Monday, July 1, 2013

The Central Bank Bubble! When will it CRASH? End of Year 2013

I think market crash is inevitable because it always happen BUT when next? Asia Bubble, .com Bubble, Great Big Credit Bubble and now what do you think will be the name for the next Bubble? See the image below:

This image is obtained from Google Image search and the graph originates from Kit Juckes. Basically, his analysis is quite interesting. With is graphical approach, we can see how deep "sh*t" the world economy are in now.

From the graph, you see Fed Fund at low, GDP will grow high. BUT when Fed funds get higher, GDP will drop and stock market will follow to drop. Fed Funds increases based on the interest rate. So, in order for the Fed Funds to increase, The FED has to increase interest rates. In this case, it will hurt GDP and of course, the global stock market as well.

The FED is keeping the interest rates near to zero since 2008. For now, any negative blow to our economy will be deadly and so far we never know how to save the economy without the help of reducing interest rates (it is near to zero, how to reduce?)

Personally, I saw a BIG Crash coming. The market looks optimistic now, if it continues to be so optimistic for the months to come, I believe The FED will announce to increase interest rate.

What Warren Buffett says?
The world's Greatest Investor - Warren Buffett Guarantee New Crash and New Recession (Source).

I think it is coming very soon. Prepare your cash and it is almost time for us to get rich in this BIG CRASH.

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