Stock Market Certainties for 2018

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Look at the global scene and the valuations of all asset classes. The free market system has been dismantled. The success of the economy depends upon the degree to which asset values increase. It really works the other way around and will eventually. Only a small percent of the world’s population has benefited from the economic recovery. So, of course the stock market should collapse. Should is not certainty. Should is based on what we can see. What we can’t see are the ongoing efforts to prevent what seems natural from taking place.

Here is the certainty. All of the world’s resources will be focused on saving asset values, especially stock prices.  All of the world’s resources have been devoted to increasing asset prices for decades. The process by which all of this works will not come to an easy end. It is way too profitable for that to happen. Who has money? Who is rich and powerful enough to dictate government power?

Suppose 2018 starts with a sell off similar to the one which occurred in 2015. The odds of that are really good. There is clearly some supply hanging over the market. Who doubts that it will be managed as best as possible with organized support? We have forced uptrends. Controlled corrections are part of the package also.

So, what happens if the supply hitting the market is too overwhelming? An emergency will be announced. Citizens will be asked to absorb any huge losses occurring. To “save the world” central banks will sop up all of the supply hitting the market. All of the world’s energy will focus on restarting forced up trends in stocks.

 

About Fantasy Free Economics

James Quillian is an independent scholar and economist.
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