Yesterday we reported the recession call by The Economic Cycle
Research Institute.
If that weren’t enough bad news, here’s a “doomsday” excerpt from
Casey Research’s article titled, “Is the US Monetary System on the Verge of
Collapse?”
“(We)...turn to the work of Carmen
Reinhart and Ken Rogoff (former Professors at U of MD and Harvard), who studied
the factors contributing to 29 past sovereign defaults. They found that default
(or debt restructuring) occurred on average, when external debt reached 73% of
gross national product (GNP) and 239% of exports.”
They presented a chart that shows the US external debt is now 750%
of exports, over three times higher than the average of countries that
defaulted or restructured.
Another chart from the article is not pretty either; we are right there with the “PIGS” (Portugal, Ireland, Greece and Spain) as far as our debt is concerned.
I
continue to be amazed that so many think that the US Debt is no big deal. Now I don’t think the US monetary system is
about to fail, but it will if we don’t get our act together…and we need to act relatively soon. Now for some market discussion…
I
think we will head back to the 1120 area on the S&P 500. That’s when we will find out if this correction
is just a correction or the start of something much worse. The timing could be days or weeks away.
The
Navigate the Stock Market analysis is HOLD again today.
I sold on the 27 July sell signal at S&P 500 1301 and I am
defensively positioned with only a small amount of my portfolio invested in
stocks. (Zero stocks in the 401k.) (See the page “How to
Use the NTSM System” – the link is on the right side of this page).
I
sold my 100% long position in the trading portfolio at mid-day today at a
better than 10% profit. The SSO trade I
established Monday was up 10% in about 24-hours.
