On the Markets In 2024. Staying Ahead of the Curve.

From Greg M

On the Markets In 2024. Staying Ahead of the Curve.

By Gregory Mannarino TradersChoice.net

To make the most accurate projections as to where the stock market, along with gold, silver, other commodities, as well as cryptocurrencies will most likely go in 2024, we must first and foremost consider what is driving the current price action.

No asset/asset class moves independently, or by itself. The price action of any asset, and even the overall market itself, is dependent on what is driving it.

Cash moves through the markets in relatively predictable patterns depending on action in the world’s debt market. In other words, the debt market sets the base price of essentially every other asset/asset class/the stock market itself. Therefore, if the price action of say the stock market itself as an example, derives value from action in the debt market, then the stock market itself can be considered a derivative. If the value of the stock market derives its value from the debt market, (an underlying asset), it becomes a derivative, as it derives value from something else.

Economics 101 would dictate that it is the forces of supply and demand which set prices, and perhaps in times past this theory may have had merit. However, today the role in which the forces of supply and demand dictate price action is nearly nonexistent. Then there is the “human element.” There are two distinct “human elements” which must be considered when attempting to make a prediction regarding price action. These two human elements are FEAR and GREED. Of these two human elements, fear is stronger than greed. Have you ever wondered why prices tend to fall much faster than when they rise? That is fear. Fear can turn into panic selling, and when panic sets in prices can fall VERY rapidly as throngs of sellers all run for the door simultaneously.

Since the stock market crash/financial crisis of 2008, which was when the system itself died and is currently on life support, this has led to the development of a new system. This new system is now totally dependent upon vast amounts of easy money being pumped into it via world central banks. This mechanism, which began with quantitative easing one and has subsequently continued/evolved unabated ever since under various monikers. The foundation of this new system is central banks purchasing massive amounts of debt with cash which they create out of thin air. These vast debt purchases, which continue even today, artificially suppress bond yields. This scheme is constructed to deliberately open a doorway/drive cash to into risk assets/the stock market.

Artificially suppressed rates are also responsible for directly inflating housing bubbles, or in today’s situation, a super bubble. The Federal Reserve has also been buying vast amounts of mortgage-backed securities providing an engineered demand for mortgages- further exacerbating the underling price action distortions.

The mechanism of suppressed rates going on now for 15 years, is directly responsible for not only inflating the biggest stock market and real estate bubbles of all time, but also creating price action distortions across the entire spectrum of asset classes. Today there is NO REAL PRICE DISCOVERY of any asset/asset class/market via central banks keeping rates falsely suppressed. Central banks vast purchases of debt and mortgage-backed securities has created a financial Frankenstein situation where today the people of the world are forced to exist under a debt HYPERBUBBLE unlike anything which has ever been seen in the history of the world. A debt hyperbubble which will be greatly increased in 2024.

For any transaction to take place there needs to be a buyer and a seller, however, today there is also a third player involved in every single transaction which takes place. By central banks NOT ALLOWING the market itself to determine fair value for debt, the entire order of a so called “free market” becomes disturbed. Moreover, with the Federal Reserve along with other central banks working in concert to artificially suppress rates, these institutions then become A THIRD PLAYER in every single transaction you make! Whether you go to the store to buy a pack of chewing gum, or purchase a house, a central bank is now directly involved in the transaction. How a central bank becomes a third player in every transaction you make goes far beyond the obvious, in that IT IS THEIR CURRENCY which you are using.

By central banks artificially keeping rates suppressed, using cash which they print/add to a digital screen out of nothing, this mechanism creates inflation BY DESIGN.

(Just in case you are not familiar with my work or how the system itself works, ANY central bank’s power resides in only one thing- their ability to create inflation or to inflate). Have you ever wondered why it is that the Federal Reserve has a “target” inflation rate?

In 2024 you can expect that central banks are going to cut rates, therefore keeping the doorway open for cash to make its way into the stock market. Tech stocks should benefit the most in a falling rate environment. Increasing war will also drive cash into the perceived safety of debt, and therefore push more cash into stocks. Massive increases in “government” spending should also drive cash into the stock market.

Central banks cutting rates will further exacerbate the prices of real estate and housing. Regarding CRE (commercial real estate), I expect those issues to fester, but not become a major issue until at least 2025.

In 2024 expect that the prices of Gold and Silver will remain suppressed.

In 2024 expect volatility in commodity prices overall.

In 2024 expect HIGH volatility in the price action of cryptocurrencies.