Disclaimer: The following is our opinion and is not financial advice.
It's been a few days since our last update. It's time for another one.
In our last update we communicated we thought the now the LONGEST BULL MARKET IN HISTORY!!!
https://www.yahoo.com/news/wall-street-marks-longest-ever-bull-market-210930113.html
Yaaay right? No. Not even close. What makes this SO WRONG is that this bull market has been one big fat LIE! Since 2009, the markets have been driven up almost exclusively by 1) global central banking stimulus that continues to this very day EVEN WHILE THE MARKET IS MAKING NEW HIGHS and 2) corporate stock buybacks via easy credit terms courtesy of your TBTF banks.
It really is that simple. It's a fraudulent market bubble created exclusively by central banks and TBTF banks.
And if you don't believe us, just look at the debt levels across the world. Many Western backed nations have accumulated exponential amounts of debt that is far, FAR, beyond anything that can ever be paid back.
We are headed down the abyss of global economic collapse because we have ALLOWED the above mentioned entities to create a stock market bubble larger than any that have ever come before it. There is more systemic risk in the markets today than at any point in history.
So has our outlook changed? Are we willing to concede that the market can go higher? ABSOLUTELY NOT!!!
In the last few weeks, we have witnessed cracks forming in the global economy and they are only getting WORSE.
Let's start with Turkey. If you've been following us for any amount of time, we've talked about Turkey extensively. We have watched as Turkey (or rather Erdogan) has pulled away from it's major sponsor (the USA) in favor of pursuing its own agenda... mainly to restore the Ottoman empire to it's former glory. Make no mistake. Erdogan is a fascist dictator who has modeled himself after none other than Hitler himself. We created this monster by providing him with material wealth, arms, and economic support. What the USA expected in exchange was the same it expects of all it's dictators - COMPLIANCE. Well that's not worked according to plan (where have we heard THAT before?). This was most notable when Erdogan crossed into Syria and started attacking the US backed Kurds in Syria - who happen to be the only reliable non-extremist ally for the US on the ground in Syria. Erdogan hates he Kurds like Hitler hated the Jews. This has proved to a a huge problem for the USA. As a result, they attempted to facilitate a coup a couple years ago but Erdoan was ready for it. He responded by imprisoning tens of thousands of people from the military, police, media, and universities. Anyone who stood against him was rounded up and jailed. There was very little mention of this in the MSM. The US Pastor now being held and is being used for justification of economic sanctions is accused of being one of the facilitators of the coup.
Make no mistake, this doesn't have anything to do with Turkey taking on TOO MUCH DEBT like the MSM reports (with no numbers to back such claims). The truth is Turkey's debt to gdp ratio is extremely small compared to just about every country in the world. But don't take our word for it... see for yourself. By the way, public and external debt is CUMULATIVE. Please... take a look! We'll wait...
http://www.usdebtclock.org/world-debt-clock.html
Last week we WARNED that what was happening in Turkey had a high probability of spilling over into EMERGING MARKETS and that seems to be exactly what has happened. Emerging markets are now down significantly on the year with the US markets in may respect being the only outlier.
https://uk.mobile.reuters.com/article/amp/idUKL5N1V817S
This news comes on top of the fact that trade tensions continue to rise despite the efforts from the DEEP STATE and the MSM have tried to downplay or "reset" trade talks at every turn in order to prevent even more trade escalations.
This week, we have started to see more tightening of CREDIT MARKETS. This is EXACTLY WHAT WE WOULD EXPECT if the credit bubble was about to pop.
https://www.zerohedge.com/news/2018-08-22/loan-demand-suddenly-tumbles-companies-revolt-rising-rates
We also have more data coming in that shows that the economy is cooling.
More HOME SALES numbers were reported dropping off this week.
MANUFACTURING is slowing down too.
The odds of Trump being impeached went higher this week as Cohen was convicted of violating campaign finance laws. We remain highly skeptical of this investiation as the Steel dossier was compiled under false pretense, funded by the Hillary campaign, and has not reveled one shred of evidence of Russian collusion despite the attempts of the MSM propaganda machine to create this opinion by stating this falsehood ad-nauseum. If impeachment proceedings move forward with this weak case, it will push the US one step closer to civil war but it could ease trade tensions and restore order to the ruling class. Trump doesn't appear to follow order from the elite well and instead prefers to do his own thing. We maintain that the current Mueller investigation is just another witch hunt reminiscent of Ken Star when Clinton was in office. If there was no evidence of RUSSIAN COLLUSION, then this case should have been dropped by now.
The worst part is that there was much more that Clinton could have been investigated for. Her mishandling of classified information, her destruction of evidence after she was subpoenaed, her collusion with the DNC who rigged the primaries against Sanders and the mysterious death of Seth Rich who Wikileaks has strongly implied was the DNC leaker all warranted investigation and the best we could get was "there was no intent" from James Comey. That still boggles my mind. Since when was intent any reason not to prosecute? This just goes to show that there are two sets of laws out there - one for the ruling class and one for everyone else. If you are among the protected few, you can get away with anything.
Yesterday, John Bolton sent a message to the extremists on the ground that if another chemical attack were to take place, the US would hold Assad accountable and take strong action. Cue false flag in 3-2-1...
We should be on the lookout for any chemical attacks in Syria and be VERY SKEPTICAL of any MSM reports or GOVERNMENT INTELLIGENCE reports without VERIFIABLE PROOF that Assad was the facilitator of these weapons. It goes beyond anything sane to believe that Assad decides to use chemical weapons when it is always on the brink of another victory.
BITCOIN and GOLD continue to hover around their lows on the year. We maintain that this is a great place to scale in on both of these safe haven investments as they both stand to do very well when the next financial crisis unfolds. From our vantage point, it's already here. It's visible across a number of markets already. The US is the outlier. How long do you think our market can stand alone in a global economy rife with systemic risk?
Act Accordingly,
The Market Vigilante