This article was contributed by James Davis of Future Money Trends.
This might be the MOST IMPORTANT letter I’ve published since this pandemic GOT STARTED.
In essence, the global markets are now CLEARLY DIVIDED between FOUR DISTINCT sectors:
- FAAMG stocks: These are the MEGA-GIANTS and they’re so much more valuable than the other companies that they’re not even in the SAME UNIVERSE. For example, Apple Inc. is already worth over $2T, with a P/E ratio of 37, com is worth $1.7T, and Microsoft is worth $1.7T as well, with a P/E ratio of 37, and Facebook and Google are also trading at these valuations.
These companies are FAR FROM CHEAP but they’re certainly not in a bubble when considering the alternatives.
- Robinhood Platform Stocks: This is where a RAGING BUBBLE is going on, which will END BADLY in very SHORT ORDER.
The darlings of this trading platform don’t have COMMON SENSE and they hold stocks for days, perhaps weeks, just enough so that someone else will pay more for them, but the game of MUSICAL CHAIRS will end and it won’t be ANY FUN.
I expect to see companies that go under, stocks that crash by 30%-50%, and plenty of pain since this bubble depends on credit and stimulus and it does not represent OR MIRROR REALITY.
- General Equities: Many companies are trading at FAIR VALUATIONS and can be looked at in the context of long-term investments.
We’ve published THREE WATCH LISTS and there are a select few that trade below their LIMIT ORDERS right now.
The fourth economy is the REAL ECONOMY; here, credit and leverage do not play a POSITIVE ROLE. Here, honest and hard-working people deal with what’s available and get NO AID and no blanketed bailouts.
These people, the small business owners, and Main Street enterprises that are the LIFEBLOOD of the economy since they deal in REALITY, not in credit, are FALLING BEHIND.
The system is not directly rigged AGAINST THEM, but it ends up being to their detriment at the end of the day.
This STRUCTURAL PROBLEM is displayed in the following chart, which shows that credit, translated into HIGH ASSET PRICES, is rising faster than GDP does, so much so that we are in uncharted waters on this front.
It introduces many challenges to the life of the average person, who isn’t IMMEDIATELY DRAWN into the world of credit since they are attracted to what they can access, which is the REAL ECONOMY.
The few who are either from the right background or understood the system early on go into the world of credit, but the majority GET SUCKED INTO a frozen capsule of time, in which real wages do nothing for THREE DECADES.
Misuse of credit has destroyed the real economy and has created many terrifying and unintended consequences.
The people that benefit from this are not the majority, so frustration BOILS INSIDE until it finds an outlet.
We have two economies, but the DISCONNECTION IS TEMPORARY.
When gravity takes hold of markets, it’s the Robinhood darlings that go down first.
At that point, don’t be surprised to see A WAVE OF DEFAULTS.
You mispelled the Mega giants! It is FMAGA and it is intentional just like FANGs was intentional!
Growing up in a single parent household and growing up in a household of illegal aliens are the highest contributing factors to racial inequity. These are not nationalist white supremist related issues. White children from single parent households are in similar socio-economic circumstances. What would be construed as nationalist white supremist related issues, would be deciding that Maduro should be replaced because he is unacceptable, or the Evos should be replaced because he is unacceptable, or that the JCPOA should be abandoned after signing even though Iran has adhered to it in total prior to the U.S. abandonmemt of it, or that everything is Russia’s fault, and if anything has been hacked, it must have been by Russians, are all racist policies promoted by Jack Dorsey who shut my account down twice for supporting Maduro and the JCPOA and the Iranian government and Putin in their right to govern their countries without U.S. destruction of their countries and or credibility if the charges are based on fabrications or are an excuse for the U.S. to install a puppet regime that the citizens of those nations object to because it would result in civil unrest and could result in international security threats.
Jack Dorsey is a hypocrite!
Only those deranged would believe that anything market related has any forward value.
THe net effect of COVID-19 on the economies – Regional, National and Global – which form the economic ‘ecosystem’ is nothing short of catastrophic at present and in a few short months will readily and apparently be seen in it’s fullest form, namely apocalyptic. Much as a shark MUST swim in order to sustain the flow of Oxygen across it’s gills or die, economies of virtually every scale must transact a monotonically increasing number of goods and services else starve.
Let’s enumerate the current headwinds briefly shall we?
1) China – and indeed the entire far East – has suffered near total crop losses due to incessant rains, most recently exacerbated by the landfall of Typhoon(s) Vongfong and Nuri. The second of these as it moved onto mainland China seems to have been the catalyst for increasing rains upstream of Three Gorges dam peaking at a total inflow of 78,000 cubic meters per second…well beyond the dam’s outflow capacity of 60,000 cubic meters per second. China is no longer reporting on reservoir levels.
2) Recent ‘Derecho’ winds in the midwest have laid waste to roughly 40% of this years Corn crop; 110+ mph winds ALSO annihilated farm and storage silos throughout the region from Eastern Nebraska to Indiana.
3) The ongoing debasement of the US Dollar at the hands of the Federal Reserve (effectively economic homicide) will shortly begin to have perceptible effects on the National economy. Whether these effects take the form of a rapid, deep deflationary interval or proceed directly in a Weimar-style hyperinflation remains to be seen. Analyses I’ve read lately provide plausible support to both scenarios.
3) The Psychlogical effect of COVID-19 cannot be overstated. Recently, ZH posted an article claiming that 60 Million less highway miles were being driven as a result of ‘home work’s and this is scant compared to the Airline Industry whose traffic has plummeted to levels unseen since the advent of air travel. The follow-on effects of just THAT segment being impacted to that degree are already being felt through the service industries that support air travel (multitudinous) but also in the allocations of raw petroleum at the refinery level; why distill JP-4/8 when there’s no demand for it? Indeed, for the first time in decades we’re seeing a minor positive effect at the consumer level; the price of Diesel fuel has been LOWER than that of Gasoline continuously for 4 months now…something which (historically) it always was before the Oil Companies realized they could soak the Trucking Industry by allocating higher and higher per centages of crude to gasoline refining…a notoriously energy intensive process called “Cracking”.
Point in fact Folks…we have went WAY past the oft spoken of ‘Tipping Point’ and are entering directly into systemic collapse.
The few examples listed above are FAR from a comprehensive listing thereof, really just highlights…the list goes on and on.
Please stay the HELL away from ANYONE trying to sell you anything based on a paper certificate if ANY sort…in a few short months none of that will be worth shit…paper.
It is not effective or just to have criminals, in charge of criminals, in charge of criminals, in charge of criminals, which is what we currently have. Follow the money. Who is funding BLM? Conservative capitalist institutions like the Ford Foundation, JPM/Chase, Nike, and sores of others. Sorry but all involved reeek like hell! Why aren’t the financiers being charged with being state sponsors of terrorism?! Still waiting for the BIG LIES to end and guilty psychopaths to be charged for 9/11 and covid plandemic scamdemic!
Since the corporate financiers of BLM, including JPM with $23 trillion AUM, and since they are the ones that write the legislation that congress signs into law, if JPM wanted police shootings to end, they would habe lobbied for it, and it would have been carved in stone as law. This proves that what JPM and the other corporate financiers wanted was chaos, for the FIRE economy, Financials, Insurance Real Estate, giving them yet another excuse for treasury looting!
Blacks are being used by them in a Charles Manson fantasy!
If Republicans were serious about law and order they would have prosecuted the true perpetrators of 9/11 staged attacks, $21 trillion in Pentagon accounting errors, and covid economy plandemic scamdemic for looting and extrajudicial murder!
A Nation Of Heroes, talk about propaganda! More like a nation of Big Liars, Murders, Thieves, Fraudsters, Junk Scientists, Snake Oil Salesmen, Lunatics, Propagandists, Gas-Lighters, Psychopaths, Psy-Oppers, Mentally Incompetent Fools, and their Victims which does also include American citizens. If it makes you sick, that was their plan! Munchausen Syndrome and Superman Complex! What lousy excuses for human beings!