Friday, 16 November 2012

Is Apple the next Western Bubble to POP?!

I've been highlighting over the last few weeks how weak the US stock market is at the moment. I've shown forecast after forecast of how the S&P 500 could/will fall - and it has. However one of the main questions I'm getting at the moment is:

"But why is the Stock Market falling? The news says things are peachy now..."

Well for a start, without sounding too crass, if you believe that we're about to grow out of this recession, 2 points, i.) Not a chance in hell. Apple, the Stock Markets and the economy are going to hell in a handbasket, and ii.) you really need to watch this is full: www.HedgingAgainstUncertainty.com paying particular attention to the wealth cycles I explain in it.

The main reasons that we've seen a slight climb in equities over the last few months is mainly due to QE3 and also the fact that the Powers-that-be are all playing the status quo game. Election years are funny times and in a 6 month period we're having the US, Chinese and German elections. So once all that is out of the way, then the drama (Europe) can then unfold. As you may have noticed, just before the US election the NFP report was unusually rosy compared to previous months and the words 'FISCAL CLIFF' were nowhere to be heard on the news.

Also, another reason the US Stock Market (S&P 500) has been relatively buoyant recently is because Apple was the only thing keeping it afloat. However with less than expected iPhone 5 sales and less than expected 'fake growth' with QE3 and other factors, the Apple bubble is now popping. And as Apple deflates, so too will the S&P500. And as the S&P500 falls, so too will the rest of the world Stock Markets. So it doesn't look peachy. Unless Apple quickly releases their new iPanel product and it revolutionises TV like it did with MP3 players and mobile phones, there's very little hope of prosperity here. Even if that does happen, I fear it will be short lived though.

So what can we do?

I never give financial advice, but in my opinion, you're playing with fire if you have positions in the Stock Market (even if you think your big Blue Chip company is super strong). In 2008 we saw at least 5 of the biggest banks in the US go under and when the eventual crisis unfolds around 2014-2017, think of 1929 on steroids. If the Internet and Google was about in 1929, that crash would have been a lot worse! So without sounding like a 1 track record, you simply can't go wrong with buying Gold and Silver bullion coins. It's in my opinion the best hedge against the greed and over-leverage of the financial puppeteers. I've attached a little overview of Apple below.

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