The Last Bubble Market
In spite of all pessimistic outlook, the market is strong. I think there are some reasons.
The asset market has risen for ten years. But the real economy has just begun to improve. Of course, the real economy is going down. This is not good and unfair. Should this world had to fall with despair?
Someone says the crisis does not come because everyone knows it. It means, the crisis is true but human response change the outcome
IMF said the corporate tax cut is useful until 2022. It means, It is good for companies now, but consumers do not have money and the government with debt will attack companies again in 2022. [Big global AI companies have to pay more tax. This is the destiny in this AI world]
So, many people thought the recession will not come until 2022. But the recession is coming now. And you may know the reason.
In spite of all the pessimistic theory, the Oil price is the clearest data to me. WTI price was 120$ [47.37 in the chart] in 2008. And it couldn't fall enough for many years.
And three years from 2015, the WTI price became 50$. So, WTI price can explain why QE couldn't save real economy until 2015 and why 2017 was the best year.
So, this world has got power. Maybe if someone didn't do anything to save this earth or the USA, we may be fine. But, the recession is coming now.
Today, ECB suggested quantitative relaxation. This is not strange because the EU is zero interest rate already and QE is the only one way. But this is a very shocking event. Typically, QE runs in a stock collapse state. Then, if ECB does it soon, what will do in a stock collapse state?
This is a dead-end. EU is in a recession state already. And they need QE. And QE can save the market. So, the market is strong. But the real economy is bad. They have to do QE until there is inflation due to consumption and investment. But when there is inflation, they can't raise the interest rate because of debt. So they are going to a long-term recession.
But, Japan did it. and the EU will do it. Then, will Trump do nothing? I feel Trump wants this. I expected the market crash until next year. And then QE. But Trump doesn't like this. So, this market may go until the end, until the big bang explosion if you can hear QE. So here is the new scenario.
1. The war with China - QE - the last bubble market [new]
2. The war with China - Stock collapse state - QE - the last bubble market [before]
3. Negotiations with China - Some China market opening.
But, I can't know about this is possible. A lot of money will be spent for the bubble and if the QE can't stop the decline, it may the final collapse. Then, the EU will be gone, The USA will be gone and we may live in China's world.
Don't ask about why the EU helps China. The USA will kill the EU. Then why the EU have to help the US. America's strategy is stiff poor. We will become live in the communism soon.
: Next QE - the last bubble market - MMT - [Hyper or Controlled] Inflation - New System
* [Hyper] Inflation = Bond collapse
* [Controlled] Inflation = Continuous debt repayment
* Caution
QE is useful for banks and for low bond interest rates. But banks are o.k now and the interest rate is low now. So why is QE useful? Even though Trump wants a QE, it may can't prevent the market crash down. Now, the EU is saying about a QE. So you can check how it goes on.
Howard Marks says QE is such a placebo effect. Here is his memo about the next QE and about the next crisis. He is asking a serious question about this market and the future.
Latest memo from Howard Marks: This Time It's Different
Related :
SURVIVAL : 2019, Hippie Village
The asset market has risen for ten years. But the real economy has just begun to improve. Of course, the real economy is going down. This is not good and unfair. Should this world had to fall with despair?
Someone says the crisis does not come because everyone knows it. It means, the crisis is true but human response change the outcome
IMF said the corporate tax cut is useful until 2022. It means, It is good for companies now, but consumers do not have money and the government with debt will attack companies again in 2022. [Big global AI companies have to pay more tax. This is the destiny in this AI world]
So, many people thought the recession will not come until 2022. But the recession is coming now. And you may know the reason.
In spite of all the pessimistic theory, the Oil price is the clearest data to me. WTI price was 120$ [47.37 in the chart] in 2008. And it couldn't fall enough for many years.
And three years from 2015, the WTI price became 50$. So, WTI price can explain why QE couldn't save real economy until 2015 and why 2017 was the best year.
So, this world has got power. Maybe if someone didn't do anything to save this earth or the USA, we may be fine. But, the recession is coming now.
Today, ECB suggested quantitative relaxation. This is not strange because the EU is zero interest rate already and QE is the only one way. But this is a very shocking event. Typically, QE runs in a stock collapse state. Then, if ECB does it soon, what will do in a stock collapse state?
This is a dead-end. EU is in a recession state already. And they need QE. And QE can save the market. So, the market is strong. But the real economy is bad. They have to do QE until there is inflation due to consumption and investment. But when there is inflation, they can't raise the interest rate because of debt. So they are going to a long-term recession.
But, Japan did it. and the EU will do it. Then, will Trump do nothing? I feel Trump wants this. I expected the market crash until next year. And then QE. But Trump doesn't like this. So, this market may go until the end, until the big bang explosion if you can hear QE. So here is the new scenario.
1. The war with China - QE - the last bubble market [new]
2. The war with China - Stock collapse state - QE - the last bubble market [before]
3. Negotiations with China - Some China market opening.
But, I can't know about this is possible. A lot of money will be spent for the bubble and if the QE can't stop the decline, it may the final collapse. Then, the EU will be gone, The USA will be gone and we may live in China's world.
Don't ask about why the EU helps China. The USA will kill the EU. Then why the EU have to help the US. America's strategy is stiff poor. We will become live in the communism soon.
: Next QE - the last bubble market - MMT - [Hyper or Controlled] Inflation - New System
* [Hyper] Inflation = Bond collapse
* [Controlled] Inflation = Continuous debt repayment
* Caution
QE is useful for banks and for low bond interest rates. But banks are o.k now and the interest rate is low now. So why is QE useful? Even though Trump wants a QE, it may can't prevent the market crash down. Now, the EU is saying about a QE. So you can check how it goes on.
Howard Marks says QE is such a placebo effect. Here is his memo about the next QE and about the next crisis. He is asking a serious question about this market and the future.
Latest memo from Howard Marks: This Time It's Different
Related :
SURVIVAL : 2019, Hippie Village