The Recline And Flail Of Western Civilization And Other 2019 Predictions

“I think it’s a tremendous opportunity to buy. Really a great opportunity to buy.” – President Donald Trump, Christmas Day 2018

Today, as we prepare to close out the old, we offer a vast array of tidings. We bring words of doom and despair. We bring words of contemplation and reflection. And we also bring words of hope and sunshine.

After all, the New Year’s nearly here. What better time than now to turn over a new leaf? New dreams, new directions, and new delusions are all before us like a patch of ripe strawberries. Today’s the day to make a double-fisted grab for all of them – and more.

Rest assured, 2019 will be the year that everything happens precisely as it should. Some good. Some bad. Indeed, each day shall unfold before you in symbiotic disharmony. You can count on it.

But what else? What are the essential anticipations as we embark on a new voyage around the sun? What about stocks, the 10-Year Treasury note, gold, and everything else? Are we fated for a complete societal breakdown? Will this be the year the Fed put finally bites the dust?

Today we attempt to answer these questions – and many others – with meekness and modesty. Predicting the future, like Fed monetary policy, is primarily guesswork. But unlike the Fed, we acknowledge we’re merely throwing darts in a blizzard.

By all accounts, our methodology is as unscientific as prophecy via tarotology. We shun common forecasting techniques for a conjectural approach. First, we engage all matters of fact, fiction, fakery, and fraud. Then, through induction, deduction, biased interpolation, gut check filtration, and metaphysical reduction, we arrive at precise, unequivocal answers.

But before we get to it, a brief disclaimer’s in order. This proviso from Yogi Berra should do:

“It’s tough to make predictions, especially about the future.”

With that out of the way, we face our limitations with purpose and intent. What follows, for fun and for free, are several simple guesses for the year ahead.

Stocks, Treasuries, and Gold in 2019

Stocks – A Major Meltdown

We recognize the stock market’s comprised of many stocks and that they don’t all move in tandem. Certainly, it’s presumptuous of us to lump all stocks into the same prediction. But today’s conjectures, by their very nature, are presumptuous. Thus, stocks, for our purposes here, are the broad U.S. stock market – the S&P 500.

To begin, the great stock market break that’s followed the S&P 500’s all-time high of 2,940, which was notched on September 21, will gain momentum as 2019 progresses. In fact, the S&P 500 won’t see 2,940 again for at least a decade – possibly much longer. Here’s why…

The Fed’s monetary tightening program of increasing the federal funds rate and reducing its balance sheet has dented the structure of the stock market, which has been fabricated over the last nine years. A vital prerequisite of the bull market – ultra-cheap credit, courtesy of the Fed – has been removed.  Without it, the stock market’s unable to hold its extreme valuations.

Over the first six months of the New Year, wild hundred point swings in the S&P 500 will be commonplace.  Preprogrammed algorithmic trades will trip the market back and forth in wild stomach-churning gyrations. Bulls and bears – both human and artificial – will fight to the death for the upper hand.

By mid-year, however, the bulls will have exhausted their resources. Shrewd investors will sell the multiple bounces leading up to the summer months and go to cash and gold. About this time, the brief boon to businesses from President Trump’s tax cuts will be over. The economy will be en route to recession.

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