Economy: a summary and a perdiction

I am actually a financial adviser, and today I will talk about the general trend of economy.

From what I have seem last year, the general trend was global deflation: Chinese bubble burst, material prices drop, countries compete to devalue their currencies, etc…

The basic logic is: USA stopped printing money, as the value of US dollar goes up, the price of major commodities goes down, because major commodities are valued in US dollar. More importantly, dollars flowing back to US means USA stopped proving leverage to help boosting the economies of developing countries. Since 2015, Russia and Venezuela fell into crisis. Apparently, the crises were caused by the oil price; deep down, they were reflections of global deleveraging. The party is over.

Then, things are changed. US dollar stopped rising; oil price bounced back; the increases of interest rate are off, before 2016, Federal Reserve said there would be 4 rises of interest rate in 2016, so far, we have zero; China was bleeding foreign exchange reserves for the US dollar backflow, suddenly, the bleeding slowed down. Why? The answer is Donald Trump.

To be specific, everything is for helping Hillary to win the election, because the Wall Street doesn’t want Trump.

If people are happy with their life, votes will go to the ruling party; if people are not happy with their life, votes will go to the opposite part, Trump, in our case. Nowadays, people’s wealth is mostly in stock market and real estate. People will be happy when the prices rise; unhappy when the prices drop.

In 2008, people elected Obama that used “change” as the campaign slogan. Leaders of Wall Street, such as Warren Buffett and George Soros supported Obama. In fact, according to Hillary’s email, Soros said he regretted backing Obama in 2008.

How did the Wall Street back Obama in 2008? Did the house prices drop? Yes, it dropped 20 percent compare to 2006. What about the financial market? September 2008, Lehman Brothers went bankrupted after Department of the Treasury, Bank of America and Barclays abandoned their takeover bids. September 2008, 150 billion dollars run away from money market fund in two days. As a result of that, a bank run was created in money markets. September 2008, U.S. government took over Fannie Mae and Freddie Mac. October 2008, stock market plunged. Look at the chart, you can imagine the fear in people’s heart when they were experiencing the crisis. In fact, the line only stayed below 0 percent for only about half a year.

And the result: November 2008, Barack Obama was elected the 44^th president of the USA.

So, when we want a new party to lead the country, we drop the price of the market. What if we don’t want a new leader? We raise the price.

After the bull market of 2015, almost everybody was expecting an adjustment phase in the first quarter of 2016. The market started to adjust in January, however since February, it went straight up.

Why? Because no one believed Trump would win. However, in February he won 3 states out of 4. The elite was terrified, and started to boost stock and real estate market. See the red arrow on the chart? That was March 1^st, the super Tuesday. The stock price made an obvious increase to prevent people from voting Trump. 

In conclusion: in order to stop Trump, the stock and real estate have to keep raising. Despite of that, Trump still won the Republican presidential nominee pretty fast, and that brought a short term financial turbulence.

Learning from Obama’s case, the final battle will be in September and October. So what is going to happen? In October of 2016, the US market will raise to a new high.

Sometimes, top class people don’t want what you think they would want. You might think they would support cancelling minimum wage. In fact, most people that support cancelling minimum wage are poor people. So what do the top class people want? Good market return? No. Super rich people concern safety the most. They want orders, globalization and status quo.

Nowadays, we have a relatively safe and stable global environment, but it is not granted. After the World War Two, people learned hard lesson. The United Nation was formed in 1945 and Universal Declaration of Human Rights was adopted in 1948. Since them, USA assumed the responsibility to maintain the global order.

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Pushing market is the plan of Wall Street. What they don’t know is: Hillary is destined to fail, because she is in bad fortune and Trump is in good fortune. A person in bad fortune is indicated to be unsuccessful, so it will not be a good thing if Hillary gets elected. Hillary has Wood as favor and Metal as foe, she is still doing good so far, because the months are good. After the Wood month (3) and (4), she had 9(5) which is Water sitting on Water Tomb, then (6) that merged (9) and became Water, then (7) that would suppress Metal, then 2(8) that will be Wood on Wood Tomb. Her real bad time will start August and it will last all the way to the election in November. In fact, November will be the worst month for her. In conclusion, despite the script of Wall Street, we still need to be prepared for Hillary’s failure, and Wall Street may change strategy if it doesn't work . And that will create new changes in the financial market.