Boeing back in the air

The markets couldn't totally make up their mind today, though they ended lower with the news that New York would once again be closing schools.
The big news of the day came from the government, where the Federal Aviation Administration finally lifted its ban on Boeing's 737 MX Jet, which had had two fatal crashes before the coronavirus shutdown hit the markets.

That caused Boeing stock to soar higher early in the day; however by day's end that sunk back down into the red.

Still, it is critical news for the longterm health of Boeing, a company that has been taking a beating for a year or so now.
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What No One Is Telling You About the US Election

Dear Reader,

The media frenzy around the US elections is beginning to subside.
In E
urope at least, the two players have clear roles: Joe Biden is seen as a hero come to deal with climate change, Obamacare, and the Corona Crisis. Donald Trump is the violent hooligan whose only remaining job is to leave the White House.

However, both campaigns completely ignored one of the
problems facing the US today—and they did not do it by accident. The media helped them with this charade. American debt is growing and growing; where will it end, and how can you prepare yourself?

Not a crash

I am not here to warn you about some upcoming crash. Still, let's review what the media has been sweeping under the rug for months. When the new administration takes over on January 20th, the US will have accumulated 28 trillion dollars (or possibly more) in debt. That's a new record.

I do not blame Donald Trump for this. The US government, with the exception of a few years in the late 40s and 50s, has been accumulating debt for 90 years (Bill Clinton was able to balance the national budget a few times, but many economists question whether this was useful in the long run). Debt growth can almost be seen as a law of nature.

Barack Obama handed over a debt of about 20 trillion dollars. As with all debt systems, the (absolute) speed of accumulation will continue to increase. By the next presidential election, the US is likely to be more than 35 trillion dollars in debt. Eventually, the debt system will have to be called into question—at the latest, when interest rates can't be lowered anymore in order to finance new debt.

The strength of the currency

Right now, the US is still able to afford more debt, essentially by resolution. The Fed buys up bonds; the dollar continues to be the global currency. However, experience shows that it will become more and more difficult for the dollar to remain a leading currency if its buying power decreases. The dollar has lost more than 90% of its value compared to gold in the past decades (depending on the time period being analyzed).

In light of the very low interest rates that we in the Eurozone see now and will continue to see for a long time, the question becomes: How long can these currencies continue to demonstrate their "strength"? The US elections—to get back to the topic at hand—will have little influence on this dynamic.
Wealth protection is important even now, after the election is over. No one knows when this debt bubble will pop. I suggest you stay on the safe side.

Assets will protect you in the long run, and stocks are your first line of defense. Choose very strong companies that can dominate their markets regardless of the political environment.


I wish you all the best.

Sincerely,

Dr. Gregor Bauer
Leveraged trading in foreign currency or off-exchange products on margin carries significant risk and may not be suitable for all investors. We advise you to carefully consider whether trading is appropriate for you based on your personal circumstances. You may lose more than you invest. We recommend that you seek independent advice and ensure you fully understand the risks involved before trading. The information on this website is intended as educational in nature and we do not recommend that you buy or sell any specific financial instrument.
 
 
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