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Higgins Capital Management, Inc.

The Great Reset

The Economy: Despite a decade of unprecedented Central Bank stimulus, the global economic expansion appears to be slowing. Slowing doesn't mean contracting. It means that the rate of expansion is slowing. Growth in China is down to the 6-7% level. Yet, a 6+% growth rate, for one country with approximately 1/4 of global population, is an economic dynamo that can't be ignored. How this plays out is the great unknown. The assumption is that China is a monolith set on an unalterable course of world economic, political and military domination. The narrative is that China's place in the sun has been conferred by fate. That America and capitalism will be swept away by a new Communist/Democratic Socialist wave that will introduce a new age of enlightened humanity. That Communist China and Democratic Socialism will produce egalitarian redistribution of global assets to those who don't want to work. The rest of the toiling worker-bees will slave away for the growing numbers of those who think that work is for suckers. The mainstream media (MSM) has proven itself corrupt and incapable of reporting facts without spin. So why would anyone accept the MSM fantasy that wage-slaves are suckers and China is the muscular new kid on the block? The American Miracle is the side to be on. We're going to have a dramatic reset sooner or later. But the idea that we're going to roll over for the Chinese Communists/Democratic Socialists is a fatal investment error. Look to energy, metals, cannabis, crypto and blockchain.

Food for Thought: Yes, The Great Reset. When will it happen and what will it look like? Begin with our assumptions: First: The Fed and other Central Banks will continue to do whatever it takes to manipulate asset bubbles higher. Second: Lending standards will continue to deteriorate as financial institutions fight for lower profits. Third: Sovereign, corporate and consumer debt will continue to surge higher without end. Fourth: These three trends will continue until they fail, because they are fatally flawed; . … could be tomorrow or in 10-years. It's the same story at the end of all asset bubbles. They always pop; never deflate. Not the end of the world … rather a tremendous opportunity for the willing. Regardless of timing, the question is, "What investment opportunities will present themselves?" The themes that fueled this Bull Market have run their course. The only theme that matters now is the presidential election in 2020. Barring unforeseen tragedy, expect our 4 assumptions to remain intact for the duration.  Trump will do everything possible to maintain the financial markets gravy train … just as every incumbent has done. … and keep in mind that Donald Trump has withstood all assaults on his legitimacy. There may be another 6-years of this administration. We are in a transitionary period between two eras: the Boomer led post-WWII globalist hegemony and the dawning age of nationalist sovereignty as showcased by China.  Neither history nor culture are linear. Buckle Up because the proverbial question remains, "Do you want to be right or do you want to make money?" Contact us.