It is easier to predict the past and you will hear many doing it now and in the near future. However I’ve been calling this crash here now for sometime and the Crash of 2025 is on deck.
Here is the chart from my article here on the 20th March.
As I write its another 2% down in the pre-market.
So did you get the whole memo?
It’s a trifecta of bad news.
Tariffs. Which will up prices thus lowering American consumer buying power. They implode global trade, which probably creates a US and global recession. Lower purchasing power plus recession is bad. Now add.
DOGE. Lets say they cut $1tr off the US fiscal budget. That’s $1tr that would be going around the circuit of the economy. It doesn’t matter, in the short term, that its scammers or wasted resource or created by incompetence and errors. (That’s a long term issie) What matters right now is it’s $1tr less in the economic circuit. Remember a lot of that money is coming back as taxes and certainly was going to pulse through the shops and enterprises of the US. Incompetent wasteful fraudsters, drive cars, get haircuts, go shopping, eat big macs. Government stimulates the economy by pumping cash through the system and this saving will do that opposite. $1tr of economic cooling is about 3% of GDP. So the consumer is going to be caught in 3% of recession from Doge and about the same for tariffs. That cash flow pincer is a depression.
Lets destabilise the whole world by threatening conflict just about everywhere. How is that going to pan out for the dollar, treasury bonds and interest rates. Its at very least not going to be calming. Even joking about Greenland, Canada, pulling out of NATO, preparing for Asian conflict is enough to crash the market.
This is the combination of blows that is crashing the market.
Assets go up when uncertainty falls. Assets are worth less in an unstable world. Anyone of the above developments could create a crash, even in a modestly valued market but put them above together and you have a set up for an epic rout.
I’m out, holding only material positions in precious metals and a couple of stocks (I should sell) and even the precious metals are held reluctantly because when markets crash everything can get hammered.
So here is an indicative chart of level we can head down to. Its Ugly.
Every level down is less likely, but this is politically driven so its not a question of finance, it’s a question of governance. ‘Revolutionary’ they say, well that’s really bad right there. A lot of things perish in a revolution and most of them good things.
So to get set, you should draw your projection on a chart and watch the market prove you right or wrong, while remembering the market doesn’t listen to you so you have to listen to it. Like any game you want to win at, keep your eye on the ball and try and gauge it.
Im out, but the way to progress is the same in all these types of circumstances. Clear out the trash in your portfolio first, then work up into quality, until you feel comfortable with what you hold. If you are a buy and holder, then fine, but if you are not, don’t panic, just adjust. I’ve adjusted as you might guess from my previous articles leading up to this and that adjustment is to go to cash. Too me now, the only thing that is important is where is the bottom, because its about a solid re-entry now. Rather than worrying if the market is crashing, to me its about how far and how fast. The dotcom crash was over 2 years long as was the Crash of 1929. This I fear is going to be similar because the market is terrible high, and it is being shot down from lofty valuation which were only sustainable under the old rules of government supporting. That is the last bit of the ‘memo,’ what has gone before is over.
Unless there is a miracle, this is a big one, perhaps a defining crash.
Look out below.