The future of the global markets is volatile. This past week, china's stock market has dropped 7% twice, causing a trading halt for the rest of the trading day. It took 29 minutes of trading to hit this mark today. This caused the dow futures to hit a low of 16,400 roughly, going down about 2.5%, which is about 500 points from 16,900 its previous close. At opening, the bids took the price up a bit higher, and it closed at 16,500. With some countries such as China, and Canada in a recession, you can expect this to cause a chain effect that will drag the U.S into a recession to. Knowing all this, what can we do to stay safe? Americas stock market is most likely to be dragged down along with the rest of the global stock markets, so you don't to be caught in them until valuations of the company's become an excellent opportunity. How do I know that stock prices are going down? Well one reason is the fed is raising interest rates, which slows growth, inflation, and is a measurement used to prevent creating bubbles if certain markets get to hot. We already have low growth. Inflation can be seen in certain places on the economy, such as the stock market, real estate, and food. The federal reserve says inflation is low though, so we can expect them to try to fight that. Since they stopped QE, which is another name for printing money, and interest rates are going up, slowing any growth that we currently have, and a lot of country's are starting to go into recession, this is all deflationary. Baby boomer's also spend less during retirement, which is deflationary and them all pulling money out of their pensions and 401k's in waves, which just started a couple of years ago, will not help the stock market go up either. The stock market has not done anything really in the past 15 years. The risk to reward for anyone in a mutual fund has risk outweighing the reward big time. Dow 10,000 is alot more likely then dow 20,000 unless more money is created which may cause people to lose faith in the dollar if they continue to do that, which will lead to high inflation. The real estate market is going to go down with higher interest rates. Speaking of oil, in my city, a house that sold for 760k just sold for 1.09m after 3.5 years, which is 330k rise, which is pretty much a 45 percent increase. Risk outweighs the reward on that one for sure. Canada's real estate market is a bit too hot for my liking. Positive cash flowing real estate is good still though. Oil still has a bit to go down since we are in a deflationary period. It could go as low as 10 a barrel but I think 20 dollars a barrel is a great opportunity still. So what I think is the place to be is in two things. The american dollar, or silver and gold. The dollar will get stronger as people run to it in economic uncertainty. Silver could go down to 7-8 dollars U.S which is about a 50 percent drop from the price it currently is but at that price, the premiums you pay will be higher than the current price you see today. That is what happened in during the crisis, as silver went down in price, you were still paying 20-30 dollars for silver since the supply was no where to be found. Since the price of silver has already crashed about 70 percent, it has started to slow down production but demand has been continuing to grow. If prices crash to 7-8 dollars, companies are going under, production will crash, and anyone who owns shares of company's that can survive this period, and physical silver will be getting ready to watch their value go up dramatically. I do not know if the ETF SLV will survive though, so I would rather pay a premium to insure myself to have it in my possession. My prediction is silver and gold bottoms in 2016, global recession hits before second quarter of 2017, maybe sooner, and the dollar hits new highs. I believe the stock market will end lower then it started, but I do not know how low it will go. It could make a new high but I'd bet against that by owning silver. I believe we are due for another crash and my guess is something happens after U.S elections. They always push the problem to the next person so they can deal with it. Janet yellen will be cleaning up Bernakes mess and I would assume its after elections if they can hold everything together till then. Why do I feel so bearish to the global economy? The problems that caused the 2008 crisis were never fixed. They just printed money, bailed out corporations, and pushed the problem into the future. It will be interesting to see how the future plays out, Im not even sure if interest rates can continue to rise. The government can't afford its debt if rates start to rise. I could see negative interest rates appear in america, though I would be surprised though to see that. I have learned to expect the unexpected though when it comes to this corrupted system.
Thank you for reading, and I hope you all take action to buy silver and gold, as well as silver and gold mining shares. Add a bit of the US dollar in your portfolio to make it a bit less volatile. The bottoms are coming in this year, if we have not already reached them.
US dollar value:UP
US stocks: down
Silver: down then up.
china: down. Bear ETF
Cash position is good to hold for up coming opportunity
Any money printing or lower interest rates could change these predictions for 2016
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