September 25, 2020
Macroeconomist: Next Bear Market Is Coming,Could Last Through 2023 Published 2 years ago onSeptember 25,2020By The Capitalist Click Here To See The Comments
Are we already in a bear market?
We are far from a bear market, only traders are freaking out over technicals seen on exchanges like volumes and price action.
Is a bear market good or bad?
Bear markets are bad for investors who are long in the market and good for investors who are short in the market. However, because it is difficult to predict the beginning of a bear market and when it would end, most investors get caught up in it before they could plan for it. There are a lot of things you may not know about bear markets.
Did the bear market already start?
The most recent U.S. bear market started amid the new coronavirus outbreak of 2020. The stock market crashed in March, with the Dow Jones Industrial Average and the SP 500 Index both falling more than 20% from their 52-week highs in February. Some other bear markets, as measured by the SP 500, include: 2.
Should you worry about a bear market?
Two previous bear markets have devastated the retirement plans of millions of individuals in the economy today which partly explains why a large number of jobs in the monthly BLS employment report go to individuals over the age of 55. So, not only should retirees worry about bear markets, they should worry about them a lot.
Why is inflation attractive?
Because inflation makes the money you have tomorrow worth less than the money you have today, it becomes attractive to change money into other assets whose intrinsic value appreciates in the long term.
Why is gold important to investors?
This is because inflation and the gold price share a direct relationship; when inflation rises, so does the price of gold.
Why do central banks buy bonds?
And we still have central banks actively buying bonds, supposedly meant to support their economies. There is no question that monetary policy is too loose relative to where most of the developed-market economies are, spawning imbalances in financial markets and providing a backdrop conducive for asset bubbles to build.
Why is gold considered a safe haven?
It’s also considered a “safe haven” asset because of its ubiquitous acceptance, especially in times of turmoil and political, social or economic unrest. It’s this human connection (both individual and societal) that makes gold valuable, and explains why it’s always in demand, even while supply has been relatively stable.
What happens if demand falls back?
If demand does fall back even just to more “normal” levels, this weird inventory cycle transmutes into the more historical version.
Why is gold important?
Gold has this intrinsic value for several reasons. It’s a scarce metal, but abundant enough to be mined, and it doesn’t corrode easily. Additionally, humans have an emotional connection to it because of its shine and hue.
What is the accordion effect?
Whatever the terminology, the supply chain mess has created a set of perverse incentives leading to a positive feedback loop: the greater the mess, the longer the times for delivery, the more product gets ordered if in only to increase the chance something, anything can make it past all those knots, stuffing even more goods into a now-bigger mess.