Monday, April 11, 2011

Stock Market Will Tumble!

DJIA (19 July 1987 through 19 January 1988).Image via Wikipedia      Those who know the market, know that it will tank within a month or so. The increase in the cost of gas will force Americans into bankruptcy in unprecedented numbers. Working Americans have already begun to see negative balances in their budgets, but the price of gas is, without a doubt, going to rise to five dollars a gallon. The oil companies are determined to hit this bench mark and hold gasoline at that price.
      Five dollar a gallon gasoline will result in the liquidation of retirement accounts, so that Americans can maintain their current standard of living. The price of houses will drop sharply again, when already cash strapped home owners can no longer afford to stay in their homes.
     The sell off of homes and stock will result in a stock market crash that will make the crash in the twenties look like a slight dip. This will result from millions of shares going up for sale at the same time and over a prolonged period of time. The number of shares for sale will be greater than the demand for stocks and prices will plummet. The value of companies will not be able to hold the price of their stock to more than ten percent of it's value or less. The market may stabilize shortly as companies buy back their own stock, but this will be short lived. The hand writing is on the wall.

     2012 may not be the end of the actual world, but it will be the end of the financial world in America. Politicians will not prevent this crash because they know that the value of the dollar must be lowered, so that the U.S. can pay down the national debt. It is imperative that the debt be payed down so that the country can get out from under the enormous debt it has. Only massive rates of inflation will make it possible for the nation to do this. The price of gold, copper, silver, and platinum will rise, but the price of oil  and homes will actually fall because it will be to expensive for average Americans. This economic Tsunami will send stocks crashing around the world and countries that depend on American business or that hold American debt will be hit especially hard. Countries such as South Korea, Japan, and China, will feel the crunch especially hard when the demand for the products that they export dries up. Europe will be wracked by financial ruin as tourism evaporates.
     I predicted the recession that we entered in 2010 and I am warning you that this will dwarf it. It may be the worst economic crisis since countries began keeping economic statistics.
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