Crash Pushback…

When is the Economic and Stock Market Crash going to happen? It all depends, at the moment the main thing that is occurring is that the severity index in increasing for the eventual crash.

The warnings continue, P/E ratios are sky high, technical stock market Relative Strength indicators are very elevated, government debt keeps increasing, with 38 trillion in range.

And yet the indicator values just keep rising as the dissenters talk louder.

For me, one just has to look at some of the base factors that are driving things. Our fundamental model, what we call the Climate Tech Model, due to a climate base in our thinking, uses four data streams to analyze the demand basics, 1) M-2 Money Supply, 2) the Fed Balance Sheet, 3) GDP, and 4) Fiscal Debt levels. What we see is that since December 1, 2024, when the world first grappled with the effect of the election results, we see M-2 up 4.7%, Fed Balance sheet up 2.1 %, GDP up 2.8 %, and Fiscal Debt levels up 3.2 %, which summed up means our composite Monetary Multiplier Index is up 3.2 %.

The biggest underlying factors in this picture are, money supply keeps growing, Fed QT has stopped,, GDP is getting the AI Buildout push, and there seems to be a complete collapse of the “cut the deficit, drain the swamp, live on Tariffs” Deficit talk stream from Trump.

The sad story is that Deficits feed the beast, and with employment declines feeding lower interest rates, this story is being pushed down the road, and the potential crash intensity when it happens only increasing. So, timing of a crash is waiting for a long bond interest rate signal. Treasury Secretary Bessent has a lot of tricks in his bag, and we can only wait for the time the bag is empty. We all need to be ready to do something drastic at that point.