The Financial Crisis has taught investors nothing. They shied away from risk for about a few months before jumping right back into it. Sure, maybe subprime mortgages weren’t the top pick but they just moved on. Today, the most overt concern is the debt connected to retail, the derivatives mess underneath it, and how purposely ignoring this will have devastating consequences. Well, this time is different, right?
Every empire falls. It does this largely because of its own failures. It crumbles from within as more corruption and greed consume it in haste. More people are jumping onto the pile, pushing their savings into the stock market. Many inexperienced traders are rushing to buy leveraged positions in technology stocks which have completely taken over. The question is, if the Fed never takes away the punch bowl, will the party ever stop?
The Federal Reserve has gone down a path it cannot turn back from. It has gone towards the inevitable failure of the currency. There is no way that printing excessive quantities of fiat currency can ever work out well. They know this but that’s what is being done anyway. There are no historical examples of successful currency debasement and yet they’re all doing it. Sadly, people are enjoying this policy and believe this is somehow positive. How foolish.
There has never been a more questionable period. During the Financial Crisis, it was well understood the direction things were headed. Today however, there is such polarization. No information is secure. Nothing seems to make sense. Looking at the traditional indicators at face value has proven to be a big misstep for many. Instead, piecing together this complex puzzle has unveiled a mystery.
The global economy is continuing on its downward trend. The financial system teeters on the edge, while maintaining the facade that somehow we have nothing to worry about. We have the occasional report of positivity from paid actors and institutions. But overall, the data is not reasonable. It’s not ok to have millions of people subsist only by help of government. Something is broken and those in charge are not there to fix it, in fact they’re only making it worse.
Sound investment principles. Everyone should be taught the basics as they’re growing up. We won’t learn in school. Much of which is in my books, but I’ve come to realize, the public doesn’t read and sadly, many can’t read. Hopefully those of us who are aware of financial education will pass it on to who we can. The more people who are awake to it, the better we’ll be.
There is no economic recovery and the mainstream has been trying to avoid the obvious but occasionally the information comes out. It’s so prevalent today that it’s impossible not to see it. If you’re looking at a secluded area, or a certain set of statistics generally known, you would conclude that as expected, a v-shape recovery is on now. But it’s quite the opposite. And sadly, people are standing right in the middle of it and can’t recognize how bad this really is.
The sheer amount of panic that investors have felt in a matter of a few days has been real. Even the new mascot for day traders, the guy from Barstool Sports, literally said he’s overleveraged and lost millions in an instant. When people take on more risk than they even realize, eventually they face the consequences. The stock market doesn’t need to have a major crash for people to lose their shirts. It happens when ignorance becomes a foundational principle.
The majority of people today have serious problems with their finances. They are running on fumes. Redlining it. Pushing it to the max. When a person gets a raise at work, they buy a new car, move into a new house, take expensive vacations, and generally spend more. They don’t have more left over at the end of the day, until their income goes far above the median level.
The stock market took another beating. And all the speculators have been wondering is, when will the Fed step in to help out? There can always be a down day, but 3 in a row? That’s impossible they say! At what point will people realize that this isn’t a game. You need to actually know what you’re doing. Amateurs are using options and the only thing they’ve been told is that stocks always go up so you really can’t lose. What a horrible lie they’ve been sold.
