Following the previous article, let's talk about the second set of key data, called the 140-year cycle curse. 🧐So what does this data say? Why is it a 140-year cycle? In fact, it refers to the period since the prototype of the Dow Jones Index withdrew in 1884. According to statistics, the three historic crashes of the Dow Jones Index in history all occurred during the Republican term. 1️⃣The first major crash was after the Republican leader Hoover took office in 1928. The Dow Jones index fell 41 points from 381 points, a drop of 89%, for 3 years and 1 month. 2️⃣The second major crash of the Dow Jones Index was in 1973, when Republican leader Nixon was in power. The S&P 500 index fell from 120 points to 60 points. This time it took 20 months to halve. 3️⃣The third major crash occurred during George W. Bush's term in 2008, when the Dow Jones Index fell from 14,198 points to 6,547 points, a drop of 54%. This process lasted 17 months.
After Trump was re-elected as president, he faced the following indicators: the average price-to-earnings ratio of the S&P 500 was as high as 41 times, which was at a historical peak. This valuation level far exceeded the 25.6 times on the eve of the Great Depression in 1929, and even exceeded the 21.2 times on the eve of the 2008 financial crisis. What is even more dangerous is that the current Buffett indicator, that is, the ratio of the total market value of US stocks to GDP, has exceeded 200%, while this number was 159% before the crash in 1929 and 135% before the crash in 2007. As a Republican leader, Trump is unlikely to escape the cycle curse this time, which concludes the second set of key data.
Let's look at the third set of key data. That is the so-called 3-fold recession probability. What kind of data is this? This is a set of data comparing the results of the Democratic and Republican administrations. According to the latest research results of the University of Pennsylvania, since 1900, during the term of the Republican president, the average annual GDP growth rate is 1.2 percentage points lower than that of the Democratic president, and the probability of economic recession is 3.1 times that of the Democratic period, while the stock market volatility is 24% higher, and the highest unemployment rate can be as high as 8.3%. This is the source of the 3-fold recession probability.
So we can see if this set of data is more worthy of vigilance. The actual situation is that after Trump took office, the US economy has shown many dangerous signs. The forecast model of the Atlanta Federal Reserve shows that the GDP of the US in the first quarter of 2025 may drop directly to -2.4%, and the University of Michigan's consumer confidence index has also dropped from 71 in January to the lowest 64, a 15-month low. In addition, the default rate of credit cards in the United States has exceeded 6.2%, which is higher than the level before the financial crisis.
Of course, we have also seen that after Trump announced his success in the election. The US stock market has seen a big rise. I think this can be understood as a divergent rise, because this situation is not new. Before the bursting of the Internet bubble in 2000 and before the formal occurrence of the subprime mortgage crisis in 2007, there had been divergent rises📈. In Chinese terms🇨🇳, it may be a kind of last gasp😇. Of course, we have to admit that this history may not simply repeat itself, but we must believe that there will always be the same laws at work. Now, when the tariff war is reignited, immigration policies are tightened, and tax cuts are stimulating the virtualization of stimulus, these policy formulas from the Great Depression have come together again, that is, the curse of the 140-year cycle has coincided with the historical peak of US stock valuations, and the 3-fold probability of a recession has collided with the continuous decline in economic data. Does that mean that the US stock market is really at risk of a sharp drop now❔❔❔
This alarm has been sounded❗️
Maybe you don't believe me, but some people already believe me. What's more, these words are not analyzed by me, but by those American 🇺🇸authoritative institutions, investors and experts. So this is why Chinese assets have skyrocketed against the trend, and this is why Americans are now rushing to hoard gold. The core reason is three words, learn to hedge ❗️❗️
Some people may say that I have been shorting the US stock market recently🇺🇸. Is it interesting to do this? I tell you that of course it is interesting. The confidence of the capital market and the flow of funds are two sides of the same coin. Neither side works well. So why has the West been shorting us for several years, and they are all spending money to do so? I am now voluntarily bullish on my own country🇨🇳 and bearish on the United States🇺🇸. I firmly believe that the East rises and the West falls. Isn’t it worth a thumbs up👍? Friends, don’t you think so😎😎😎
