Are We Gonna Crash?

I’m sharing what I presented to some friends. This is what I’ve garnered in my own research.

Instead of looking at news and valuation for what drives the stock markets, why don’t we look at the balance sheets. Below is a chart of the S&P500 vs assets of major central banks over the last 12 years. Pretty consistent right?  



Below are the biggest money supply increases / money printers of the world. The Fed, ECB, BOJ. Surprisingly, PBOC or People’s Bank of China did not increase. That could be because China issues bonds mostly in USD, not RMB. It needs to maintain currency stability to service USD debt.



Looking at the MSCI Europe, the index trend pretty much follows its balance sheets / money supply. Both rise in tandem.



The MSCI Japan also increases in tandem.



The Chinese index did not rise and mirrored the balance sheet / money supply. It was sideways from 2009 – 2020.



While the stock markets have corrected, it is unlikely to fall below March 2020’s low. It may actually achieve a new high. The time to lift the lid off the paddle and take profit is when the central banks are hiking rates to slow down the economy. That is a long, long time away.



https://www.youtube.com/watch?v=B8YpjFblX-s

This is a very good video explain how stock markets / money supply ratio is a better explanation of stock performance. Judging by the looks of it, the S&P500, European and Japanese stock markets may be the best performers for the next 1 to 2 years.



https://www.youtube.com/watch?v=16HeajUaXRg&t=156s

I also have a new YouTube channel where I express my personal views. It is not for profit nor advisory in nature. I'm merely sharing what I've researched and keeping a record of what I've said over time. 


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