With stock market indices hitting new all-time highs almost daily throughout 2017, and the economy (average 2% GDP growth since the Great Recession of 2008) performing not much above stall speed, a severe stock market crash and a major recession are in the cards. How did we get there, we ask ourselves?
In the past nine years, major Central Banks across the world have created over 15 trillion dollars of new money, mostly through purchases of government bonds. These money printing schemes and bond purchases programs have created the “mother” of all bubbles. It doesn’t take a P.H.D. to figure out that this phenomenon is about to blow up. Just re-visiting the 2000 Dot-com and 2007 Housing stock market bubble tops, represents almost a 50% decline in the S&P 500 index! This is the true definition of a bubble.
What will be the trigger(s) to burst this bubble?
The false prosperity of debt? The crisis in the Middle East? A war with North Korea? A worldwide credit crisis, starting with China? Income inequality? Another Housing Bubble? A shortage of commodities? A banking (liquidity) crisis? Implementation of tariffs for America’s protectionism programs? A steady rise in interest rates? Emerging countries stopping buying our debt? The collapse of the U.S dollar, the current world reserve currency?
A stock market crash of epic proportion is imminent. More than ever now is the time to get out of stocks and invest into safe heavens. It all starts with Foreign Real Estate and we know, at Remax, how to help you make the best investment in Costa Rica. The ROI when buying a beach property varies from 4% to 8% and will give you a security and return when the market will be at its lowest. It will also give you the opportunity to escape your daily life and come to the tropics to enjoy your property when not rented.
As has been said over and over, never put all of your eggs in the same basket.
Isabelle Emond, Broker/Owner
Special thanks to my good friend Marcus. Very knowledgeable and always educating me on the economy! Graphic source: Money magazine, Jan-Feb 2018 issue. Showing the bull market periods from 1945 until today.