This Is It! The Party Is Over

This is it! The party is over. The world is now facing the gravest economic and social downturn in Modern Times (18th century). We are now entering a period of global crisis that will change the world for a very long time to come. This should come as no surprise to the people who have studied history and also read my articles for the last few years. Many others have also warned about the same thing. But since MSM never talks about the excesses in the world or the risks, 99.9% of people are totally unprepared for what is coming next.

THE 4,000 POINT FALL IN THE DOW IS THE MERE BEGINNING

The 14% fall in the Dow last week and similar in many markets around the world is the mere beginning. I warned investors about this stock collapse in recent weeks. In my article on Jan 26, I wrote “Stock Collapse and Gold Surge Imminent” and again on Feb 9, I said “The Crisis will Propel Gold and Sink Stocks”. We have last week seen the beginning of the stock collapse with a 4,000 point fall in the Dow. The gold surge is still to come. We are likely to see further strong falls in stocks very soon.

Fundamentally, it has been clear for quite some time that stocks and the world economy are at the end of a secular bull market. The falls in the last week have confirmed that the party is over and that we are now starting a secular bear market that will affect the world for years and maybe decades.

THE DOW UP 40X IN 40 YEARS

The era of printed money and unlimited credit driving asset prices to ever dizzier heights is now over. If we take the Dow as one example, it has gone up 40x in the last 40 years. The average annual return has been 11.53% including reinvested dividends. This means that an investor in the Dow has doubled his money every 6 years, on average, over a 40 year period! So $25,000 invested in 1980 would be $2 million today.

The coming downturn will not take 40 years. When bubbles burst, everything unravels very quickly. It could take say 3-7 years for the Dow to come down 90% or more. In 1929-32 it took less than 3 years for the Dow to fall 90%. And the situation today is much more serious when it comes to overvaluations, debts, deficits, etc.

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