Saturday, August 22, 2015

Global Debt Crisis

Hi Folks,

I normally stick to technical analysis because that is what I know best. However, with my recent posts regarding the impending massive selloff, I figured I would impose my fundamental "opinion" here as well.

In some of my posts I questioned what the catalyst for the selloff would be? Terrorism, interest rates, student loan crisis etc. However any of these are just a guess to what tips the market on it's side. The root problem is the same as it was in 2007 only now much...much bigger.

Debt is what caused the massive selloff from 2007 to 2009. One would think that after that crisis, globally we would have learned a thing or two and made some changes. The sad fact is that in the last 7 years, global debt has increased by an incredible and unsustainable 40%. Our own federal reserve has increased the debt on it's balance sheet 800% since the market bottom in 2009. These levels are clearly unsustainable and ultimately this nation and other nations will have to make some hard choices to get back on track.

Couple the massive debt collapse with the shift from the "open outcry" trading model to a world where almost every market is 99% electronic trading and you set the stage for an 80% market correction.

This is what will be talked about in the media after the dust settles and the crisis is near it's end. Why isn't this a major focus for the media right now? Hopefully you are all taking steps to protect yourself from what is about to unfold.

Thanks and Good Trading,


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