When the bough breaks the markets will fall.

Buy Gold Buy SilverBitcoin hits over $11,750! The Dow is 24,180!! Is this real life?

I sit and watch these markets in shock and in awe. Yes, gold and silver are down from recent levels, we are still up for the year. What is going on in this world where a companies that are not profitable have stock evaluations that are astronomical? Where a digital nothing is worth $11,750?

These markets are heavy! The bough can’t hold much more!

If you are invested in either (the stock market and/or cryptocurrencies), that’s great take advantage of it while you can. Diversify, and by all means have financial insurance to protect you from either bubble popping!

If you look back to October 2007 the Dow closed over 14,000, a new record.  Come March 2009 the Dow was just over 6,600, having lost over half it’s value. New sectors open, new businesses take over, replace those that died during that down time, those who survived were bought out by the big boys at crazy discounts. Many lives were changed in those 17 months and trillions disappeared. Here’s an article that shows a rough break down of what was lost, including $11 trillion out of the stock market, $3.4 trillion out of retirement accounts and $7 trillion out of the real estate markets.

We are now approximately four years past the worst of it and the stock market sits at 24,000. Are things better? Hardly! Yet we are seeing bubbles unlike we have ever experienced in our history.

We all know what happened to allow the “recovery” the last few years.  If you forgot, I’ll give you a hint…it was Quantitative Easing (QE).  The injection of nearly $4.3 trillion (yes, trillion) in to the markets. Of course that’s going to take the markets to record levels and beyond, there’s no question, and it is doing just that.  It’s not the public who are investing, individuals investing in the stock market is at near record low. It’s the big boys who already have mountains of cash, getting more cash to shore up their interests and make a ton more on an inflated market. In my opinion, stockpiling for when the bubble bursts. They’ll be hit too, but with tons of cash, FAR more than when the great recession hit, they can afford to lose some and still be so far ahead they’ll continue to thrive. Not only thrive, but they will be able to buy out others for massive discounts.  Think about it. It’s a great strategy.

Now the Feds are saying that they are going to reverse what they have been doing all these years of records highs and start to take cash out of the system.  Do you think these record highs will continue for much longer?  I’ll give you a hint…Nope.

Every time the stock market has experienced such bubbles…well, let’s just say it’s been really, really nasty. The good ones (and by “good” I mean near catastrophic) are given names, you know, names like the “great depression” or the “dot com crash”, the start of the great recession, etc. Heard of these?

I feel that I can say with pure certainty that no one will ever forget the name of the next crash! The next crash will echo throughout whatever history comes after it.  We are set up to fall unlike any thing we have ever experienced, or imagined we could experience.

What we do know is that this stock market ride has to end.  We don’t know that about Bitcoin. There’s only so much business a corporation can generate (to keep it simple), something digital has no such limitations.  I know, supposedly Bitcoin is limited, I talked about this a few weeks ago, they have shown that the code can be modified once they near the “limit”. Greed runs that world, I assure you they will find ways to keep pushing out more Bitcoin once it starts drying up a bit.  If you are in the Bitcoin (cryptocurrency) market, ride it as long as you can but please be smart and fight the pull to be greedy.

As I mention a bit earlier, the Fed has announced that they are reversing QE. If you ask me, that has to be major sell signal for those invested. That sounds like a call to short the market.  The members of the Fed have even questioned their own decision to reverse QE.  Here is link to an article by CNBC in which Janet Yellen herself says that she is scared that they may have (or may still) created a “boom-bust” economy, but they have to do something.  The Fed is still planning on increasing interest rates all the same, despite the potential crash(es) it may very well cause.  I think we may very well see an increase this month. The Feds meet again in less than two weeks.

Could this be the rally before the Fed increases rates again? Do the big boys know that this is coming and are pumping up the markets, taking advantage of the tax bill passing, so that they can max out their return before those who depend on the stock market for pensions, IRAs, 401Ks, etc., get destroyed?  We’ll see.

I hope you have insurance.  The absolute best form of insurance to protect you against any bubble, is physical gold and silver. Physical gold and silver are the only means of asset protection that has beat every crash, that has beat the course of history and stood the test of time.  If you want to play in the markets, and/or play with digital currencies, please be sure you have insurance!

Oh, and PS: if you are invested in bitcoin (and a few other digital assets) and have a CoinBase account, the IRS will know everything about what you own. The IRS has ordered CoinBase to turn over their accounts. And…the IRS is categorizing crytocurrencies as property, not as a currency. Can you guess why?  I’ll give you a hint, so you have to pay no matter what.  Be careful out there. Protect yourself with physical gold and silver.

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