February 21, 2020: Released Jointly by Matheny Enterprises and The Technical Traders LTD.
Have you been following our research over the past 60+ days?
We have been warning that the Capital Shift process that was driving investments into the US markets (primarily into the US Technology Sector) was a carry-over process from 2019 and continued into early 2020. The risks of the Corona virus “Black Swan” event were being ignored as global investors continued to believe the event would be short lived and would only temporarily dent global economies.
As we have been warning all of our members, this Corona virus event contains a far bigger risk to, as a true BLACK SWAN event, disrupt supply, manufacturing, finance, central banks, consumer spending, and much more. In fact, this makes the 2009 US Credit Crisis pale in comparison.
Think for a minute about how the global markets work. Currently, over 80% of the products and essential goods we purchase are manufactured overseas (China/Asia and other locations). When this virus begins to spread in an uncontrolled manner, the nations that are hardest hit will attempt to contain the virus by locking down (quarantining) large segments of their society. This disrupts not only the supply side of the global economy, but it also disrupts consumer spending, banking/finance and other aspects of the economy.
Once these quarantine events become common, then we have to start to understand consumer psychology and attempt to understand true risks to the global markets. In our most current research article related to this subject, we attempted to share our thoughts related to the potential destruction of the Technology sector and highlighted the scope of this virus event across the global economy (https://www.thetechnicaltraders.com/is-the-technology-sector-setting-up-for-a-crash-part-ii ).
Pay very close attention to the scope and scale of the total global economy by nation from the article linked above. As we've highlighted in previous research posts, central banks can attempt to address unusual “blips” in economic output/production by supporting various sectors of their economy or by using reserves to make up the difference. But what happens when large portions of the global economy experience 15% to 45%+ declines in economic output and consumer spending over a longer period of time (6 to 18+ months – or possibly 2 to 5+ years)? What happens if many of these global economies had recently GORGED themselves on cheap US Dollar debt in order to fund large scale infrastructure, manufacturing and other state/corporate related projects?
An extended decrease in economic output, consumer spending, corporate profits, tax revenue and general economic activity will setup a domino-like process where loans will default, consumers will default, corporations will default, reserves will collapse, assets will collapse, metals will skyrocket and essential goods (food, medical, personal items) will skyrocket.
We've hear stories of how gangs are targeting Toilet Paper in Hong Kong. Once food supplies run short, other types of chaos may soon follow. This is a true BLACK SWAN event – it just depends on how well prepared these nations are to address the process of this event.
These types of events are why you need someone like Matheny Enterprises and TheTechnicalTraders.com to assist you in understanding the reality and scope of future events. Take a look at our research posts and spend some time reviewing the content we've published over the past 60+ days. We've been warning of this event for quite a few months – we hope you were paying attention?
February 12, 2020: https://www.thetechnicaltraders.com/shipping-rates-plunge-commodities-and-stocks-may-follow
February 10, 2020: https://www.thetechnicaltraders.com/stock-market-sector-rotation-should-peak-within-60-days-part-ii
February 5, 2020: https://www.thetechnicaltraders.com/corona-virus-and-manufacturing-shutdowns-will-affect-companies
January 30, 2020 : https://www.thetechnicaltraders.com/silver-prepares-for-next-leg-higher
January 29, 2020: https://www.thetechnicaltraders.com/are-we-setting-up-for-a-waterfall-selloff
If you have not already prepared for this event, don't wait for the markets to fall 20% or 30%+. It is very likely that global Central Banks will be tested and every major economy will come under pressure. This is supply and demand side contraction event. In order to contain this virus, nations will have to shut down commerce, economies and communities in order to prevent the spread of this virus. This, in turn, will create an extended contraction in the global markets that hardly anyone has prepared for.
Learn how our services can help you stay aware of these events and help to protect your family and your wealth.