May 5, 2016 This is a difficult year to plan anything with a stock market bubble and no obvious economic shock in sight. But the pressure is building with the BRICS slowly entering bankruptcy. Puerto Rico is also entering bankruptcy and the wealthy Chinese are putting all the money they can into offshore accounts. Gold is now rising as an indication of the fear of either an economic collapse or of accelerating inflation. The glut of oil continues to increase as most major economies struggle to grow. It is similar to the situation President Herbert Hoover faced, but he and FDR did not have all the economic tools we have today. But the tools don’t seem to work as the debt bubble expands and interest rates approach zero and turn negative even in the best of economies. That is another reason people are starting to buy gold again as hyperinflation becomes a possible world problem. That happens to countries that get too debt ridden and the whole world is falling deep into debt.

China has been a bellwether in recent years with their protectionist policies and high tariffs on competitive imports.  But that could come to a quick end next year.  Hillary says she will follow Obama’s economic and world leadership with a continuation of his same disastrous policies if she is elected.  Now we know the Obama-Hillary administration has been the most incompetent administration in American history.  And Hilary has been the Secretary of State primarily responsible for the disintegration of democracy and the growth of terrorism in Moslem ruled areas while she and Obama refused to even say the words Islamic terrorism.

 

Trump is competent and he says he will threaten to retaliate dollar for dollar for the tariffs and restrictions that China, Mexico and others put on American products.  He claims he is so intelligent and persuasive that he will convince all our trade partners to reduce their tariffs as a condition for no American tariffs on their products.  But he makes an exception for American companies that sold out to greed and moved out of America for cheaper labor.  Those company products will have tariffs until those companies move back to America.   Even if it proves impossible it is the thought that counts and the lesson the deserters will learn.

 

The point is that the whole coming year is impossible to predict due to the uncertain American Fall election.  Mid-June+ 2016 probably will not be the final market bottom now unless Trump starts beating Hillary in all the election polls and then wins the election.   So at this time we cannot hazard to say that the next bottom will be the bottom for this economic cycle.  In fact it could get so bad that a major recession starts and takes a full year to turn around.  However, as long as we can, we will try to estimate when the next tops and bottoms occur and the risks involved.  Giving the Obama-Hillary team the boot would be the best thing that Americans can do for the entire world at this point.