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December 5, 2018 | Significant TREND Change has Occurred!

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.

Today’s Wall Street Journal outlined two factors which I would view as a significant trend change. The first is the Chinese selling of some of their real estate holdings in the U.S. This has now happened for two consecutive quarters. This was the first time where more real estate was sold than bought by the Chinese. I think this is significant as a trend indicator…and suggests a trend change going forward.

 

The other factor is falling sales for Toll Brothers. This luxury builder is now down some 15% for the recent quarter. The California market is down some 40%. This suggests a change in trend which I think is very significant going forward. Real estate transactions are now declining globally and without a change in Central Bank interest rate policies, this decline will accelerate in 2019. The evidence is appearing daily.

 

The beginning of a BEAR market in real estate is rather evident. I see the same slow-down in my area of Tucson/Phoenix. All starts slowly but current trends suggest that a major down trend is now in motion. Mortgage applications are down and all this means that ‘values’ will start a decline some time in 2019. If past history is meaningful, then we can assume that a general BEAR markets for the overall economy is also starting.

 

One other item of significance for our economy is the change in thinking of major investors. Investors are viewing CASH as a way to avoid the volatility in our markets. This change to CASH could be significant and this means a further trend towards a BEAR market in 2019. The ten-year BULL market may soon be over. Change is in the air and the leading indicators now point to a significant TREND change for 2019.

 

As I write the 10 year bond rate is at 2.915%. This is down from 3.24% on November 8. This is a huge drop in this key indicator in just one month’s time. What is happening? It appears that investors are starting to flee equities and starting to buy government securities. This reveals FEAR in our markets and fear means that more selling of stocks is on the horizon. Our central bank manipulators may prevent a RUSH to the exits for a few weeks, but I think this manipulation will not last more than a few weeks.

 

The ten-year BULL market is finally ending and those with discernment can sense that this change is significant. Expect that this change will happen slowly but relentlessly. Our central planners can prevent a sudden flash crash via their various manipulative policies. Watch what our Fed does in the next few weeks and then check out what the BIS (Bank for International Settlements) does behind the scenes. These two institutions are key to what might happen going forward.

 

You can subscribe to BIS alerts via email and get their thinking on the Big Picture. Go to:  http://www.bis.org and subscribe to their email alerts. The BIS is the Bank for all Central Banks and their policies set the agenda for the world economy. Even our Fed must follow the dictates of this organization (to some degree). We now live with a global economy and all trade and monetary transactions are interconnected.

 

The Swift payments system tries to monitor all money flows for our planet and this is why the USA can use sanctions to discipline other countries who reject U.S. policy actions. All this could be challenged, however, if our global economy turns south in 2019. Russia, China, Iran, and the other BRICS may eventually drop out of the Swift system. This is an issue to watch in the coming months.

 

What is SWIFT?

SWIFT stands for the Society for Worldwide Interbank Financial Telecommunications. It is a messaging network that financial institutions use to securely transmit information and instructions through a standardized system of codes.

 

Need to transfer money overseas? Today, it is easy to walk into a bank and transfer money anywhere around the globe. But how does this happen? Behind most international money and security transfers is the SWIFT system, a vast messaging network used by banks and other financial institutions to quickly, accurately, and securely send and receive information such as money transfer instructions. Every day, nearly 10,000 SWIFT member institutions send approximately 24 million messages on the network.

 

I would conclude with this conviction. A trend in motion continues until it ends. The ten-year BULL market was a trend in motion. I sense that it is now ending in 2018. The new year will bring significant change in all areas. Foreign policy will change. Fed policy will change. Domestic policy will change. Consumer thinking will change. A cycle is ending and a new cycle will develop starting in 2019. Watch and prepare!

 

I am: https://kingdomecon.wordpress.com.

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December 5th, 2018

Posted In: Kingdom Economics

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