The money supply will continue to grow
You can influence the risk, but not the return
The past few days and weeks have not been particularly pleasing for many investors. Worldwide, the stock markets fell dramatically within a very short time. And still no one knows how long the pandemic will last and how badly the global economy will suffer in the end. This brings the crash prophets to the scene, because they have always known that sooner or later the bull market would end in a big bang.
Abrupt end of the bull market
The fact is that the stock markets have experienced a very long upswing since March 2009. Anyone who got involved at that time earned up to 270 percent before the crash and before taxes and costs. At 131 months, the past bull market was the longest in the history of the stock market. However, the corona crash abruptly ended this upswing.
The two economists and bestselling authors Marc Friedrich and Matthias Weik predict in their book “The greatest crash of all time” 2019 a system breakdown. By 2023 at the latest, they said, the euro was history and the real estate market would collapse. Also Max Otte prophesied doom in his book “World System Crash”. But there has never been a lack of voices warning of a major slump in stock markets.
In fact, there were arguments in favor of an impending crash. Because the high flight on the stock exchanges could not go on forever, especially since the economy began to slow down. In the wake of the bull market that has been going on since the spring of 2009, stocks have become extremely expensive and risky bonds from less solid borrowers have risen to ever higher levels outside of the stock markets.
Is Big Inflation Coming Now?
Matthias Weik recently told the editorial team at wallstreet: online: “Now the time has come. The central bank presses are running as if there is no tomorrow. Inflation – persistent price increases combined with a decline in purchasing power and devaluation of money – is therefore all imminent.” The central banks are partly to blame for this. Because with her loose Monetary policy have prevented the global economy from falling in recent years. However, their flood of liquidity has not boosted corporate investment to the hoped-for extent. These often used the cheap money to buy back shares and thus also ensured rising prices.
The states are now following suit in the current crisis. Germany alone releases several hundred billion in guarantees, loans, grants and other financial aid, other nations take similar measures. Unlike during the financial crisis, production capacities are not underutilized, but are partially shut down. So there is more money in circulation but not necessarily more goods. This could cause inflationary tendencies.
Don’t let it unsettle you
Crash prophets will inevitably be right on the streets at some point. Stock market cycles are part of it and sooner or later there will be a “stock crash” even after the most recent crashes. These market developments largely depend on coincidences and imponderables, such as the corona virus.
“Anyone who has followed a well-considered investment strategy should not be surprised by such a decline,” says Niels Nauhauser from the Baden-Wrttemberg consumer center. The current stock market phase is extreme, but not unique, wrote the Stiftung Warentest. “What the investor can influence is not the return, but only the risk,” says Nauhauser. If you look at the developments of the past 100 years, one thing is certain: after every crisis, the markets recovered and set new records.
Felix Spies / editorship Forex-news.com.net
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