Hello Trader,
I'm really looking forward to 2021. I think it will be one of my most profitable years trading ever. The most basic reason is that I think there will be incredible volatility.
Here are the main earth shattering events that are occurring and will occur that will cause markets to move in the most dramatic way in decades, even more than in 2008.
1. Covid economic crushing
2. Largest monetary stimulus in history
3. Largest economic stimulus in history
4. Cultural and political shock waves
5. Rising international tensions leading to war
Covid
Do you think that the Covid Crisis will be over? If so, look for the global economy to boom. If not, look for the global economy to dump hard. Either way, I will make money. But the main thing is that different countries are vaccinating at different rates. This disconnect will cause stock markets and currencies to move dramatically.
Central Bank policy
It probably doesn't matter what happens to Covid, the Fed is going to pump more money into the economy in history. Repeat, in history. Increased money supply growth has a big impact on the price of:
- Stocks
- Gold
- Bonds
- The dollar
I'm going to trade all of them because those big moves usually bring big trading profits.
Massive fiscal stimulus
Biden will want to spend money like a drunken sailor. Trump already did but Biden might do even more. There is also pressure on other governments to do even more too: Think:
Fiscal stimulus tends to favor some sector and not others so we will need to be a little nimble here to make money.
We are seeing a sharp clash in culture with woke and cancel culture creating class war. This is growing at different rates in different countries. We don't often think of culture wars affecting economics but think again.
Major League Baseball just announced that they are moving the All Star Game from Atlanta because of the proposed new Georgia voting laws. That will affect both Georgia and MLB. Obviously, the All Star Game would have brought millions of dollars into Atlanta. That money is gone.
But their will also be a backlash against MLB for mixing politics with sport.
Covid combined with the massive fiscal and monetary easing are causing global tensions to rise. There is more of a feeling of haves and have nots. In addition, any time there is any type of crisis, we see political tensions rise.
Right now, there is hot war going on in:
- Somalia
- Sudan
- Yemen
- Libya
- Saudi Arabia
- Iraq
- Congo
- India
- China
- Pakistan
And those are just the ones off the top of my head. There are more.
War obviously affects markets. Note that many of the places with war are in the Mideast. Oil spike, anyone?
We have higher global tensions than at any time in decades. Market will move.
The conclusion is simple. After years of countries economically converging and after years of relative normal fiscal and monetary policies and after years of relative global calm, that is all over now.
Now, the world is in more flux than at any time since at least the early 1970's and perhaps WWII! That creates massive opportunities to make money.
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Thanks!
Good trading,
Courtney Smith
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