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June 25, 2018 | Market Psychology Changing! Anxiety Replacing Confidence!

Donald B. Swenson: Born January 24, 1943, Roseau, Minnesota. Graduated H.S. 1961, Moorhead High, Minnesota. Graduated College 1968, Moorhead State University, Minnesota. Designated member of Appraisal Institute (MAI), 1974. Employed with Western Life Insurance Company, 1968 – 71; Iowa Securities Company, 1971 – 73; American Appraisal Company, 1974 – 81. Part-time teacher/valuation consultant/bartender, 1979 – 2008 (taught workshops at Waukesha County Technical Institute, Wi. and Madison Area Technical College, Wi.). Retired 2008 (part time teacher/blogger), AZ. Self educated economist/philosopher/theologian: http://kingdomecon.wordpress.com.

All our markets respond to psychology as our money is now part of our consciousness. Thinking about trends and political issues can change psychology. Leaders can create anxiety. I see this happening as I write. Investors are gradually becoming more anxious about trends and various political decisions. Tariffs are part of this anxiety. Interest rates are part of this anxiety. A possible market correction is also part of this anxiety.

 

The past 111 months have revealed that confidence was present within our various markets (mostly). Suddenly, policies of Mr. Trump on trade and Fed policies on interest rates have created market anxiety. Could this emotion cease as events play out? Yes, this is possible. A major change in our Central Bank policies back to stimulus and lower interest rates could reverse this investor anxiety. It’s amazing what more stimulus does to market psychology.

 

China has already started to offer a lower reserve ratio for bank lending. The idea is to stimulate lending and pump more digital money into their markets. Others may follow this lead. Canada is very concerned about their bubble markets and this has already resulted in lower interest rates over in Canada. Argentina and Turkey are adding stimulus. Japan, Sweden, and France still have some negative interest rates. Stimulus is what could change this anxiety back into confidence.

 

But the opposite could also occur. Anxiety could change into concern and then concern could change into fear. Emotions are fickle and our politicians and our banking elites are unstable in their thinking. What happens at the TOP will affect all our markets as all markets are interconnected. What happens in the USA is likely to affect all our global markets over time as all markets are interconnected. Right now I witness ANXIETY everywhere.

 

We live with digital/cyber markets which operate at the speed of light. What happens in a major market like the USA will transfer to most markets immediately. If our leader, Mr. Trump, continues with his tariff and trade issues and if our counterparties choose to retaliate with similar trade and tariff increases, then this current emotion of anxiety could turn into concern. Concern could turn into fear (in time). We will need to watch and witness what happens in the next couple of weeks.

 

As I write the DOW is down some 483 points. NASDAQ is down some 212 points. S&P 500 is down some 55 points, FTSE MIB is down some 533 points, DAX is down some 309 points, TSX is down some 268 points. This is a broad indication that our markets are experiencing ANXIETY. Our big boy Central Banks will need to act if this trend continues. China is acting and I imagine the others will act this week. We will then have some idea where events are going. Think for yourself! I am: https://kingdomecon.wordpress.com.

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June 25th, 2018

Posted In: Kingdom Economics

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