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We currently live in a “Disinformation Bubble.”  People get their false “facts” from false sources and then strongly hold onto them as a sort of anchor.  But anchors are heavy and we are already drowning.

Before I start my rant, I’d like to repeat what I stated in our prior blog: this is not a political rant, it is just a rant.  It is my responsibility to see what is actually, factually, happening in the financial world using minimal prejudice; this is because our clients deserve truth and no less than truth.

For almost two decades now, I have been predicting that the final years of this current decade would evolve into the biggest and most profitable investing BUBBLE in history.  (Now, what follows from here will sound counter intuitive.)  This parabolic stock market would require someone to come along, a President, that would “issue decrees” to deregulate all financial instruments and that would eliminate all of the independent watchdogs that normally stop corporations from committing fraud and even international bribery.  The parabolic bull market that I see coming would require a libertarian type of investor enthusiasm that can only result from literally all restraints being removed from private corporate business.  This predicted scenario was speedily accomplished by President Trump during his first 4 weeks back in power, as his first order of business, and all regulation is now, already, removed from business. 

So, your investment account is now free to go crazy high over the coming few years because nothing can stop unrestrained corporate growth.  Owning stock “shares” gives one the ability to “share” in the profits of these now unrestrained corporations and everyone will make piles of money… until they don’t.  Turns out that there is also an eventual price to pay.  Like a powerful arm throwing a baseball straight up in the air, it’s eventually gonna’ briefly pause and then come back down at an equally fast pace.  Right now, the ball is still going up.

U.S. citizens have literally been promised a new “Golden Age.”  It’s likely that we, instead, get a new “Gilded Age.” 

So, President Trump’s very first order of business was to deregulate (set free) the entire financial and business sectors and to remove fraud protections and to fire fraud and waste watchdogs.  Any Federal employee that investigates financial fraud has been fired.  Already fired.  Any agency that investigates fraud, such as the Consumer Financial Protection Agency, has been totally shut down.  Departments at the FBI that investigate financial fraud have all been closed down.  Non-political Inspectors General at all sections of the government that investigate for fraud and waste have ALL been fired.  IRS tax collection employees, the ones that look for fraud, have been fired with many more on the way to being fired.  The lead person in charge of stopping the giving and taking of international financial bribes, a Republican, was fired.  On February 18th, President Trump issued an Executive Order taking powers away from the independent Federal Reserve in controlling bank holdings and he put the control solely under Trump’s own command; this isn’t legal, but that no longer matters.  On February 19th, he issued an Executive Order that allows him to personally control the consumer-protective functions of The Commodities Futures Trading Commission, The Federal Housing Financial Board and the Securities Exchange Commission (SEC).  Importantly, he is also lowering corporate tax levels which can only further increase corporate profits (and the investing shareholder’s profits).  This has all taken place in a span of only 4 weeks.  And yes, this has all been fact-checked and no, I’m not a “liberal”… I manage investment accounts from a neutral stance and again, I MUST understand what is actually, factually going on in the financial world with as few biases as possible. 

Folks, what I do know is that:

1. It is easy to break things, and things are already breaking.
2. For the next few years, it may be party time in corporate (and investing) America… but this ultimately isn’t going to end well for most investors (or for a “U.S. Sovereign Wealth Fund”).

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As I stated in my prior blog, to understand financial bubbles and the deregulation and fraud that helps to create them, I would suggest that everyone watch the movie (extremely well done and with a star-studded cast):  The Big Short 

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Financial deregulation always leads to hidden fraud & hidden danger and a profitable market bubble.  Market bubbles always end in a crash.  Market crashes offer highly discounted assets, but investors are always too fearful to get near them.  Not to sound callus because I’m willing to help anyone that wants help… but for investors, money can be made during the entire process.

Below, the ORANGE line shows roughly where we are today… the BLUE line shows the route of where I currently believe we are headed if we do repeat the Dot.com bubble and subsequent bust.  Of course, the new (orange) AI spike would be projected further to the right on this chart.  So potentially, you are looking at enormous investor profit potential.  (Chart source unknown.)

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If I am correct, we are already in the third and perhaps the last of three giant technology bubbles:

1. The Roaring 1920’s, named after the roaring stock market that was centered around the newly created radio and moving/talking pictures.  This giant technology BUBBLE ended in the Crash of 1929 (actually a slow-motion bear market).  The crash was followed by The Great Depression where many people didn’t know where their next meal was going to come from.  The crash was created by financial deregulation and the firing of watchdogs.  In subsequent years, massive fraud was discovered and regulation was placed back on markets.
2. The Dot.com BUBBLE of the second half of the 1990’s was centered around the creation of the Internet.  During just the final 6 months of 1999, e-commerce internet stocks went up by 400%.  Please note that a simple 100% gain doubles your money.  This Dot.com period was a giant bubble that was created by financial deregulation and the firing of watchdogs.  It ended in the Dot.com (slow motion) crash that lasted for two years.  Again, massive fraud was later discovered and regulation was placed back on markets.
3. And today, and if I am correct:  My prediction is that we have now already entered the beginning stages of the third technology bubble… the AI and Innovative Technology BUBBLE.  We likely have somewhere around 4 years remaining to this parabolic stock bull market that might form into a truly gigantic BUBBLE… before popping into a 1929 or 2000 style slow motion crash.  [I will be watching every single day for impending signs of a coming pop.]  Is there anything that could alter my thesis?  Yes, too high of inflation from Trump’s tariffs and by the deportation of millions of eager, but possibly illegal, workers… AND by the possibility that Trump makes a MAJOR mistake since he so often acts without reasoning out any of the potential negative consequences of his impulsive actions.  I now subscribe to a 2x-daily service that searches for every possible action from the White House or Congress that might affect investments (at $2500 per year).  MarketCycle’s job is to stay on top of this at all times, to be ever-watchful, and to respond appropriately.  Remember that 100% of my own money is invested exactly like my client’s money and that gives me great incentive to stay on top of everything, 24/7.

SUMMARY:  In my opinion and from a purely financial perspective, there will be an incredible, once in a lifetime opportunity to make money during the coming parabolic run-up as well as during the subsequent slow-motion crash.  And at the end, good assets will be offered for 10-cents on the dollar.

Is this good news?  Is it all bad news??  It just is what it is… almost as some sort of strange and fickle Manifest Destiny.  Mark Twain was correct when he said:  “Life is just one damned thing after another.”

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Thanks for reading!

MarketCycle Wealth Management is in the business of navigating your investment account through rough waters.  My personal money is fully invested exactly like my clients, which is rare in this industry.  We work hard to earn our keep.  The process is affordable and easy.  There is a contact tab at the top of our website.  I’ve had numerous blog subscribers tell me: “I have been reading your monthly postings for 5 years and now I am finally ready to become a client.”  

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