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The Economy is Booming, but Troubling Signs Loom

Guest Piece by Lior Gantz of FutureMoneyTrends

In the past few days, markets have been SPIRALING upwards. In fact, the average person feels GREAT about the economy, about his workplace, about his portfolio and about American dominance.

This happens to coincide with the most overbought stock market conditions in history.

As you know, as long as central banks keep lowering interest rates, there’s no reason to assume that stocks will crash in a major way or go sideways. Investors have ZERO alternatives, compared with the power of American businesses that are growing at a pace of 6%-8% a year, and pay dividends on top of it.

In the short term, though, Wall Street is SELLING and it will continue taking profits, so we might need to wait 3-4 more weeks for sentiment to turn bearish, before getting aggressive again.

Just look at the bullishness of Main Street America:

Courtesy: Zerohedge.com

Fundamentally, America’s economy is truly BOOMING. Many millions, though, still have NO CHANCE of joining the prosperous landscape, but advancements have been noticeable in the past three years.

For example, the bottom 50% of wage-earners have seen a 47% increase in compensation. That’s more than what the top 1% have enjoyed during the Trump era.

Many families have risen back to middle class status and many others no longer need food stamps.

Of the 60,000 factories that were either closed or outsourced in the past 20-30 years, 12,000 new ones are operating on U.S. soil and many more are planned or are getting built.

The USMCA, which replaced NAFTA (that cost America 25% of its manufacturing labor force), is forecasted to create 100K new high-paying jobs.

And, so, the problem is CLEAR AS DAY: Trump’s tax cuts, deregulation, trade negotiation, new legislation and aggressive initiatives are working for the private sector and unleashing the free enterprise system, but the DEFICITS are just STUPIDLY increasing.

You can see this disaster by checking out the debt/GDP ratio:

Courtesy: Zerohedge.com

In his State of the Union Address, Trump specifically mentioned that Washington will not default on its Social Security promises. What this means is that the government will have to RESORT to other measures to fund its ATOMIC national debt, going forward.

So, while 50 million Americans watched Trump’s speech and his approval ratings hit all-time highs, Wall Street is cashing out for a bit.

The big players did the same thing in February ‘17, January ‘18 and February ‘19. Computer Traded Algorithms and large funds move the markets; if you’re bullish, you are playing with fire.

Another sign that the mom-and-pop investors have gone BERSERK is this:

Courtesy: Zerohedge.com

Many “EXPERTS” have gone bankrupt or have caused other investors to LOSE FORTUNES, by pounding the table that TSLA should be shorted.

Jim Rogers offered up the best advice on shorting manias: markets stay irrational more than you can stay solvent. In other words, he has warned investors that fundamentals don’t matter in times of manias.

This isn’t the only sign of trouble. On Tuesday, I issued a trading warning on gold and it crashed just minutes later.

I still analyze gold’s sentiment as TOO-BULLISH:

Courtesy: Zerohedge.com

The S&P 500 companies are currently reporting earnings and seven out of ten are BEATING expectations. It seems like the economy is better than most believe it is, which is the reason that companies that focus on consumers are BREAKING RECORDS.

We’ve capitalized on this and will continue to cover this topic.

In his SOTU address, Trump also highlighted healthcare and the need to have a healthy country, full of educated citizens.

That’s a huge opportunity – millennials are the most health-driven generation in America’s history!

 

Today’s news moves at a faster pace than ever. Whatfinger.com is my go-to source for keeping up with all the latest events in real time.

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7 thoughts on “The Economy is Booming, but Troubling Signs Loom

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  2. Jimmy MacAfee - February 6, 2020

    Americans seem to be learning: spend less than you make; buy what you need with cash and not borrowed money, and save for a rainy day – all lessons people from other generations mostly took for granted.

    In a lot of rural areas, in some areas of the country, people can buy land for $2000-4000 an acre for plots over 10 acres. So if you put down $60,000 for 20 acres instead of buying that fancy new truck, you have something that is not easy to flip, but it also doesn’t lose it’s value like a vehicle does. May take years to save that much money, but if you calculate how much it costs to purchase cigarettes, beer and lottery every year, it isn’t as hard as It seems. Helps if you have a good job and a Proverbs 31 wife, too. Or if your Proverbs 31 wife has a good job.

    But if you want to remain poor, remain ignorant, take long expensive vacations, smoke, drink, rent, spend money at restaurants on credit cards that you don’t pay off immediately, buy new vehicles frequently…recipes for failure.

    Or you could pinch pennies (see above) and buy high-dividend but low risk stocks, or stocks that split frequently, or stocks that offer new technologies – but if you don’t pay attention, you won’t know what to buy. Stocks go up; stocks go down: if you think you’re smarter than institutional investors who use tech for investment, you may be in for some hard lessons. If you always look at how things COULD happen, you’ll miss opportunities; if you always bank on what SHOULD happen, you’ll lose your shirt – (imagine Jerold Nadler without a shirt! Pretty picture, eh?)

    Irrational exuberance is nearly always fatal.

    1. Gregg - February 6, 2020

      Agree 100% on your thought of people wasting money.

      Fifteen years ago, I worked with college educated millennials for several years in NORVA and we all made good money but many were always bitching about not making enough money. One young bright couple together bought a 400 K house, spent $10 a day on Starbucks, $10 a day on a dog walker, lunch and dinner at restaurants most days etc., and didn’t contribute to available matching government investment programs. We weren’t close friends but one time I spent about fifteen minutes explaining how much these unnecessary expenses actually cost them every year, and they were shocked. Like most young people however, they didn’t follow my advice, but couldn’t understand how I could get by on “only” a 65 K salary in the DC area, since they were struggling at a combined over 100K salary.

      The real irony: They both worked in my agency’s finance department.

  3. Justme Andmeonly - February 6, 2020

    I really think our Fed is in cahoots with Europe and we are still enriching them. How do think they are funding their negative interest rates? (Hint: buying Treasuries which are paying higher than their negative rates) I would do it too.

  4. CharleyC - February 6, 2020

    There was a time in October, 1929 that the same sort of high prevailed. Then, one day, it went bust. Diversify. Be aware. Be prepared.

  5. Jimmy MacAfee - February 7, 2020

    There’s another “boom” coming:
    Stzrok and Page Iranian connection: early upbringing; Valerie Jarrett, 1st 5 years.
    Vindman bros Ukraine connection (why would they oppose Trump, when he provided lethal aid to their homeland? When Obama provided blankets, Trump provided anti-tank missiles.

    So you have an advisor to the President (Jarrett) and two FBI officials compromised by Iran; you have two NSC officials compromised by Commies in Ukraine (previous Ukraine administration.) The overthrow of the former regime (think: mass murder, snipers on rooftops, 100 or more dead) and corruption – link to Intel and NOCs.

    To be revealed soon? Already happening! BOOOM!

    1. Jimmy MacAfee - February 7, 2020

      Was Piglosi promised Presidency? Impeachment wasn’t the only method.

      Think tanks and missiles and bad food – all warned of ahead of time. All failed. Still danger, but Piglosi addled to point of wetting herself. Ol’ Fossy Jaw will chew herself into nonexistence.

  6. Jimmy MacAfee - February 7, 2020

    Wondering about China’s economy: how are they going to sell organs with coronavirus? Not a booming industry anymore!

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