TREND ALERT: Avoid Media False Flags. These Warning Signs Are Flashing Market Crash
KINGSTON, NY, 26 SEPTEMBER 2018—Business news reporting has dumbed down to juvenile, non-journalistic stupidity. Each day they give one simplistic reason for markets moving up or down.
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TREND ALERT: Avoid Media False Flags. These Warning Signs Are Flashing Market Crash
TREND ALERT®
Avoid Media False Flags. These Warning Signs Are Flashing Market Crash
KINGSTON, NY, 26 SEPTEMBER 2018—Business news reporting has dumbed down to juvenile, non-journalistic stupidity. Each day they give one simplistic reason for markets moving up or down.
For most of the year it's been trade war and tariff fears. Earlier it was North Korea, and just this past Monday they blamed the equity market decline over concerns Deputy Attorney General Rod Rosenstein will be fired by President Donald Trump.
Who would follow these simplistic explanations in making financial investment decisions while discounting core market fundamentals, such as earnings, P/E ratios, Gross Domestic Product forecasts, real estate trends, retail sales, industrial production, etc.?
But while the media obsessed with false flags, we have repeatedly warned of alarming developments that could trigger sustained downward trending in equities should they continue to intensify: Spiking oil prices and rising U.S. interest rates.
On the oil front, Brent Crude hit $82 a barrel on Tuesday, its highest mark since 2014.
OIL RISES AS ECONOMIES WEAKEN
While the cost of oil, which is dollar denominated, is climbing, many developed and Emerging Market currencies and economies are declining. Thus, as oil prices spike, a perfect storm is forming because the higher oil prices rise and the lower their currencies fall, the cost burden adds more downward pressure to their economies.
For example, in India, which imports 80 percent of its energy, the combination of the rupee hitting new lows against the dollar and oil prices rising has resulted in the cost of crude oil rising 47 percent over last year.
To varying degrees, the India scenario is playing out across the globe, and as witnessed by President Trump's address to the United Nations on Tuesday, it will intensify. Promising that "Additional sanctions will resume November 5th, and more will follow" on Iran, the world's fifth largest oil producer, we forecast these measures will drive oil prices yet higher.
Clearly, spiking oil prices, coupled with a hawkish Fed interest rate policy – a rate hike expected today, another in December and three or more next year – will hit economies hard in both EM and developed nations.
TREND FORECAST: The prospects for an oil shock are escalating as tensions rise in the Middle East, especially in Syria after 15 people were killed last week when a Russian reconnaissance plane they were on was mistakenly shot down by Syrian air defenses attempting to repel Israeli jets on a bombing raid.
And in Yemen, the war launched by Saudi Arabia and its oil-producing allies in March 2015, has no end in sight. Considering Yemen's strategic location and the nations at war, oil supply and delivery is extremely vulnerable.
Considering these and other Middle East destabilizing factors, should oil prices move beyond $100 per barrel or more by year end, EM and developed nations' economies will sink into recession and stagnation.
And since the last five market crashes were preceded by sharply rising oil prices, we forecast a global market meltdown should oil prices climb above $100 a barrel and interest rates continue to rise.
If Trump release strategic reserves before mid terms could be a game changer. Saw article on Bloomberg this morning.
I'll eat my hat if Oil is at 100 a barrel by years end. Trump condemned OPEC for keeping prices higher while America protects their interests. Today oil dropped and tonight oil futures are up a little. I would be surprised if oil rose to 80 a barrel by end of year. As for interest rates, rates are still very low when you look at where interest rates were over the last fifty years. Back in the 80s rates were at 11% for a long time. Six month CDs were paying 10% then. Those were the good ole days.
I offer that oil prices have to reach $100 per barrel and remain at or above that price for at least several weeks. If the $100-per-barrel price shock is not protracted, then it is unlikely to cause a full-blown economic crisis.
Rising oil prices is already having a huge impact on our New Zealand economy but the MST is not going there just yet...
Meant to say main stream media,I only do diesel at approx, say $8 us gal, petrol say $11 us gal, this is to give you jokers a rough idea where we are at even before the shit hits the fan. NZ dollars. We are at $1:50 to US dollar.
Well obviously the article assumes the price remains over $100.- for a while. But it is true, a serious outbreak in Syria between Russia-Israel-Syria-Iran-Turkey-The US-the crazy Islamists (who believe guns are made for shooting and knifes are made for chopping off heads and who believe any war is a good war because that is clearly what god wants), yes any serious fighting between any of the above could easily push oil over $100 a barrel! and the world into a financial depression. Hold onto your Goooooold!!!!