In a recent Telegraph article, the Royal Bank of Scotland (RBS) has advised clients to sell “everything” except high quality bonds. The stress alerts are similar to the alerts of 2008 when the housing market collapsed. With the downward trend in the Chinese markets in the past couple of weeks, it is clear that these markets are in a big correction phase and that we could witness a 10 to 20% reduction for the European and American markets.
According to Morgan Stanley, the price of Brent crude could fall to the 20$ mark if the US currency keeps rising. It is obvious that the Fed is manipulating the currency trade via quarterbacks like JPMorgan Chase and Deutsche bank. The recent hike of .5% for interest rates by the Fed is a big factor in this.
The debt bubble is about to pop and this writer believes that nothing can stop it from happening. The system is broken beyond repair and must be replaced by another. When this happens, the transition phase between the 2 systems will be very difficult for many people. In the crash of ’08, 8 million people lost their jobs and 6 million lost their homes in the US. This time around, it could be even worse.
Wall Street’s major players are also worried that 2016 will be even worst than 2015 for the markets. Optimism has taken a huge hit in 2015 for investors and this trend will continue in 2016. The primary concern to strategists going forward in 2016 is how divergent central-bank policies — the Federal Reserve tightening and the European Central Bank easing — will boost the dollar and subsequently pressure earnings of U.S. companies doing business abroad. They’re also looking for heightened volatility and uncertainty during a presidential election year.