Wednesday, March 18, 2015

Reasons # 2: Why Bear Market

When you offer multiple reasons for anything like a divorce, the interrelationship of the aspect clouds the point whether each position is separate or already included under intent. This is why I say in my unpublished work that all things are related. So, when I mention earnings, does that imply valuation? Does currency come into play because the company is international? Yes, it does and more. Therefore, dear reader, be understanding regarding this aspect.
To review I already stated that the rising dollar will be a direct cause for a stock market correction. What I failed to address(blog space is limited)was the aspect that the Federal Reserve is more concerned about trade agreements among nations to conduct a transaction without dollars. In addition, countries like China and Russia are selling treasuries. One important reason for this is our national debt. It would be even higher figure, but many items are off the books. This will lower the value of the dollar and thus, cause holders of treasuries to lose money. Therefore, the Fed welcomes a higher dollar and like savers in this country, the collateral damage of inflation to emerging markets, is the price. The Fed understands the importance of maintaining the dollar as the reserve currency. If by their reckless policies, the US were to lose this privilege, inflation would destroy our economy. They would never take the blame, but our citizens would still pay the price.
This leads to the current discussion, will the Fed raise interest rates. Any raise in rates will bolster the dollar even more. This would export inflation to cheaper currencies. The Fed does not want to cause complaints from the global community. What they are trying to do is turn the clock back to the early 1980s. This would help exports of the global community while killing what is left with our manufacturing. If someone gains, someone is losing. This policy implies a service economy for the US and the higher paying manufacturing jobs will go global. We just past the Ides of March, but Shakespeare had other pearls of wisdom like the tangle web of deception which is the mainstay of politicians and central bankers. The Fed will stall as long as they can because they know one more aspect that they can't control, demographics. This is working against them and in a way, this aspect effects everything. If you offer a great product at a low price, but no one comes to your store, guess what. You don't sell! When the Fed does raise its rates, probably in July or September, it will only be a quarter point which is in itself a joke. It will make no difference. Then, they will play a new game to stall some more.
will be the location and truer indication of where rates will be going and when. Keep your eye on the ten year note. If bonds yields fall, so will the market. Then, confidence goes and the Fed will attempt to regain our consciousness with some new game that promises prosperity, but is in fact another tangled web of deception. All the aspects result in the same conclusion: End the Fed!