Dow Jones hits a New All Time High of $19,000, but Can it Last?steemCreated with Sketch.

in news •  3 years ago  (edited)

Apparently, Trump's promises of deregulation are contributing to a rally in US markets as the Dow Jones Industrial Average reached a new high today.

This is good news I guess, but it doesn't tell the whole story. What has inflated the markets as much as anything is quantitative easing, bail-outs, and interest rates near zero for the last few years. The Dow could climb much higher but what goes up will come crashing down when the derivatives bubble bursts.

As you can see by studying the dow chart, it has basically been trending upwards for it's entire history. The notable exceptions are from the 2001 dotcom bubble and the 2008 housing bubble.

Those two bubbles were pretty catastrophic when they popped. During the 2008 housing crises, we were told that we had to bail out these banks because they were "too big to fail" meaning that we had to bail them out to avoid a domino effect leading to a crash.

Throwing money at the problem can only be done for so long. At some point hyper inflation will become a problem. Who knows, the dow may go up to $100,000 by the time it's all over with, but it is already so artificially pumped up that it seems it could also have a correction soon.

sources:
http://money.cnn.com/2016/11/22/investing/dow-trump-19000-stocks-alltime-highs/

https://www.google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=dow

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Nice post @richardcrill. It will very interesting to see how this plays out.

Thanks @instructor2121! That is one thing you can count on. It will be interesting to see how it plays out.

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There are no free markets so following the market is for gamblers. Trump did say he would deregulate Dodd Frank and the news has picked that up but forgot to mention he said he would bring back Glass Steagul and that is serious anti bank regulation.

deregulation will hurt the pigs.