The Greek default proves that all this endless quantitative easing idiocy couldn’t live up to the promises. It has proved unable to create sustainable long-term recoveries in highly indebted developed countries with poor demographic trends.
The Greek parliament caved into totally repulsive demands, as I said on Monday that it would. They did it out of stark fear of the chaos a Grexit would bring before free market forces resolved their trade and budget imbalances.
I don’t believe they did the right thing. From the looks of the discontent on the ground, many Greeks don’t either. Be that as it may, this can has been kicked just a little further down the road, yet again.
But the whole mess made investors nervous. As did the recent collapse of China’s stock market which just added to the growing concerns.
Investors are right to worry. I’ve been saying for years that the greatest trigger would be the bursting of the massive, unprecedented China bubble.
How can it not?!
Its stock market soared 159% in less than a year. It gained 30% in just two months!
Then its stocks took a nose dive, losing 35% in less than 30 days.
Understand that if China’s stock market had lost just 20%, it would have meant nothing. But, as I’ve always said, a drop of 30% to 40% in short order is a clear sign of a first wave down in a major bust. That’s why I’m always telling you to rather be safe than sorry. If you don’t follow a reliable, proven investment strategy – like any of our premium research services, from Boom & Bust, Cycle 9 Alert, Max Profit Alert, BioTech Intel Trader, Triple Play Strategy and Dent Digest Trader – waiting passively for that extra 1% or even 5% is like playing Russian Roulette.
As far as I’m concerned, that recent 35% crash is very likely a sign that the stock bubble in China has peaked. As such, this is the greatest sign – by far – that the next great global crash is imminent.
That’s why I sent our paid subscribers an update earlier, explaining the six signs that the end is near. Of course, I can’t share all of those details in this forum. That would be unfair to the people who pay for my in-depth research. But recent events are so important, you need to hear the warning.
So here are the six signs that trouble is just around the corner.
Sign #2: U.S. stocks could be the last major market to make a new high. Then it will roll over. I’d want to see at least a 30% correction to confirm a long-term top… you don’t want to wait until then.
Sign #3: Oil prices have rallied to $64, as I said they would (my range was a recovery to between $62 and $74). Since then, prices collapsed back to $51. I expect oil to fall again. This would mean death for the fracking industry, which is a $1 trillion investment with $600 billion of junk bonds and leveraged loans. That’s much larger than Greece and when defaults begin to hit, we’ll feel the pain right here at home.
Sign #4 – One Most Investors Won’t See Coming: Emerging markets have led the global slowdown. They didn’t make new highs after the 2008 crash, and now it looks like they’re about to break to the downside out of a 4 month trading range, just as did gold and oil (as I forecast).
Sign #5: The real importance of the Greece catastrophe is that it has set off the alarms in a world perceived to be risk-free thanks to governments stimulating and guaranteeing their economies. But long-term rates for sovereign and Treasury bonds are rising despite these efforts. That means those efforts have begun to stop working!
Specifically, rising long-term, risk-free rates hurt stock valuations. It hits real estate even harder thanks to higher mortgage costs.
Sign #6: If gold bounces over the next several months, it’s game over. In the last crisis, gold rose at first… anticipating higher money printing ahead. But then it collapsed in the second half of 2008 as the crisis fostered deflation before central banks stepped in wielding their printing presses.
Right now, gold is moving towards my downside targets before a minor bounce ahead. It’s currently sitting at $1,144 near its lows over the last year.
All the signs point to the end of this global bubble, although this top is likely to be complex with so many factors hitting in the same time frame.
It’s time to prepare.
To help you, I’m halving the price of a subscription to Boom & Bust for you. This is our premium research letter where Rodney Johnson and I bring you the most relevant economic information affecting the world – and how to prepare for and profit from it! For just $49 for one year – what’s that… like less than 10 cents a day? – me and my team will keep you updated as this crisis unfolds. More importantly, not only will you know what’s coming before most other people, but you’ll know how best to face it.
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