S&P 500 - The Great Inflation Reset 2+ YEAR POSITION
Hi good afternoon traders!
I have a theory as to why we are overdue for a huge correction on US indices. THE GREAT INFLATION RESET
we are at 7% 30 fixed mortgage rates in the US which has slowed down the housing markets tremendously in major areas of the USA. FED has almost 0% chance of pivot and we might see these 30 yr rates climb over 10% for an unbearable housing market. Stocks will get hit the hardest for this great reset.
Current economic climate is very grim for Europe, and central banks have their hands full with their fight on inflation. The geopolitical situation in Ukraine & Russia is heating up even more as Russia is set to annex 4 regions of Ukraine today. UK just had a "Lehman Brothers" moment if they hadn't stepped into the GILT markets. GBP has been plunging, almost reaching parity with USD just as the EUR has. BOE launched QE with CPI at 10% and you can literally see dollar strength crushing the other fiat currencies. "Dollar Milkshake Theory" seems appropriate for what can possibly happen in the next year or so.
Link Below for refresher on this theory:
www.goingdeepwithaar...odcast/brent-johnson
Germany has reached double digit CPI
ND1 ND2 (Nord Stream Pipelines) was recently bombed or sabotaged, deteriorating positive sentiment even further. Turkey tried to fight off its collapse but the dollar is just ravaging everything in its path. Now they are approaching Greece with threats of war. I would not be surprised if DXY hits 150
Hurricane IAN has just crushed parts of Florida, and BOJ is doing everything they can to avoid total bond market collapse. Sentiment worldwide is absolutely terrible. Although we had a V-shaped recovery on US Indices, most central banks will be launching QT so they will be pulling liquidity from the markets. Textbook definition of RISK OFF would be now. Not to mention we are also still in a crypto bear market, and USOIL reached highs recently that did not help inflation issues either. Everything is bearish except for the dollar itself.
When the Federal Reserves and FDR took the dollar off the gold standard in the 1900's it was checkmate. Instead of making the whole world rely on gold it is now the dollar that reigns king as the world reserve currency it was actually a very positive move for the USD
Black swans, potential psy ops for mid terms, is what my intuition tells me. We also have China/Taiwan tension heating up right around the corner. Global supply chain constraints really helped kick off the bear market. In order for sentiment to pick up we would need a miracle.
" Panic led to lockdowns, lockdowns led to fiscal stimulus, stimulus led to inflation, inflation led to monetary tightening, tightening leads to recession. The panic wasn't free and the bill is coming due"
- Quote found on FINTWITTER
GET READY FOR GENERATIONAL BOTTOM
I have a theory as to why we are overdue for a huge correction on US indices. THE GREAT INFLATION RESET
we are at 7% 30 fixed mortgage rates in the US which has slowed down the housing markets tremendously in major areas of the USA. FED has almost 0% chance of pivot and we might see these 30 yr rates climb over 10% for an unbearable housing market. Stocks will get hit the hardest for this great reset.
Current economic climate is very grim for Europe, and central banks have their hands full with their fight on inflation. The geopolitical situation in Ukraine & Russia is heating up even more as Russia is set to annex 4 regions of Ukraine today. UK just had a "Lehman Brothers" moment if they hadn't stepped into the GILT markets. GBP has been plunging, almost reaching parity with USD just as the EUR has. BOE launched QE with CPI at 10% and you can literally see dollar strength crushing the other fiat currencies. "Dollar Milkshake Theory" seems appropriate for what can possibly happen in the next year or so.
Link Below for refresher on this theory:
www.goingdeepwithaar...odcast/brent-johnson
Germany has reached double digit CPI
ND1 ND2 (Nord Stream Pipelines) was recently bombed or sabotaged, deteriorating positive sentiment even further. Turkey tried to fight off its collapse but the dollar is just ravaging everything in its path. Now they are approaching Greece with threats of war. I would not be surprised if DXY hits 150
Hurricane IAN has just crushed parts of Florida, and BOJ is doing everything they can to avoid total bond market collapse. Sentiment worldwide is absolutely terrible. Although we had a V-shaped recovery on US Indices, most central banks will be launching QT so they will be pulling liquidity from the markets. Textbook definition of RISK OFF would be now. Not to mention we are also still in a crypto bear market, and USOIL reached highs recently that did not help inflation issues either. Everything is bearish except for the dollar itself.
When the Federal Reserves and FDR took the dollar off the gold standard in the 1900's it was checkmate. Instead of making the whole world rely on gold it is now the dollar that reigns king as the world reserve currency it was actually a very positive move for the USD
Black swans, potential psy ops for mid terms, is what my intuition tells me. We also have China/Taiwan tension heating up right around the corner. Global supply chain constraints really helped kick off the bear market. In order for sentiment to pick up we would need a miracle.
" Panic led to lockdowns, lockdowns led to fiscal stimulus, stimulus led to inflation, inflation led to monetary tightening, tightening leads to recession. The panic wasn't free and the bill is coming due"
- Quote found on FINTWITTER
GET READY FOR GENERATIONAL BOTTOM