The Dow Jones and Nasdaq indexes have been on a steady downward trend lately! The DJIA has gone Down for Six Weeks straight! Is a stock market Crash imminent?
The Federal Reserve has just finished Quantitative Easing 2 or QE2 and it looks as though they are wont to do QE3, but whether that will stop the Downward Trend is Doubtful...
I predict that the DJIA will lose Half its value by the End of the Fiscal Year. No Amount of Monetary flow from the Federal Reserve can avert the Meltdown that is occurring in the US Economy.
Few jobs are being created in the Private Sector, and the Public Sector has little choice now but to shed jobs as State budgets are squeezed by the current economic downturn. This downward spiral in employment will inevitably affect Consumer spending and cause companies to lose profit margins that are already tight.
As Corporate Earnings tank, and the money from the Federal Reserve dries up - I predict a Serious Crash that will wipe out the portfolios of many 401ks and investment bankers.
This time, however, the US Federal Government will not have the money for another Bailout, and many Investors will inevitably go Bankrupt as stocks freefall in value.
I predict sharp increases in Gold Prices and perhaps even double-digit inflation as Banks and Companies scramble to avoid Bankruptcy.
At that point, people will stop calling this a Recession and start using the term Depression to describe Economic Conditions in the USA...
