Blog : 9 Sparks for Probable Economic Shock

by Peter Leeds on April 7th, 2015

There are many factors we are watching right now which could shock the economy, and stock markets.  Among several, here of 9 of them:
  • Reserve Currency:  The global economy, including some of America's deepest allies, are turning away from the dollar as the world's reserve currency.  This video explains...
 
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  • Euro Collapse:  Greece is the first true test of the Euro.  There is no way for either side to win - Germany will float the bill of Greece's over-spending and corruption, which will only encourage Spain and Portugal to follow suit.  Most people in Europe are in favor of the Eurozone, so it will remain intact in some form, but any ripples there could be felt worldwide.  Certain types of assets, and specific stocks will actually benefit from this.
  • Venezuela:  Contagion from Venezuela, which is in chaos, has already begun spreading across South America, and could trip up global stock markets and economies.
  • Global Conflict:  Just as a former Ultimate Fighting champion keeps going, when he should retire, America has not been accepting that it's global role is changing.  China and Russia (so far) can do whatever the hell them want.  Not everybody is afraid to fight George St. Pierre any more (even though he is a world-class MMA master).
  • Deflation: As the latest horrible jobs report shows, the American economy hasn't responded to trillions of dollars which have been created, except for a boom in last year's stock market.  Even a blind baboon would have invested well in 2014.  That same Ape might not far so well in 2015.
  • Lost Decade:  Last time many of these events happened, it was in Japan.  They trudged through what became "the lost decade," which unfortunately has now stretched into the "lost 25 years."  There are many eerie similarities in America's current economic indicators, compared to Japan's just before the slump.
  • Changing Demographics:  The baby boom generation, and wartime America before that, is being replaced with fewer quality jobs, loan debts, a disenfranchised workforce, outsourced products, and little upward mobility.  This will continue to pull against America's productivity slowly, like a melting ice block.  
  • New World Order:  All these ill-advised, ego-based sanctions on Russia have accelerated their marriage of China.  They are cooperating on currency, resources, and infrastructure.  Putin doesn't care whether China or Europe buys their oil, as long as one of them does.
  • 54 Years of Oil Left:  This may sound like a long time, but nations typically don't wait until the last few days or years.  Many nations will be involved in wars prior to every economy's lifeblood running out.  And yes, of course there will be new technologies, but we aren't as close to no-oil as many believe, as we mention in this video.
  • Failure to Recover:  The jobs numbers released Friday were significantly awful, former numbers were revised lower, and many other indicators are screaming "deflation."
There were more millionaires created during the Great Depression than any other time, ever.  The difference between enriching yourself, and living in a basement rental apartment?  Preparation.  

The winners positioned themselves in the right types of assets, while everybody else was smoking cigarettes, lawn bowling, and going to the rodeo.
 

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