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June 28, 2018 | Significant Change in Trends Developing!

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:

Today’s Wall Street Journal had a series of articles which point to significant change developing. Let’s look at a few of these changes and why our markets will likely slow in the coming weeks and months.

  1. Globalization is starting to reverse. Companies like Harley Davidson are moving some production out of the USA. This is happening to General Electric and other conglomerates. Localizing production and decentralizing operations is a clear sign of deglobalization. The motive is to reduce costs and serve clients more efficiently. This trend (now in motion) could be beneficial for consumers in reduced costs.
  2. The repatriation frenzy (companies returning their foreign staches of profits to the USA) could also help with decentralizing our markets. This is a deglobalization trend which is now in motion. This trend could also help our cyber dollar to strengthen  as foreign currencies are exchanged for dollars. We might also see more corporate buy-backs of stocks to boost prices for these stocks. All this is changing our markets and slowing global trade to a degree.
  3. Mark Carney, the U.K.’s central-bank chief, is saying that growing protectionism could sap some of the current strength of the global economy. Emerging markets, where debt in dollars is excessive, are now facing a squeeze from rising dollar value and higher U.S. interest rates. Carney thinks, however, that British banks are strong enough to withstand a disorderly exit from the European Union.

My Comments: Our markets are changing and a slowdown is rather obvious. If current trends continue then a major global slowdown could occur for all our markets this year. The Baltic Dry Index (a measure of trade growth) is down 4.17% YTD. This is minor but suggests that trade is slowing as I write.

The Case-Shiller 20 city home price index reveals that most major markets are now in a serious price bubble. Mortgage applications are starting to head down and with higher mortgage rates this means that all these bubble markets will start to deflate soon (by the end of 2018). Real estate is the key to where our general markets are going IMO.

Our global markets have been expanding for some 111 months with no serious corrections. All this expansion has been accomplished with more debt and deficits. Total debt per U.S. citizen is now $215,079. Savings per family is only $5,236. All these numbers suggest that trends must reverse eventually. The consumer is key to where markets go.

Mr. Trump has enjoyed a positive ride so far with his economic policies. All this could change by election time 2018. To reverse this slowdown would require a major change in central bank policies. I don’t see this coming. All the QE and negative interest rates are disappearing in most markets. This means the slowdown is real.

Prepare for major change in our markets going forward. This change will reveal who has been swimming naked (as Warren Buffet says). Those with a lack of discernment and judgment will suffer first. Those who have been discerning and awake will manage to survive as these markets change from boom to bust. Think for yourself! I am:

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June 28th, 2018

Posted In: Kingdom Economics

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