YET ANOTHER PERSON WHO AGREES WITH ME ...: The stock market is set up for a major crash, thanks to the Federal Reserves massive easing program, says hedge fund manager Mark Spitznagel, founder of Universal Investments. Equities could plummet 40 percent, he tells CNBC. That would put the Standard & Poors 500 Index at 1,051 compared with Thursday mornings reading of 1,751. Our economic structure is the problem, Spitznagel says. Its a period weve been in a number of other times, he said. I would argue all the major tops weve seen in the market over the last 100 years look very much like it does today. This is very much a Fed-induced distortion. The central bank has pushed short-term interest rates down to almost zero and is keeping long-term rates low with its quantitative easing. The central bank is buying $85 billion of Treasurys and mortgage-backed securities per month. Assets have been bid up to an unsustainable level based entirely on an artificial economic illusion that is a zero interest rate environment, Spitznagel explains. The hardest thing to do right now, what makes you look like a fool, is to sit and earn zero. I would argue its the best investment to sit earning zero, he advises. The stock rout could happen in the next year, he says. If history is any guide, we should expect it sooner than later. . . . But history need not be a good guide because were in this monetary experiment, the likes of which weve never seen. --------------------------------- I HAVE BEEN TELLING YOU ALL FOR MANY MONTHS THE END GAME WILL NOT BE PRETTY. WE ARE HEADED TO DEFLATION/DEPRESSION ... DJIA UNDER 7,000, MAYBE LESS ... GOLD UNDER $400, PROBABLY LESS. IF YOU WANT TO KNOW HOW SERIOUS IT IS JUST LOOK AT HOW MUCH MONEY THE GOVERNMENT/FED IS PUTTING IN NOW TO HOLD “INFLATION” AT 1%. ABSENT OF THAT MONEY WE WOULD ALREADY BE IN DEFLATION AND HEADING INTO DEPRESSION.
Posted on: Sat, 26 Oct 2013 06:18:46 +0000
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