Don't be a hero with your nest egg

Here’s what a global market crash looks like.

Like the crash-test videos you see in car ads, this one is happening in Super Slo-Mo. But nevertheless it’s happening and you need to act now so you’re not the dummy getting slammed with your nest egg getting scrambled.

If you recall I told you in December: “The message would be to get to the party early in ’16 and know where your coat is and have your keys in your hand, because you may have to leave the party early and quickly.”

So let’s look at the most recent events.

  • Deutsche Bank had to announce to the market Monday that it has ample liquidity, despite derivative traders sensing the creditworthiness of the bank is a huge question. I believe the market is correct every time it questions an institution.
  • Japanese equities imploded overnight slashing more than 5% value as investors jumped into bonds sending the 10-year government debt to below zero yield for the first time ever.
  • Gold prices have soared 10% in 2016, after being the scorn of 2015. Huge purchases by sovereign funds and central banks.
  • US Treasury yields have fallen all year so far, as global investors flock to “security” of US debt.

Don’t be, as I wrote here, part of the greatest wealth transfer in history. The market will move far lower over the next month or so depending on what the Fed says about its March meeting.

If Yellen & Co decides to cut the rate back to 0% in March, then we can see a pop, but the trend line is to Dow 12K.

Central bank intervention is now equivalent to pushing on a string. It’s ineffectual as a Canadian central banker said on Monday.

Setting interest rates should not be considered the primary tool responsible for shoring up the country’s financial system,  deputy bank governor Timothy Lane said.

Now is not the time to be a hero. It’s time to protect your assets and park it on the side. It’s not about growing your investments, it’s now time to preserve your assets.

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