This should come as no surprise to my readers. I tend to agree with Marc Faber’s point of view on this. The question is, when will the bubble pop?

Fortunately or unfortunately, depending on your point of view, the bubble will not pop in a dramatic fashion some bears expect or anticipate. While the fundamental bearish stance is right on the money, based on my mathematical and timing work, the markets will not collapse. The market will decline to the tune of 40% over the next 3 years, but it will be a gradual (although at times volatile) process.

Now, it baffles my mind why most people don’t see this massive financial asset bubble. I am not entirely certain if it has anything to do with the financial media propaganda machine or simple human psychology. Perhaps a combination of both. Either way, if you don’t see the financial bubble in question I suggest you open your eyes and educate yourself. It will save you a lot of money.

Yet, do not wait too long. The bear market is about to start. Get yourself ready.

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Marc Faber Confirms, We Are In A Gigantic Financial Asset Bubble

December 16, 2013

Warning: The Markets Can Easily Be Predicted

Bloomberg Writes: The Enduring Mystery of Financial Markets

Unfortunately, decades after the three economists had their groundbreaking insights, the crucial question remains unanswered: Can policymakers know with any certainty when markets are dangerously out of line, and is there anything they can do about it?

Economists can’t be expected to predict the future. But they should be able to identify threatening trends and to better understand the conditions that can turn a change in prices into a financial tsunami.

Read The Rest Of The Article Here

Once again, I do not understand why everyone claims that it is so hard to do. The Economy and its bubbles are very easy to see and predict. For example, you could have looked at 2002-2007 period and have easily determined or came to a conclusion that there was a huge real estate and mortgage finance bubble developing. When it would collapse, it would take down the entire economy, multiple financial institutions and our financial markets.

No crazy or complicated economic models needed. This is fairly basic and common sense stuff. Same thing applies to today’s environment. While the majority of the economist do not see any present issue either in the economy or the financial markets, they are there. The majority of economic growth and market recovery over the last couple of years has been driven by an insane amount of credit pumped into our economy by the Fed through a multitude of channels.

Now the economy and the financial markets will have to pay for such a mismanagement by dropping over the next few years (as my timing work indicates). As the Fed perpetuates this cycle of boom and bust by dumping a lot of credit into the economy I remain puzzled why it is so hard to see by most economist and others participating in the financial markets. If you take conflict of interest out of the picture, this becomes very basic.

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Warning: The Markets Can Easily Be Predicted

November 18, 2013

Larry Summers Predicts Doom And Gloom. I Agree.

BusinessWeek Writes: Larry Summers Has a Wintry Outlook on the Economy

Larry Summers, the man who was almost chairman of the Federal Reserve, is surprisingly gloomy about U.S. growth prospects. In a recent speech at the International Monetary Fund, he suggested the U.S. might be stuck in “secular stagnation”—a slump that is not a product of the business cycle but a more-or-less permanent condition.

Summers’s conclusion is deeply pessimistic: If he’s right, the economy is incapable of producing full employment without financial bubbles or massive stimulus, both of which tend to end badly. The collapse of the debt-fueled housing bubble led to the financial crisis of 2007-09, and some policymakers worry that the Fed’s easy-money policy is setting the economy up for another fall. Witness the Dow Jones industrial average at 16,000.

“Conventional macroeconomic thinking leaves us in a very serious problem,” Summers said in his speech. “The underlying problem may be there forever.” He added: “We may well need in the years ahead to think about how to manage an economy where the zero nominal interest rate is a chronic and systemic inhibitor of economic activity, holding our economies back below their potential.”

Read The Rest Of The Article Here

Mr. Summers is right on the money. Exactly as I have argued before, we now know the true reason behind his candidacy withdrawal from FED Chairmanship role. Unlike Janet Yellen who is a cheerleading fool who believes she can control the markets, Mr. Summers has a clear view of what’s coming.

He doesn’t want to be at the helm of the next substantial economic and financial market downshift that will start in 2014. Further, he is very well aware that the FED is the primary source of the problem. Instead of creating economic stability and an environment that is conducive to productive capital allocation, the FED’s have blown bubble after bubble in order to give the appearance of economic stability. Yet, any such economic stability is a mirage at best. In reality it is a ticking time bomb.

If we can learn anything from history, every financial bubble eventually bursts. Some spectacularly so and some with the whimper. As my timing work illustrates, the bear market will start in early 2014 and complete itself in 2017. I expect to see some fireworks as the market deflates back to where it should be.

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