3/30/2015 – A big up day with the Dow Jones 263 points (+1.49%) and the Nasdaq up 56 points (+1.15%).
If you have followed my blog for over a year, you very well know that my economic forecast has been dead on. Thus far. Over a year ago I have clearly outlined that the US Economy will start rolling over in Q3-4 of 2014, accelerating its downfall thereafter.
Now, Business Insider is seeing the same thing Something weird is going on in the US economy, and it’s not good This brings out 3 incredibly important questions.
- Why is the US Economy rolling over? – To put it bluntly, because the US Economy today is one massive Ponzi scheme. And yes, you can blame the FED for this one. The improvements we have seen over the last few years have very little to do with real economic growth and have everything to do with massive amounts of liquidity pumped into the system. In the form of QE and zero interest rates. Liquidity that went straight into stock buybacks and propping up speculative asset prices. We all know how that ends.
- Many experts expect a Q2-4 GDP bounce, will we get one? – NO. As was suggested above, there is nothing to drive this economy forward. Now that the QE is gone and the FED is considering raising interest rates, where will surge come from? It WON’T. Unless the FED re-introduces QE, we won’t see any further improvements. On the contrary, expect most economic drivers to decelerate even further in 2015.
- How will this impact the stock market? – As is evident from the chart below, the stock market has disconnected from any sort of fundamental reality in early 2014. Now, there are only two possible outcomes. Either earnings and economic data surges higher or the stock market breaks down. Based on the analysis above, the latter is a much more likely outcome.
This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning when the bear market of 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.
(***Please Note: A bear market might have started already, I am simply not disclosing this information. Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. March 30th, 2015 InvestWithAlex.com
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