FINANCIAL APOCALYPSE 2019-2020 - Analytics & Forecasts - 13 September 2019


Waiting
for a Financial End of the World

The
world has frozen in anticipation of the global financial

crisis. Some analysts predict its onset in the
coming months, others give a delay until the end of 2020 – the beginning of 2021. But both draw quite

apocalyptic pictures.
The collapse in oil, copper and iron ore
prices, falling stocks and currencies, layoffs and bankruptcies.

One
of the most famous economists, Nouriel Roubini, believes that the crisis will begin very soon, at the end of 2019-2020. Recall that his
previous forecast
was
completely accurate. And now,
in
an article in Project Syndicate, Roubini cites a number of signs of impending disaster.

Among them, along with the trade wars that the US
is waging with China, the EU and other countries, Roubini calls the increase in interest rates by the US Federal Reserve and the recession
caused by the cessation of fiscal stimulus.

For
these reasons, the growth rate of the American economy may slow down to 1%, as a result of which the country will face the problem of job
shortages and
unemployment.
One should not forget that the
foreign
exchange reserves of most countries are denominated in US dollars, so the crisis in the US economy is very likely to cause a collapse around
the world.

But
Is the Situation So Terrible Indeed?

First,
it is reassuring
that
crises are temporary and cyclical. If we turn to the theory of medium-term economic cycles, we will see that since the beginning of the Great
Depression of 1929 they occur approximately once every 7-12 years.

The
first crisis in the 21st century was the bursting bubble of dotcoms

(primarily
American Internet companies) in 2000. Since 1994, the

NASDAQ
index had
grown
by more than 500%, and on March 10, 2000, in just one day, it fell more than one and a half times.

Then
the fall continued until 2003.

The
next crisis, 2008, was caused by a bursting bubble of mortgage lending in the United States. And now we are gradually approaching a new
boiling point, which is based on the overheating of the American economy, intensified by the global instability.
Last
summer, the
S&P500
index, whose basket includes 500 US companies with the largest capitalization, reached its maximum, approaching the mark of 3.000.
And
in January 2010 it was exactly 3 times smaller: 1.000.
That
is, for
almost
10 years we have seen continuous growth in the US economy. ACCA chief economist Michael Taylor estimates this is the longest growth period in
150 years.
And
if we focus on the theory of the cyclical nature of crises, it would be time for the next of them to begin.

And
What about Washington?

“Naturally,
both Fed leaders and President Donald Trump are aware of this,” says John Gordon, lead analyst at NordFX brokerage. – And here we must
remember that the next year, 2020, is the year of the next presidential election in the United States. If Mr. Trump wants to lead the country
for the second time (and, apparently, he wants to), he just cannot allow the collapse of the American economy, falling incomes and rising
unemployment.
Voters will never forgive him for
this.
Therefore, we can observe
lately how Mr. Trump puts pressure on the
leadership of the Federal Reserve System, insisting on softening financial policy.

And it seems that the
Federal Reserve may follow the president’s lead.

So,
after the Fed raised its base interest rate from 2.25% to 2.5% in December last year, three more, if not four, increases were expected until
mid-2020. However, the opposite happened: from July 31, 2019. the rate has again become 2.25%.

Fed
Chairman
Jerome
Powell, speaking at the end of August at the annual economic symposium in Jackson Hole (USA), said that the Federal Reserve is ready to
provide more incentives in case of a slowdown in economic growth.

Many
other central banks, including the main regulator of Europe, the ECB, are also focused on easing policies. The leadership of China declares
support for its economy as well. So there is hope that by joint efforts it will be possible, if not to prevent the crisis, then at least to push it
back to 2021.

Yen,
Bitcoin, Gold: An Equilateral Triangle

By
accumulating resources, the largest US corporations are already redefining the priority of paying dividends to their shareholders,
which makes us think again: what if the crisis breaks out in the coming months?

What should one do? What assets to invest in, so
as not to be left with nothing?

Currencies
like the yen could be
considered
as a refuge. But they nevertheless strongly depend on the oil market and on the yield of US government bonds. For some time, the Japanese yen
will be able to stay afloat. But, if the crisis is serious and long enough, its fate may also be unenviable.

What
other options are there? Crypto enthusiasts, like Fundstrat analyst Tom Lee or Morgan Creek co-founder Anthony Pompliano, offer to invest
in bitcoin, convincing investors that this virtual coin has already become a safe asset that can hedge currency risks. However, for many
experts, this way of saving
money
raises fair doubts. “Answer the question on your own,” John Gordon of

NordFX
offers, “how reliable is Bitcoin if only from 08 to 15 August this digital currency lost more than 20% of its value, collapsing from $12,000 to
$9,500? And this happened without any crises!

With
such frenzied volatility, Bitcoin is not a safe haven, but an ideal tool for high-risk speculation. Well and a refuge as well, but not from
fluctuations in traditional financial markets, but from … its younger colleagues in the digital market, altcoins, the interest in which
is constantly falling. Of course, it is possible that at the time of the crisis, the price of the main cryptocurrency will rapidly go up. But it
can fly down no less swiftly. Probabilities are 50 to 50. We are looking for a really reliable asset.

And
this, according to many experts, of course, is gold.

Over the past
20 years, this noble metal has risen in price from $275 per ounce in September 2000 to $1,550 in September 2019, bringing investors a profit of
460%.

According
to analyst and producer of The Gold Forecast daily newsletter Harry Wagner, the last major bullish wave began at the end of 2015, after a
correction of up to $1040, and suggests that gold can re-test the record highs of 2011, reaching in 2020 prices of $2070-2085 dollars per
ounce.

Over
the past year alone, since September 2018, the yellow metal has risen in price by 30%. According to the World Gold Council (WGC), gold demand
in the first six months of 2019 reached a three-year high (2181 tons), mainly due to record purchases of the precious metal by Central banks,
which are transferring their dollar reserves to more reliable assets, in their opinion.

“Of
course, the numbers above look very attractive,” says the NordFX analyst. –

And
the actions of the Central Banks can be considered as an example. However, it must be borne in mind that if, in

anticipation
of a recession, the demand and, consequently, the price of this metal are rising, as the economy stabilizes, they may fall.

Moreover,
the fall may be quite serious.
And
the investor must have patience for the moment when the price moves up again to come: the process can take 5, 10 or more years. In this case, when
we talk about hedging financial risks during global crises, gold can indeed be chosen as a preferred asset. As for the short- and medium-term
speculations with it, this is a completely different issue, requiring a completely different approach, which must be discussed
separately.
However, in this case, gold
can become a source of
serious
profit as well.”


https://nordfx.com/

Notice:
These materials should not be deemed a recommendation for investment or guidance for working on financial markets: they are for
informative purposes only. Trading on financial markets is risky and can lead to a loss of money deposited.



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FINANCIAL APOCALYPSE 2019-2020 - Analytics & Forecasts - 13 September 2019
FINANCIAL APOCALYPSE 2019-2020 - Analytics & Forecasts - 13 September 2019
FINANCIAL APOCALYPSE 2019-2020 - Analytics & Forecasts - 13 September 2019
FINANCIAL APOCALYPSE 2019-2020 - Analytics & Forecasts - 13 September 2019
FINANCIAL APOCALYPSE 2019-2020 - Analytics & Forecasts - 13 September 2019

FINANCIAL APOCALYPSE 2019-2020 - Analytics & Forecasts - 13 September 2019

FINANCIAL APOCALYPSE 2019-2020 - Analytics & Forecasts - 13 September 2019