sufficiently alarmed, let’s think of how we can possibly be prepared for a dollar collapse and the worst recession/depression we’ve seen in this lifetime. Now, I’m no financial advisor or survival expert (so please do your own due diligence and all that legalese a good attorney would insert here).
Here’s what I would do:
1.) Watch the dynamic yield curve. Here’s the link, http://stockcharts.com/freecharts/yieldcurve.php. And, I promise there is no affiliation here. They have just been my go-to for charts for many years. If you hit the animate button at the bottom of the chart you can see, over time, what happens when the yield curve flattens out or inverts. When that happens, you can bet I won’t have my money in the market any longer.
2.) Get your house paid off now. Enough said.
3.) Have a store of dried and canned foods.
4.) Set your google alerts for ‘Michael Burry’. He is the hedge fund manager that was featured in the movie the Big Short. He predicted the 2008 recession/derivatives debacle and shorted the market prior to the big slide. He seldom speaks, but when he does, we should have our radars tuned to hear what he has to say.
5.) Start cultivating your acceptance of a life very different from now.
Prepare now my friends. I think it will help. Also, don’t worry – that never helps. We are strong. We are survivors. And, we can get through whatever comes. Also, if you have survival or preparedness suggestions, please, please, leave them in the comments below! Blessings.
Sandra M. Bell
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