How to Recognize the Peak of the Market – Week 6

An Unstable Global Economy:

It is extremely rare for all of the cylinders of the global economy to be working together in an optimum fashion. But the current global economy is remarkably unstable.

After seven years of Quantitative Easing (QE) on an unprecedented scale, two of the central banks most involved in QE are either actively reducing QE or have announced plans to do so.

Reducing QE reduces the level of liquidity in the global economy. In turn that raises interest rates and the demand for money continues (or increases with economic growth) yet the supply of money is being reduced.

When QE has been used previously, by individual countries, it is at the point of reducing QE that failure occurs. Prudence requires you to get your investment portfolios in shape for a bumpy ride.

It is critical to remember that land is the source of all wealth. Every product that we humans consume originates with land. Not all tracts of land are equal in quality and portfolio management requires every investor to hold some cash for liquidity. But historically, long term the best investment is land.