In this Stock Market Outlook 2023 blog, I will explain the reason behind the fall of the stock market and what can you expect from 2023, And how you can make money during the recession.
Introduction of Stock Market Outlook 2023
I want to tell you how you can take advantage of the 2023 recession. So next year we’re going to see the bottom of the stock market crash and the crypto crash.
So the concept it’s very simple it’s called disaster capitalism when stocks and cryptos crash that is the perfect time to buy you buy low and you sell High.
So you know how people say that you cannot time the market so that’s what the rich people tell the poor people to keep them poor. In February 2021.
Bitcoin falls almost 70 % and more to go. I called the top of the stock market and we are now in a bear market.
So do you know how I predicted this it’s because in this country in the United States of America we have central planning? If you do not understand that then you need to wake up.
So do you know what the definition of central planning is, it is an economic system in which decisions are made by a central Authority rather than Market participants.
So let me ask you a sincere question who dictates the direction of the economy the debt Market the stock market the housing market you can throw in the cryptocurrency markets?
It’s a Federal Reserve with their monetary policy, they decide for us, and They run the show. If you know what they’re gonna do, Then how could you not be able to time the markets?
Fortunately, the Federal Reserve is very predictable it’s like a Cheesy movie where you know how the story unfolds.
Federal funds’ effective rate and Stock price
Now I want you to take a look at this graph.
This is so important because this is what the Federal Reserve is going to do in 2023 and this is how the stock market reacts.
History shows that after stage three of the FED pivots which is when they start cutting interest rates the stock market continues to fall.
So the crypto Market mimics the NASDAQ. So I expect similar ramifications on cryptos but take a look at this. So if you notice so take a look at what’s different this time.
The stock market is going down leading up to stage three of the FED pivots therefore you will have to recalibrate your expectations for this difference which we’re going to get into more.
So let’s talk about this graph and what history teaches us. The Federal Reserve has been raising interest rates by 0.75 percent at each one of its meetings so 0.75 that’s a lot.
Sooner or later the Federal Reserve will have to slow down and that’s slow down it is expected to occur on December 14th. so that would be the start of stage one of the FED pivot which is smaller interest rate increases.
I want to bring this up so there’s no confusion when I explain the FED pivot I break it up into three stages.
The first stage is a Slowdown (Stock Market Outlook 2023) :
So I do this to map out the timeline. So you know where we are in the sequence of events so it’s just easier to explain it that way as you know the Federal Reserve cannot continue raising interest rates forever the Federal Reserve is expected to stop raising interest rates in early 2023.
The stage second is the pause (Stock Market Outlook 2023) :
When they stop raising interest rates and take a pause that will be the start of stage two of the FED pivot. So the pause is expected to last for a few months and then it’s just going to be a matter of time until the Federal Reserve starts cutting interest rates.
The third Stage is the interest rate cuts (Stock Market Outlook 2023) :
Again when they start cutting interest rates we will be entering stage three. So that’s stage three of the FED pivots that is expected to occur in the second half of 2023. They’re going to start cutting interest rates when something breaks or for fiscal reasons when stage three of the FED pivot occurs history shows that the stock market will continue to go down.
So let me explain this the Federal Reserve is only going to cut interest rates if the economy is suffering or if Capital markets become dysfunctional let’s just say illiquidity in the debt Market the stock market crashes Etc so in other words something is going to break and the Federal Reserve will have a response and try to rescue the day by cutting interest rates however because of the lag effect the interest rate Cuts will not save the situation immediately it’s going to take some time, therefore, the economic situation will continue to degrade and the stock market will continue to go down as the Federal Reserve is cutting interest rates so that’s what history shows and that is what the graph what I just showed you that’s what that shows too therefore historically the bottom will be after stage three of the FED pivot.
It’s not going to be before not at the start but after when they start cutting interest rates. On November 30th Jerome Powell chair of the Federal Reserve said, they do not intend to crash the capital markets and he believes that we can still avoid a recession.
So it’s up to you whether you want to believe that or not now I want you to be aware of this. So you know how inflation started shooting up and it caught the Federal Reserve off guard so the same thing is expected to happen with unemployment in 2023.
In November the U.S. economy added 2,63,000 jobs. However, Bank of America is predicting that the U.S. economy will be losing 1,75,000 jobs a month around March.
So you want to know how to make money off this situation and it’s very straightforward as I said it’s just a simple case of disaster capitalism. It’s not my fault that the economic situation is going to degrade, it’s not your fault either.
And if you or I make money off the situation because we’re smart enough to anticipate this. Then what is wrong with that, now I’ll donate some money to charity, and I’ll plant some trees. And I encourage you to do the same thing.
So here’s what I’m doing personally this is a piece of my playbook so I’ve built up my Reserve funds to strike when the opportunity presents itself when it’s optimal.
How to make money during the recession (Stock Market Outlook 2023) :
So right now I have money on standby ready to go when economic conditions get worse. but I’m not going to continue hoarding cash beyond that point to unhealthy levels with any surplus money.
I am accumulating various stocks and assets and silver is one of them. So I’m going to tell you why it is the perfect storm for silver in a good way it’s the absolute perfect setup.
I’m going to give you five reasons why?
- Reason number one is that it is a store of value silver is a store of value it is a hedge against monetary inflation that means that the Federal Reserve and central banks continue printing money they go back to the old ways they’re just printing money like crazy then silver is going to be a very good way to protect yourself.
- Reason number two is that silver is powering the Green Revolution so whether you like it or not whether you agree or disagree we are going green this means more electric vehicles and more solar panels and guess what you need to make EVs and solar panels that requires silver so if you didn’t know silver is the best natural conductor of electricity and heat it has the highest thermal and electrical conductivity so this is not a science lesson so all you need to know is that demand for solar panels and electric vehicles is accelerating and that will continue to increase for the next decade that means that we’re going to need more silver your average internal combustion engine has about 25 grams of silver your average battery electric vehicle has about 50 grams of silver so we’re talking about double Additionally you need silver to build out charging stations so if you want to talk solar an average solar panel has about 20 grams of silver solar demand is expected to continue growing at 30 plus percent each year so we’re going to need more silver.
- Reason number three and a lot of people don’t know this is that silver has widespread industrial applications and demand is rising you need silver in electronics and batteries semiconductors and alloys countries are investing in 5G infrastructure and that infrastructure requires silver our electronics are getting smarter and we need more smart chips so, for example, autonomous driving will lead to higher vehicle complexity and that will require more silver consumption.
- Reason number four is that we are witnessing growing demands for silver however the supply of silver production will not keep up so take a look at the supply-demand in Balance this is coming from Metals Focus this year in 2022 silver Supply will grow by two percent this is clearly not keeping up with silver demands growing at 16 percent so the majority of that easy to mine silver that’s gone it’s been depleted silver is not primarily produced as a byproduct of non-precious metals mine silver production will finish off the year increased by one percent this increase in output is coming from Mexico however it’s being offset by declining silver production in Peru China and Russia so listen to the investing thesis it’s very simple there’s going to be more demand than there is Supply and when that happens the price is going to go up, in addition, getting to.
- Reason number five the US dollar will weaken I said this before it is inevitable this will give an additional boost to most Commodities including silver the dollar will weaken because sooner or later so most likely in 2023 the Federal Reserve will go back to cutting interest rates and quantitative easing and I’ll tell you this do you know what the icing on the cake is it’s that the price of silver has still not skyrocketed yet so here’s a 20-year chart of the price of silver it’s currently a 23 an ounce at these prices.
Conclusion of Stock Market Outlook 2023 :
I am accumulating silver for the long term so I’m looking to sell my silver when people realize that we have a problematic Supply demand deficit when the dollar weakens and it’s the perfect storm the perfect time to sell.
I just want to say this I’m not selling anything I’m not trying to I’m not getting anything out of this.
I’m going to say this part for your benefit, so just so you know if you want to invest in silver. You don’t need to buy the actual physical silver you can.
But you don’t need to so you can buy it you can buy silver on the stock market just like you buy a stock. So I’m personally because this is why I’m saying I’m personally doing this I’m buying the silver ETF.
Its ticker symbol is SLV I’m not trying to manipulate the price of SLV it’s a multi-billion dollar ETF and it’s silver for crying out loud so it’s for those reasons.
I believe that silver is just one of many Investments that will outperform if you like this investing thesis if you like practical down to earth style.
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