By observing current events and analyzing the overall pattern, we project and inform about near-future geopolitical, environmental, economic, and social trends.
June, we said, was the gateway to at least six months of increasing global chaos and disruption. Life in the U.S. and abroad would be outside of what we have come to know as “normal” in the second half of 2008. Well, we’re here now. After looking closely at the month of July, we are sorry to say that it still looks that way.
In July we should expect a global stock market sell-off, much worse than anything we saw in the month of June. Crude should continue to stay supported, even though global economies are starting to buckle under the weight of the high prices. With all of this turbulence one would expect high volatility in the currency markets. However, oddly enough, all indications are that the U.S. Dollar is unusually stable. It is unclear whether markets are simply non-directional for the entire month or whether some new type of external controls are added to currency markets to stabilize them in very volatile times. Behind all of this global distress appears to be extreme geopolitical tensions. The economic distress this month alone (and it gets worse as the year goes on), could be enough to cause surges in the unemployment lines. We again urge people to prepare for the possibility of a public panic event in the next few months. A presentation can be downloaded at: http://anewstory.org/documents/public_panic_crisis.ppt.
This is the script for this month's U.S. socioeconomic video forecast:
Greetings, We’ve had fun these past few months making US Markets and Mood forecast videos. This month, however it didn’t seem right to make a funny video. This month, from all appearances, doesn’t look very funny. There is a combination of mood factors for September that deserves something different. So, this month is more of a heart to heart chat. I’ll tell you what it is that we are looking at—you decide for yourself what it means. We’ll start with the lighter side for the month, the stock market and the dollar:
Stock Market: Unlike last month, with the markets ruled by fear and panic at the slightest rumor, most of September should find the markets focused on data and fundamentals. This shift towards rationality should be noticeable by the end of the first week. It is short-lived however, and by the end of the month, expect a full on return to panic.
US Dollar: As for the dollar, look for confusion, as if a shell game was being played. You may pick the first shell, which does look pretty good, that the dollar is going down. You may pick the second shell, which has potential later in the month, which is that the dollar is going up. The third shell may be the best pick, but what is actually under that is a big secret, and we may never get to see what was underneath it. Now, as we continue, I’m going to ask you to piece together a puzzle with me. First let’s look at the mood factors for U.S. Society in general:
U.S. Society: American society is feeling gloomy and a bit haggard after the onslaught of bad economic news last month. One possible response is to go deeper into despair, but that is not what is showing up for this month. The likely way Americans in general will respond to this, is to shift focus to a few designated “bad guys” out in the world. There are many possibilities to choose from—China and Iran are among the recent favorites, but a burst of creativity could even bring in a new villain. This alone, is not a big deal, and nothing new. However, let’s look next at the U.S. government’s mood for this month:
U.S. Government: We all know that both the president and congress have had extremely low approval ratings for some time. Yet, for whatever reason, the indications are that the U.S. Government comes across to the American people in September as both conciliatory and protector, as benevolent and righteous; and if pushed by outside forces, as an Avenger. Another puzzle piece is the energy markets:
Energy Markets: The mood factors for the energy markets indicate extreme volatility and could be full of surprises—the biggest of which should be near the end of the month. There may be times that rationality intervenes and keeps the moves from getting out of hand, but a combination of extreme weather and looming geopolitical tensions may cause panic to win out over reason in the end.
Summary: In summary, the focus seems to shift this month from internal to external factors; and from economic to geopolitical. Whether this means more product recalls with China, more name calling between the U.S. and Iranian presidents, or something more serious we can not know. It seemed to us to be markedly different than what we have been looking at, and it seemed best to frankly share our concerns with you. Take care of you and yours this month. This is Dr. Cari with A New Story—Be well, and be safe.
The mood in general this month is again very gray, almost despondent. What should keep the stock market from completely crashing is the general lack of energy. The biggest danger is the lack of anchor in facts or anything that has to do with "reality." Just like being alone in the deep woods late at night, the slightest creek or crackle can cause incredible panic as the collective imagination runs wild with ferocious beasts, goblins, and monsters. The U.S. government does its best with smooth talking and placating sounds to try to veer away from fears of impending recession. The most likely response from the government to perceived pressure is secrecy, manipulation of social mood, and new constrictive regulations, especially towards the end of the month. From the U.S. perspective, the rest of the world looks pretty sinister, and like a powder keg that could explode into chaos at any moment. The dollar looks unusually strong this month. European currencies and commodities should continue their decline. Crude oil is showing extremely high ambiguity which could manifest as high volatility, but little overall progress in any particular direction.
August 1-10 - ClimaxThe most notable thing early in the month should be highs in overbought markets and lows in the oversold. This is a period of peaks and valleys; markets should be ready to do an about face. Look for "blow-offs" and other tell-tale signs of trend climax. Week of August 13 - TranquilityThe general mood is indicative of a calming of fears, even relief. The stock market should be making a good attempt at recovery (even if slow). Crude oil should be dropping substantially as the bogeymen that have been propping up the market fail to materialize.
Week of August 20 - EnlightenmentAn epiphany this week should make ambiguities in the markets that have lacked a good sense of direction turn to clarity. It may be another week or two before society in general understands the full implications of this week's events. There is a coming together of mood factors for the U.S. government, the rest of the world, and the factors that influence the price of oil and commodities. However this manifests, it should be interesting. Week of August 26 - AccelerationThe markets pick up speed (even if down) to end the month off with a loud thud. This may be one of those weeks where the only "market" going up is the U.S. dollar.
In July, the economic focus is on practical matters. The mood is somber. There is some concern whether things are going in the “right direction.” The world is watching what looks to them as the demise of the U.S. economy. The response to economic stress is to run from anything suggestive of recession or depression, increasing spending, making deals, and other hypomanic efforts to insure that growth and expansion are still occurring. Another response to difficult news would be an increase in the conciliatory tone of diplomatic effort, and appeasing or comforting those at home.
The U.S. Dollar loses any appearance of strength this month. While the US government turns up efforts at diplomacy and peacemaking. There is a heightened vulnerability towards reacting to domestic stress with external conflict – picking a fight would not be out of the question to distract from problems at home.
Crude Oil: A lessening of bullish factors should lead to a price ceiling. The climb in prices is “empty” – greed chasing its own tail and is difficult to sustain. The bias for the month is for a price decline; however, the market is very sensitive. Any threats or potential threats to supply will send the market climbing.
