-Disclaimer- My native language is French therefore my English is not perfect. Thanks for your understanding.
Hi Steemers!
The US stocks have been very resilient lately even if we saw volatility picked up a bit. Is a correction overdue?
Very short term, I think this resilience will continue. But here's what worries me: the foundation of this debt based monetary system is at risk. And this is the very same foundation for the markets. Let me explain...
This monetary system is based on debt. This debt is created by Central Banks and by the banksters via fractional reserves banking. In order for this system to be viable, credit must always expand.
If you look at the latest data for C&I loans on the Fed's website, we can see that it has peaked in november 2016. Since then, it has fallen a bit.
And the global credit impulse is not looking better. Thanks to Zerohedge and UBS for this chart.
On top of that, we've heard a bunch of Central banksters turning/being more dovish. The Fed is raising rates and wants to unload their balance sheet. That is a major shift in their policies since last year. Raising rates (making debt more expensive) when credit is declining does not sounds good to me.
I'm not saying that there will be a major crash tomorrow because there is still a lot of liquidity in the system. But we can definitely see where it's going.
Please let me know your thoughts!