This market doesnt add up
Markets continue to rally in the US like everything is fine, and the ASX is being drawn up in the excitement. Baldinvestor wonders how all this will end. The FED balance sheet has increased by 2/3 in just two months in their desperate attempts to hold up asset prices.
This action is just duplicating what Japan has done. Once the money printing stops all the fake, phoney businesses being propped up will still go broke. Perhaps they are planning to buy all the assets. By doing this they will have total control over the public. They can pay out a universal basic income to everyone and the public will be thankful that they have been looked after.
A few stories emerged this week urging caution in this rally. The value investor, GMO has indicated it is starting to short the US market quite aggressively. They have stated that liquidity can make the market function short term, but it does not fix the economy. Another analyst mentions that this rally is mirroring the rally after the first collapse in the Great Depression and will be followed by a larger crash.
In any case the NASDAQ has currently set up a huge double top. Logic says that it cannot break into new highs in the current environment. The probability would favour that this would be the best opportunity to remove a large portion of risk from your portfolio.
Shares were already very expensive in the US - now with earnings absolutely devastated PE ratios must be insane. All it takes is awareness to creep in to the mainstream. 2020-05-27