You must consider a few developments in regard to Inflation, interest rate hikes, war and economic stagflation. Where is the economy heading and why do I short the Russel 1000. There are a few datasets I am following and a few political events. I wont put this all into one article. I am also very busy in my job I still hold. Thus said, lets start.

What is going on in my own country?

Canada is currently under Martial Law. If your peaceful demonstration against the government is not appreciated the government can and will shut you down and retaliate. Seize your bank account, cancel your business license, seize your property, arrest you if you donated to the “wrong” party. He can and will shut down every opposition in Canada. There will be more protests and convoys in North America.

What are the Worries of the World, Russia, China?

On the world stage the Genocide Olympics are over and the Communist Party of China had their propaganda event as Hitler had it in 1936. Biden is the weakest President of the USA. He showed our enemies how to botch an exit in Afghanistan and how to leave 85 billion Dollar of equipment behind. He demonstrated how to be barely awake or conscious . Rare Earth minerals in the north of Afghanistan are now mined by China. I believe that Xi Jinpeng told Putin to wait until after the Olympics. Their chance to snatch desired lands is now.

Adding to these worldwide events domestic problems are plaguing the US.

• High inflation.
• Slowing economy, Stagflation.
• US inflation is transferred to the globe because it is the reserve currency. Portion of other country’s inflation is transferred from the US.
• Monetary policies, buying Mortgage Backed Assets, MBAs, and corporate and other Bonds increasing the Money Stock M2SL. A increased money stock is chasing goods that are NOT growing at an similar pace. More money for relative fewer goods = inflation.
• Regulatory policies, laws against energy independence i.e., more restrictions and rules are creating empty shelves and increasing inflation pressure. If you restrict drilling and the Keystone XL pipeline, upgrading oil, you will increase your dependency on other providers and drive prices up. Shortages are always a regulatory problem!

What are my prediction under the very weak Biden Administration?

• Putin will invade Ukraine
• China will take Taiwan
• Iran will be bombed by Israel for developing the bomb
• Germany will side with Russia due to their extreme leftwing government and dependency on Russia.
• Inflation in the US will continue until Autumn and turn into a recession.
• Inflation will turn into DISFLATION, a slower rate of rise.
• Then since consumer will restrict their spending due to inflation, a recession will step in.
• Unemployment rate will rise in autumn and price will come down at the end of this year
• Due to inflation increase the FOMC will hike interest hikes in the meeting in March 22. Insider traders are already cashing in and the media is pushing moms and pops to buy the dips. BUT, BUT, BUT they will only provide the liquidity for the insiders and CEO to cash in on the gains. They will be wiped out!!!
• I expect the market to crash as it did in 2000, 2008. A 50% correction due to rate hikes and following recession.
• For the SPY / S&P500 I expect to go from 480 New all time high, to 435 now, to 240 by year end.
• For the QQQ / NASDAQ I expect to go from 480 New all time high, to 435 now, to 200 by year end.
• For the IWM /Russel 1000 I expect to go from 240 New all time high, to 200 now, to 120 by year end.

To be continued