Blog : Market Overreaction + Big Backfire

by Peter Leeds on September 15th, 2015

Investor Over-reaction this Week:
The Federal Reserve will announce whether or not they will raise interest rates this week.   Either way, investors will over-react to the decision (or lack thereof).  
 
If rates remain unchanged for now, or if they are increased, the subsequent trading will go too far, whether positive or negative.  There are simply too many eyeballs on this event already.  
 
Things have set up for a reactionary stampede, rather than an appropriate re-adjustment.  If the "door" opens a crack, or doesn't, people will trample each other.
 
 
The Massive Backfire:
This will affect you and every dollar you own
 
Sanctions on Russia are backfiring, exactly as predicted.  While America tries to squeeze Russia out of Ukraine (non-NATO member), and the related Crimean peninsula, the Great Bear has been pushed into some other "beds."
 
China and Russia have conducted joint military exercises in the South China Sea.  That is the region America is trying to influence, perhaps in support of Japan, but has yet to admit a loss of military and political influence in the region.
 
In fact, China has recently rubbed the Alaskan coast with war ships to demonstrate their reach.  Expect such actions to be in direct proportion to US actions in the South China Sea.  Tit-for-Tat in the greatest ego show on the earth.
 
Meanwhile, Russia has signed billions of dollars in oil deals with China.  They did not conduct these transactions in US dollars (the World's Reserve Currency) as they might have years ago.  The loss of reserve currency status has been rapidly advanced by the sanctions on Russia, and I explain exactly how this will affect you in this video.
 
The Shanghai Cooperation Organization (SCO), which was developed with one of its intentions to be exclusion of the USA, now involves Russia, China, India, Pakistan, Kazakhstan, Mongolia, Afghanistan, Tajikistan, Uzbekistan, and Iran.
 
Speaking of Iran, along with China they are building a natural gas pipeline to Pakistan.  Once completed, resource starved Pakistan (a nuclear power) will be potentially beholden to Iran and China (another nuclear power, with Intercontinental strike capabilities).  Russia (nuclear powerhouse) will also be closely tied to each of these nations.
 
The point is that America does not have military muscle to impose its will overseas any more.  That is why you will see more events like Russian warships in the Mediterranean, and the delivery of highly-sophisticated T-72 Russian battle tanks and troops to Syria.  
 
American influence is decreasing rapidly, and sanctions against Russia have hastened the issue.  The Syrian flashpoint is quickly becoming a new Vietnam-style proxy war.  Actually, it is more like the Korean war, and it will be Russian hardware clashing with American hardware above Bashir al Assad's head.
 
All of these events are what make today's stock pick a mandatory investment for all investors.
 

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