You will need to watch the video to see the analysis of what I see as a maximum low of 10630 or so, on MNQZ22 next week, but I want to address what we could see in the future, which could negatively impact European and eventually US and world markets. Anyone who has witnessed the meteoric rise of equity prices since the printing presses went wild at the U.S. Treasury by Federal Reserve mandate since April 2021 knows that this liquidity needs to be withdrawn.
There seems only one problem with that, and that is the fact that the printing and spending have still not stopped. But as the late pitchman, Billy Mays, would say, “But WAIT, THERE’S MORE!”
What that “more” follows below:
The origin of Nord 1 and Nord 2 sabotage is quite easily questioned and could lead to an all-out war between the USA and Russia. Remember that Joe Biden himself asserted that he would end Nord 1 and 2 if Russia reinvaded Ukraine. You can read more about the controversy in this article. I know I disturb my neo-con friends, but to take on the world’s pre-eminent nuclear power on a fraudulent claim of Russian sabotage under such circumstances is insane. In my opinion, we need to legally remove our own fascist oligarchy at the ballot box before attempting to overthrow the fascist regime in Russia or aid the fascist regime in Ukraine. We were responsible for overthrowing duly elected leadership in Ukraine in 2014 replacing it with fascists. If you don’t believe that watch Ukraine On Fire and take notes. The United States made Putin wealthy by suspending energy exploration and transport in this country. We have little right to take sides since our nation meddled in the outcome of free elections.
Regardless of opinion, the US has built up 100,000 troops on the Ukraine border in the last few months, and both sides are on a war footing. If that doesn’t have institutional investors, hedge funds, and investors in Europe and the USA on edge, nothing will.
Debt problems in the UK and Europe are spiraling out of control. Credit Suisse seems headed for its Lehman Brothers moment, and that could spill back into Germany and the rest of Europe.
The dearth of energy for the UK, Germany, and other European countries following what I consider to be psychotic energy policies to reduce carbon dioxide are going to make it hard to determine if they should use electric power at all or pay the mortgage. Some energy prices have risen tenfold over the last year. There are likely to be food shortages in Europe also as production is being cut back because of the new regulations on nitrogen fertilizer use. The mortgage defaults in the UK from rising rates will also increase unrest and homeless perhaps at the same time.
The potential for a Federal Reserve pivot on interest rates and widespread adoption of central bank reserve currencies (CBDC) in the USA and the EU will also threaten who controls cash. These currencies are 100% programmable and trackable, so no financial privacy can exist. I am assuming that the emergency meeting of Federal Reserve Governing Board tomorrow is not just going to be a meeting regarding the election of new governors. It could also be about either raising the Fed Funds rate dramatically, or perhaps engaging in a reduction of rates to prevent further damage to equity, bond, and futures markets. If rates are cut, in the short run it might be great for equities, but it does not resolve issues of sound money and the establishment of stable risk-free rates of return. Without that, it is impossible to estimate what the true enterprise value of a private or publicly-traded company is. The casino mentality of the last 22 to 25 years will be cemented into place. The other is a hard pill to swallow, but would likely get us closer to really establishing true risk-free rates of return. It would also destroy rightfully zombie companies that could not function without nearly “free” money.
I am personally hoping that we take the “pain” approach and eliminate the excess liquidity that exists in the economy and to reground this nation to reasonable properties of finance.
For the time being, however, until this largely government-created insanity is resolved, I think the near-term direction of NQ in aggregate is down, and perhaps decidedly so. Let’s hope we can liberate the asylum for leadership by the inmates themselves. Only time will tell.
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