Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
China's Grand Plan to Take Over the World - 19th Nov 19
Interest Rates Heading Zero or Negative to Prop Up Debt Bubble - 19th Nov 19
Plethora of Potential Financial Crisis Triggers - 19th Nov 19
Trade News Still Relevant? - 19th Nov 19
Comments on Catena Media Q3 Report 2019 - 19th Nov 19
Venezuela’s Hyperinflation Drags On For A Near Record—36 Months - 18th Nov 19
Intellectual Property as the New Guild System - 18th Nov 19
Gold Mining Stocks Q3’ 2019 Fundamentals - 18th Nov 19
The Best Way To Play The Coming Gold Boom - 18th Nov 19
What ECB’s Tiering Means for Gold - 17th Nov 19
DOJ Asked to Examine New Systemic Risk in Gold & Silver Markets - 17th Nov 19
Dow Jones Stock Market Cycle Update and are we there yet? - 17th Nov 19
When the Crude Oil Price Collapses Below $40 What Happens? PART III - 17th Nov 19
If History Repeats, Gold is Headed to $8,000 - 17th Nov 19
All You Need To Know About Cryptocurrency - 17th Nov 19
What happens To The Global Economy If Oil Collapses Below $40 – Part II - 15th Nov 19
America’s Exceptionalism’s Non-intervention Slide to Conquest, Empire - and Socialism - 15th Nov 19
Five Gold Charts to Contemplate as We Prepare for the New Year - 15th Nov 19
Best Gaming CPU Nov 2019 - Budget, Mid and High End PC System Processors - 15th Nov 19
Lend Money Without A Credit Check — Is That Possible? - 15th Nov 19
Gold and Silver Capitulation Time - 14th Nov 19
The Case for a Silver Price Rally - 14th Nov 19
What Happens To The Global Economy If the Oil Price Collapses Below $40 - 14th Nov 19
7 days of Free FX + Crypto Forecasts -- Join in - 14th Nov 19
How to Use Price Cycles and Profit as a Swing Trader – SPX, Bonds, Gold, Nat Gas - 13th Nov 19
Morrisons Throwing Thousands of Bonus More Points at Big Spend Shoppers - JACKPOT! - 13th Nov 19
What to Do NOW in Case of a Future Banking System Breakdown - 13th Nov 19
Why China is likely to remain the ‘world’s factory’ for some time to come - 13th Nov 19
Gold Price Breaks Down, Waving Good-bye to the 2019 Rally - 12th Nov 19
Fed Can't See the Bubbles Through the Lather - 12th Nov 19
Double 11 Record Sales Signal Strength of Chinese Consumption - 12th Nov 19
Welcome to the Zombie-land Of Oil, Gold and Stocks Investing – Part II - 12th Nov 19
Gold Retest Coming - 12th Nov 19
New Evidence Futures Markets Are Built for Manipulation - 12th Nov 19
Next 5 Year Future Proof Gaming PC Build Spec November 2019 - Ryzen 9 3900x, RTX 2080Ti... - 12th Nov 19

Market Oracle FREE Newsletter

$4 Billion Golden Oppoerunity

Stock Market Forecast to Head Back Down to 2009 Lows

Stock-Markets / Stock Markets 2010 Jul 05, 2010 - 08:09 AM GMT

By: Martin_D_Weiss

Stock-Markets

Best Financial Markets Analysis ArticleI trust you’ve had a great Independence Day!

In four days, we will have published 1,776 editions of Money and Markets — one for every year between the birth of Christ and the birth of our nation.


But right now, if you feel like you’ve awakened in a strange new world, you’re not alone.

The investment environment has changed over the past few years — and the change has been radical.

Today, we are in the midst of a massive global revolution — the East, reaping the benefits of its industry and thrift; the West, paying the price for its sloth and extravagance.

Former “Third World” countries are resource-rich, virtually debt-free and have vast cash reserves. And the so-called “advanced” nations — in Europe and the United States — are nearly bankrupt, drowning in debt; most available cash, borrowed or printed.

As happens every half-millennium or so, the economic sun is setting in the West and is rising in the East.

The New Reality

Moral lessons aside, the reality is that a revolution of this magnitude — the historic changing of the planet’s leadership — can be expected to impact the value of every conceivable store of wealth. And it’s only natural that these changes be as extreme as the events that drive them.

We’ve seen similar extremes in stocks as well:

Thirty-four months ago — in October of 2007 — the Dow was over 14,093. Just a year and a half later — by March of last year — it had plunged to 6,627, a 53% decline.

Then, in March of last year, the Dow changed course, ultimately rising to 11,019, posting a 66% gain in 13 months … only to change course AGAIN in April of this year, sinking to the 9,700 zone in just the last three months.

Moreover, judging from the rapidly deteriorating economic news, this is likely to be just the beginning of a far deeper decline — one that could take the Dow down all the way back to last year’s lows.

If that forecast proves to be correct, the Dow will have swung a total of more than 15,000 points since October of 2007.

And as you might expect, similar scenarios have been playing out in every other major investment market on the planet:

  • The U.S. dollar crashed to all-time lows in 2008. Then, the European debt crisis took center stage. And for the past seven months or so, investors have been buying dollars and dragging the euro through the dirt. In the next phase, if those same investors realize that America’s sovereign debt crisis dwarfs that in Europe — and that the U.S. Fed has been counterfeiting dollars like there’s no tomorrow — it could be the dollar’s turn at the whipping post.
  • The U.S. bond market is a huge bubble. Market interest rates — not just those dictated by the Fed but also those set in the bond market by real investors — have cratered as bond prices soared. But with our deficits bulging and our economy sinking, global investors may soon decide to flee from dollar-denominated bonds, much as they fled from European bonds this spring. If so, our bond bubble could also burst.

Why the Old Rules No Longer Apply

In this kind of environment, the old rules of investing are out the door.

Most buy-and-hold investors are subjected to the roller coaster rides of their lives; and, in the end, go nowhere (if they’re among the lucky ones who can avoid big losses.)

Look. After all the sleepless nights — and fanfare — of the past three years, the Dow is STILL down 32% from its October, 2007 highs.

After nearly three years of nail-biting volatility, most buy-and-hold investors have managed to wind up with far less money than they started with.

Worse: There’s no end in sight. Nothing on the horizon that even suggests a return to normalcy at any point in the foreseeable future.

Given these new facts of life, most inexperienced investors are frozen — unable to budge. And they often lose a lot of money.

This investment news is brought to you by Money and Markets. Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules