{"id":31751,"date":"2018-03-01T06:58:11","date_gmt":"2018-03-01T11:58:11","guid":{"rendered":"http:\/\/olduvai.ca\/?p=31751"},"modified":"2018-03-01T06:58:11","modified_gmt":"2018-03-01T11:58:11","slug":"chart-predicts-every-market-crash-in-history","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=31751","title":{"rendered":"Chart Predicts Every Market Crash in History"},"content":{"rendered":"
\n
\n
\n
\n

Chart Predicts Every Market Crash in History<\/a><\/h3>\n<\/div>\n
\n
\n
\n
\n
\"\"<\/div>\n<\/div>
<\/figcaption><\/figure>\n<\/div>\n<\/div>\n<\/div>\n
\n
\n
\n
<\/div>\n<\/div>\n<\/div>\n
<\/div>\n<\/div>\n
The Fed blows bubbles. Then it eventually pops them. Where are we in the cycle?<\/p>\n<\/section>\n<\/div>\n<\/header>\n
\n
\n
\n
\n
\n

Bill Bonner writes This Has Predicted Every Market Crash in History<\/a>.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

\n
\n
\n

I recreated the chart in Fred and added trendlines. But let’s tune in to Bill Bonner.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

\n

\u201cBuy the dip\u201d has worked for the last 38 years. And now, investors are more than 100% convinced that it will work again. But they are wrong. Every major stock market decline and every recession in the last 100 years was preceded by the Federal Reserve raising short-term interest rates by enough to provide the pin to prick the balloon.<\/em><\/p>\n

Note the emphasis on every. Yes, there have been periods where the Fed raised rates and a recession didn\u2019t ensue. Everyone knows the famous saying about the stock market having predicted nine of the past five recessions! That may be true, that rising rates don\u2019t necessarily cause a recession. But as an investor, you must be aware that every major stock market decline occurred on the heels of a tightening phase by the Fed. More importantly, there have been no substantive Fed tightening phases that did not end with a stock market decline.*<\/p>\n

This is an economy built on debt. The whole capital structure \u2013 stocks, bonds, and real estate \u2013 now depends on excess debt\u2026 and more of it.<\/p>\n

In a correction, the only way to stop stock prices from falling and the economy from shrinking is to bring in some more debt. But when you do that a few times, you are soon beyond Peak Debt\u2026 which is to say, you\u2019re way over the legal limit.<\/p>\n

Debt has been growing three to six times faster than income for more than an entire generation. This makes the old 1.5-to-1 ratio of debt to income seem quaint. It is now 3.5-to-1 nationwide.<\/p><\/blockquote>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n<\/article>\n","protected":false},"excerpt":{"rendered":"

Chart Predicts Every Market Crash in History The Fed blows bubbles. Then it eventually pops them. Where are we in the cycle? Bill Bonner writes This Has Predicted Every Market Crash in History. I recreated the chart in Fred and added trendlines. But let’s tune in to Bill Bonner. \u201cBuy the dip\u201d has worked for […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[6190,1806,122,303,431,501,14648,13390,534,15551,3650],"class_list":["post-31751","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bill-bonner","tag-bubble","tag-central-bank","tag-fed","tag-interest-rates","tag-market-crash","tag-michael-shedlock","tag-mishtalk","tag-monetary-policy","tag-rate-hikes","tag-us-federal-reserve"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/31751","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=31751"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/31751\/revisions"}],"predecessor-version":[{"id":31752,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/31751\/revisions\/31752"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=31751"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=31751"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=31751"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}