PROFIT/PROTECT from Looming MEGA-RISKS…”Great Volatility is coming!”
DeepCaster
GoldSeek.com
Friday, 9 June 2017
Mega-Risks Loom in the Next very few months and most will be realized. But for Investors properly positioned, they Provide Very Substantial Profit and Wealth Protection Opportunities. First let’s examine the Risks, then the Profit Opportunities.
MEGA-RISKS
China
Perhaps the Main One will be the slowdown in growth in China, the world’s second largest economy. This Slowdown will be Caused mainly by China’s serious drive to restrain unsustainable credit growth.
Indeed, credit outstanding (including to “Wealth Management” entities outside the formal banking system) is a Real Threat to China’s Economy and was recently estimated to be 260% of GDP. Indeed, China’s Credit has been rising twice as fast as China’s GDP. But China’s restraints on Credit Growth will lead to the slowing of China’s economy.
Consequences of China’s Slowing:
¾ Dramatically reduced demand for many commodities Worldwide
¾ Chinese GDP growth plunging by up to 50% by 2020
¾ Diminished liquidity in China and thus Worldwide
¾ A fall in Chinese Equities, the beginning of which is already evident in the Shanghai Exchange
¾ Greatly diminished Credit Availability
¾ And because China is the 2nd largest Economy, these Negatives will adversely affect other Economies and Markets
USA
Almost surely this coming Fall’s Budget Deal will require an increase in the Debt Ceiling. There will be several consequences of which the most important are:
¾ Weakening of the $US
¾ A great deal of Conflict and Consequent Uncertainly
¾ Strong leg up for Real Money, i.e., Gold and Silver (but only in certain Forms see Deepcaster’s recent Letter and Alerts), and Spike UP and then the beginning of the Great, probably multi-year, Bear Market for Key Sector Equities
¾ The beginning of a deeper and widely acknowledged U.S. Recession
¾ Consider the Real Numbers courtesy of shadowstats.com compared with the Bogus Official Ones (Note 1)
Internationally
An intensification of the Currency Wars among Central Banks, with one eventual Result being the $US loss of World Reserve Currency Status and either the Gold-backed Chinese Yuan or the IMF SDRs ascending to that Status.
Result: an even worse recession in the USA and China, and spreading Worldwide.
Political-especially in the USA, Eurozone and Mideast
Political Factors will continue to have an inordinate influence on the Markets going forward. Indeed, if the Deep State Neo-Con Globalist’s and Cultural Marxist’s Attempts (see Carrying Capacity Network’s February 2010 article re Cultural Marxism) to destroy the Trump Administration continue to gain momentum, The Great Crash we forecast to begin in September/October could start sooner than even we have forecast it to begin (see our most recent Alert for likely Triggers).
But it could also be delayed, but not avoided by a successful Repeal and Replace Healthcare Bill and/or Corporate Tax Cut which might still cause a significant Market Bounce lasting for days or a few weeks, if other Political Events do not continue to dominate.
Indeed, Equities Markets around the world have topped, or, in the case of the USA, are Topping, and the USA is almost done Topping!
Overview: the Markets have shot up since the U.S. Election (Dow has hit a record 21,000+) on the hope/sentiment that President Trump’s Optimistic speeches and Policies will usher in a New Era of a Booming Economy and Markets.
Unfortunately, as much as we would like to believe in that vision, the Economic and Geopolitical Realities/Headwinds which Trump inherited are simply too great for that hope to be entirely fulfilled, at least in the short-term.
Consider:
The $20 Trillion-plus U.S. Debt and $100 Trillion+ downstream Unfunded Liabilities are one problem which has not been dealt with! Indeed, those debts are unpayable absent currency devaluation. And China’s unpayable Debt to GDP is 260%! So China can not be the Savior of the International Economy. How are substantial Tax Cuts Possible without substantially raising the Debt Ceiling?
And we reiterate that, in addition, Due to the private for-profit U.S. Federal Reserve Bank’s low interest rate Policies, Many Companies and Countries are highly overleveraged (and Many Retirees devastated due to hyper-low rates on CDs etc). EXCESS DEBT IS THE GREAT TRAP and likely The Primary Cause (among several) of the expected Crash. (See our Buy Recommendation aimed at profiting from this.)
Moreover, until recently, the Markets have been pricing in Massive Trump Tax cuts. We expect there will be cuts, but not as substantial or as soon as the Markets expect, want, or are pricing in. And other Trump Initiatives are meeting strong resistance. And the RyanCare debacle has been disastrous. Therefore, Earnings Improvement (though Good for Q! 2017) Expectations will eventually be dashed. Result: More Impetus to the downside. See our most recent Alert for Timing.
Thus, The Fed will eventually have to print “Money from Helicopters” and that will be very inflationary.
Great Volatility is coming!
The Rest…HERE
