The Silicon Valley Bank situation along with Signature Bank defaulting on their investments has produced a negative psychology for our markets. Money is a game of psychology and when investment emotion changes significantly we have a DOWNTURN in the global markets. I now sense that this downturn is here. We may have some relief for a few days (or weeks) as our Central Bank is manipulating psychology with their policies. But this is unlikely to change the longer-term TREND.
Money is a confidence game and when confidence declines major change is around the corner. My view is that we could have a short-term relief for a few weeks as investors get manipulated by FED and TREASURY policies. Easing the interest rate trend and pumping in new cash might work for a few weeks. Longer term, however, the TREND is seriously DOWN. Psychology is changing and investors are seeking new safe havens.
My sense is that gold and silver will benefit from this psychology change. Gold and Silver are physical commodities which exist and which also have a positive history in times of major change. Gold is currently going UP as is silver. My sense is that these precious metals will benefit for the remainder of 2023. We could witness a doubling in value by the end of 2023 for these metals. Watch these metals going forward!
The American dollar is in serious trouble as the BRICS are forming a new currency regime for 50% of the global market. Saudi Arabia is also allowing their oil to be priced in alternative currencies. The dollar peg is no longer mandated. Prices of oil may benefit from this change. Our American dollar index should decline for the remainder of 2023. The index is currently around 104.00. I suspect that this index will decline below 100 in the near future. All this change is favorable for gold and silver.
Real estate will benefit (temporarily) as interest rates may trend down going forward. The huge bubble in real estate, however, will still produce declining prices over time. In my area of Arizona, prices are declining even as listings are increasing. List prices have not moved down much as of yet, but I suspect that this will change in the near future. Mortgage affordability is still a major problem for many buyers. Will the FED now pivot and start to lower interest rates?
This is unlikely as INFLATION is a major problem. If gas prices increase going forward, this will show that INFLATION is a big problem. Our FED can manipulate these interest rates and produce temporary change which is positive but they can not change the overall investor PSYCHOLOGY. The psychology is changing and I sense that the END of a CYCLE is now here. By August we could be in a serious economic depression. Watch what the FED does going forward. March 22 is a key date!
The BIG PICTURE reveals that we are at the END of a major business cycle. We are also at the END of this Keynesian economic system which has existed since 1934. Debt has grown to unsustainable levels and this will not go away. You can witness the numbers here: www.usdebtclock.org. As I write the money supply is going down and this will lead to a depression by August if this trend continues. The END of Keynesian Economics is here IMO.
It may be wise to buy some gold coins and silver coins if you have excess savings. A supply of paper bills may also be wise. I am not giving investment advise (professionally) but I am suggesting that this alternative is usually positive given prior financial history. I follow this advice for my investments. This concept called VALUE is key to financial success. VALUE can decline in seconds if you have digital (virtual) assets. Today, most investments are held in digital currencies. Digital money can vanish with the stroke of a computer key. Digital money is VIRTUAL meaning that it is non-physical. It can vanish in seconds.
We need a NEW MODEL for our global commerce. This will come as the current model ends. My sense is that KEYNESIAN economics is essentially over. DEBT can not continue (forever) as it slows the economy when the numbers get excessive. Today, our DEBT situation is beyond salvation. We need a NEW MODEL for all global commerce. In the meantime, it may be wise to get out of the SYSTEM and into a commodity which has no SYSTEM control of its existence. Gold and Silver are these commodities.
Think for yourself and do your own research. What is right for me may be wrong for you. Each person's situation is unique. I am: Donald B. Swenson, Economist/Philosopher, donaldswenson.blogspot.com.
http://kingdomecon.wordpress.com
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