December 15, 2018 – Most importantly, Happy Holidays and Happy New Year to everyone. Safe travels if you are out and about this Season.
Just a quick note on the markets as the year winds down.
The stock market has forecast that the economy (I guess we can use GDP as its measurement) will remain strong in the 4th Quarter of 2018 and 1st Quarter of 2019. However, the 2nd Quarter of 2019 should show a significant slowdown. The 1st Quarter might reflect a bit of that slowdown. The Bear Market is at its midpoint. That doesn’t mean it will decline an amount equal to what it has already declined. Just that it has traced out half the waves of a full decline. 2019 should be interesting. Interesting is always good:)
The US Dollar is near a top and should decline for awhile. The Euro will do the opposite, of course.
Gold has rallied nicely and should continue to $1300-$1350. Then decline back to around $1200. This action likely will take up most of next year. A final push to the $1450 area will follow. But, that now appears to be a ways off. Silver has been sluggish. But, it will follow gold when the time comes.
Lastly, a note on the crash of the cryptocurrencies. A few of us started watching Bitcoin back when it was under $10. In fact, when it was a below a $1 I was aware of it. But, it took an increase in activity to keep it on the radar. As with any bubble (and this is the greatest bubble in the history of the world….bigger than the South Sea Bubble…..Bitcoin went up over 633,000% (!) from bottom tick to top tick), the decline is usually around 80% to 99%+.
From its peak of $19,800-$20,250, Bitcoin is down 81%. I can only imagine how many late investors are holding major losses. Bitcoin is possibly the only significant survivor of this crash. Most of the others will go to $0.01 and, thus, down over 99%. So, far Ethereum (-93%), Bitcoin Cash (-98%), Litecoin (-94%), and several other are down well over 90%. These will likely go down near 100% as they have no value at all. Just people gambling on air.
The bottom target range for Bitcoin is $150 to $1900. Yes, that is a bit wide, but for an item that has traded from $0.003 to $20,000, such is life. The point is a decline of at least 50% from current levels is projected. I might, only might, start looking at it as a buy between $500 and $800. But, I doubt I will ever buy into again. Afterall, it is just fake air with no value….no worth….nothing to actually own. I would rather go back to trading Pork Belly futures:)
To give you some perspective of the insanity of a top….at the top of the Dot.Com Bubble companies (and the Smart Money) were trying to convince that the public that it was no longer important for a company to be profitable. Companies just needed to generate revenues. Never need to make a profit. Of course, the masses buy into any lie at a bubble top. The Smart Money sells everything to them and the crash occurs that takes many companies down 100%. And the public loses big time.
Well in this great bubble of blockchain being the cure for everything….crypocurrencies being better than fiat currencies and gold and so on….companies issuing new stock in ICOs (Initial Coin Offerings)….the ultimate sign of insanity was the ICO offering for a company named ‘Telegram.’ Forbes magazine reported the company “has no viable business model, as it makes no money – on purpose.’ The principal of Telegram said “Making profits will never be an end-goal for Telegram.” On May 4th, the ‘company’ raised $1.7 Billion, a record for ICOs.
So, there’s your ultimate insane top. ‘People’ (I think morons and idiots would be better terms) invested $1.7 Billion in a ‘company’ with no plan at all, no plan to ever make money, etc. They simply flushed $1.7 Billion down the toilet. 7 months later the company has not even issued its tokens. The question should be why would so many people put their money into a sure loss situation? At the top of a bubble the masses see no way at all that they can lose on an investment. Thankfully, it is always that way. The Smart Money needs someone to sell this junk to at the top.
Socionomics explains the above…..I am finally at the point where I will begin writing the final paper of my real estate career. It will deal with Socionomics and real estate. I have spent the past 3 years thinking about the topic and gathering books and articles. Now to start writing it. I expect it might take a year or more. We shall see…
That is all for now.
Remember, Spend Forward, Use Forward!