2018

Financial, Economic and Social Mood Update (March 2, 2018) The US stock market peaked on January 26, 2018 with the Dow Jones 30 Industrials Index reaching 26,617 on that date. The market dropped 3,234 points in 14 days but it has recovered 26 percent of that initial drop since then. The overall stock market remains robust with high asset values – 91 percent of record high value. EWI analysis believes that the crash has commenced and that the next major target is Dow Jones = 18,000. In recent monthly updates I have discussed the major technological changes coming our way. These include Artificial Intelligence (AI which is projected to eliminate 70 to 80 percent of all existing jobs over the coming 2 decades) and the revolution in energy whereby nuclear fusion electricity will eventually eliminate much but not all of the need for fossil fuels such as crude oil, natural gas and coal. Crude will still be needed for things such as asphalt pavement (roads and the like) plus the production of everything plastic which includes much of the physical goods produced in the world today. Both governments and major auto manufacturing companies worldwide have committed a tremendous amount of capital and they have set real timetables for the coming transformation in transportation. These changes are already underway. Geely (the number 8 automaker in China with annual output of 1,266,456 units) owns both Volvo Cars and Volvo Truck of Sweden. Starting in the 2019 model year Volvo will only manufacture either plug-in hybrid or gasoline-hybrid engines. Brazil is the largest country in Latin America with 209 million inhabitants. 94 percent of all new motor vehicles in Brazil run on sugarcane-based ethanol (they refer to this fuel as alcohol). This burns much cleaner than either gasoline or diesel, and has resulted…

Financial, Economic and Social Mood Update (February 1, 2018) The US stock market continues to be very robust – the Dow Jones 30 Industrials Index reached a new record nominal high of 26,617 on January 26, 2018. The NASDAQ Composite Index hit a new record nominal high of 7,506 (on January 26), as did the S&P 500 Index at a level of 2,873 (also on January 26) and the Wilshire 5000 “Total Market Index” at the level of 29,761 (on January 26 as well). A major failure of Elliott Wave International has been the timing of the forecast collapse of the equity market – it must happen at some point, but the truth is that the equity market has skyrocketed in nominal value for the last decade. And when this crash does come it may manifest as a collapse of the real value of our currency as opposed to a collapse in nominal value. Here are a few examples of the increase in nominal value in the last 10 years. The Dow Jones 30 Industrials have gained 293 percent, the NASDAQ Composite has gained 470 percent, the S&P 500 Index has gained 312 percent, the Wilshire 5000 Total Market Index has gained 239 percent, and Berkshire Hathaway (a huge conglomerate holding company with equity stakes in most major industrial sectors) has gained 339 percent. The Bitcoin Investment Trust has gained a whopping 6,344 percent since its inception in July 2016. This month’s topic is the future of the automotive industry, especially with respect to AI (artificial intelligence), ride-sharing and all-electric plug-in vehicles. Since 2010 I have written and published three books about Volkswagen AG, the largest automaker in Europe and the manufacturer of my favorite automotive brand name (their core brand of VW). VW (Volkswagen) and many other carmakers with…

Financial, Economic and Social Mood Update (January 1, 2018) Happy New Year to all of you! The US stock market continues to be very robust – the Dow Jones 30 Industrials Index reached a new record nominal high of 24,876 on December 18, 2017. The NASDAQ Composite Index hit a new record nominal high of 7,004 (on December 18), as did the S&P 500 Index at a level of 2,695 (on December 18) and the Wilshire 5000 “Total Market Index” at the level of 27,870 (on December 18). My good friend and fellow William & Mary MBA Class of 1989 Edward George “Ted” Kaufman had a comment to last month’s financial update. Ted is a broker with Scott & Stringfellow in Norfolk, Virginia (a subsidiary of Branch Banking & Trust Company out of North Carolina). After reading my post about the huge historical fluctuation in foreign exchange rates, Ted said that I should say something about Bitcoin and other similar electronic cryptocurrencies. Bitcoin was introduced to the world on January 3, 2009 and began trading in April 2010 at the value of USD $0.003 per one Bitcoin. Bitcoin is a cryptocurrency, a worldwide payment system and a decentralized digital currency. Its critics claim that it is not backed by anything, but in all fairness, neither are the fiat paper currencies of the world ever since the gold standard was abandoned. Fiat paper currencies have the taxing authority of governments behind them, as well as the ability of quasi-national “central banks” to issue ever more credit out of thin air – giving us the horrendous credit inflation of the last 3 centuries. There are now many more cryptocurrencies in addition to Bitcoin such as Etherium, Ripple, Litecoin, Monero, Etherium Classic and more than 1,300 others. Some national governments such as those…