The 2008 crash was not only seen long in advance but its most important because it marked the final period of the 50 year financial cycle which began in January 1972. Periods in 50 years of financial markets are almost ordained from the heavens and marked in the Bible in many instances such as 7 rich years and 7 lean years. Jubilee years are 49 years and after 49 the system of money and exchange reverts to a different period inside a new system. Markets and central bankers can’t fight the system since its perfection as a prediction is perfect since establishment of the BOE as the first central bank in 1694. What we’ve seen from central bankers since 2008 is disaster policy after disaster policy against zero results.
From 2008 and enter of the Last Quadrant of 4 in a 50 year period, current Quadrant goes from 2008 to Maximum 12 1/2 years. This places the end period of this cycle at 2020. As markets draw near to 2020, more danger exists to the final crash. Markets begin and end in crashes then the system reverts to another period. Market Volatility as well is almost ordained based on the cycle period. Current volatility is the lowest in 50 years and again warns of danger because prices lack direction and policy purpose.
While the next crash is almost ordained by the number 50 and its miraculous prediction, Quadrant 1 in the new period always marks great prosperity and lasts as much as 12 1/2 years. But markets and prosperity become overbought so Quadrant 2 historically marks corrections for as much as 12 1/2 years. What “as much as 12 1/2 years ” means is the number 7 and 10 are vital to measure as a guide the last point at 12 1/2. The current period and year is in the severe danger zone. The positive aspect to the final period is prosperity lies ahead for the world and markets but the type of trade able market is unknown.
How markets arrive at crashes and periods is government debt is unable to sustain itself.
Respected Kit Jukes at SG highlights a BIS paper and confirms my correlation numbers. As Yields and interest rates drop, debt rises. As Debt rises further then the debt service cost also rise. Main point and quantified by the BIS since the 1980’s is GDP suffers as Debt rises. Yellen wants higher Fed Funds but is not willing to relieve the debt. Yellen deserves the overall award for Quadrant 4 status because the raise if seen is suspect.
Why the sudden interest in raise? CPI at 0.6 equals Fed Funds at 0.6.
EUR/USD. Currently trades around its vital break point at 1.0669. Shorts must break 1.0669. The problem in 1.0669 is 1.0596 lies below but fortunately for shorts at a stasis point. Sell points today are located at 1.0726, 1.0737. Much daylight exists above 1.0737 at 1.0753 and top of today’s channel at 1.0770.
Shorts must break 1.0696, 1.0674, 1.0669, then lower targets become 1.0630’s. Further to bottoms is from 1.0505 to 1.0573 will be roughest supports.