From a fundamental perspective, the economy is weakening which will create more downward pressure for stocks.
-Fed Taper Talk Continues -As We Predicted the “Transitory Inflation” Narrative is Changing -Narrative Had to Change; Producer Price Index Measure of Inflation Hits New Record High, Evidence of Inflation Everywhere Worldwide -Even Fed Loyalists Are Questioning the Fed -The Real Economy is Contracting -The Real Estate Market Is Beginning the Collapse -Stocks Look Suspect
Stocks rallied last week although, as I noted last week, technically speaking, stocks look weak.
-Attention to alleged Fed Insider Trading Heats Up -Four Threats -Will Evergrande be the Lehman Moment of 2021? -Poor September Jobs Report -Is the Crypto Czar Coming? -Crude Hits 7-Year High -Inflation and the Economy
Stocks, by my analysis, weakened even more last week. The first four trading days of the week were negative followed by a nice rally on Friday. Despite the rally, technicals in the stock market are breaking down by my measure.
According to the Investment Company Institute, at the close of the first quarter of 2021, the total assets held in retirement accounts in the United States was $35.4 trillion. Given that the ‘official’ national debt is approaching $30 trillion, if politicians could get their hands on the retirement account assets, the nation’s fiscal problems could be solved, if only temporarily.
Perspective: “Economic Consequences” book prediction Deflationary development– Evergrande Inflationary development – Near record CPI increase YOY Deflationary development – Bubbles continue to extend Inflationary development – World governments react to rising food prices predictably, the end result will fail
Worldwide debt is at record levels. When the currency creation stops or slows, I expect to see an ugly deflationary environment emerge as the debt is purged from the system.