Bigworld, Well, so much for a 'Santa Claus' rally. Your idea of going short might not be so bad after all, although I certainly wouldn't use leverage/3X. It's starting to look like 2023 could be a good year to just sit on the sidelines in cash/T-Bills, at least the first half of 2023.
For now it looks like the market is in limbo, a 'damned if you do, damned if you don't' situation. Good economic news that is normally good for stocks is bad in this environment, since it makes the Fed more hawkish. And while bad economic news is good for the Fed/inflation, it is bad for corporate earnings, retail sales, etc. So it seems like a no win situation for stocks. The only really bullish factor is when the inflation numbers actually drop.
For investors, it's starting to sink in that this could be a long bear market, with flashbacks to the 1970s. But as Nouriel Roubini points out, the debt/GDP was only 30-35% back then, and today it is a monstrous 120%, yikes. The question isn't whether there will be a financial wipeout, but the timeline.
Do we muddle through for a period of years or longer, or does a crisis come much sooner? Is the finance oligarchy ready to transition from the crisis to their Great Reset, or will they try to hold the dollar system together for as long as possible, perhaps for many more years of circling the drain? The China/Russia plans for their gold backed alternative to the US dollar might be the key factor determining the timeline. Do the US finance ghouls push the world deliberately into a preemptive crisis to force everyone into an IMF bailout (SDRs), figuring that at least then the Western oligarchy will retain significant control? Lots of questions.
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