Q: The market is way higher after Brexit. If Italy leaves the European Union, will the global stock market go way much higher?
A: Yes. Definitely.
Then when Greece, Portugal, Spain, Hungary, etc. go; stocks will shoot even higher!
The EU is doomed.
Go on, tell me I’m wrong. Bash me and say, “Oh the EU is the best idea ever and will see all kinds of prosperity in the future.”
I disagree… and here is why…
Everything from Germany basically paying for Greece’s pension system to massive immigration issues… the EU is not working!
The UK is the first to say, “We’re not taking it anymore! We don’t want to pay for things we don’t agree with. We don’t want to comply with laws that we don’t agree with. We don’t want to take part in things we don’t agree with!”
But… you asked about the global stock market.
So, let me explain why the market went back up after Brexit:
Central banks and governments have distorted our financial system with all sorts of crazy things like money printing (QE) and low rates (sometimes negative!).
Investors feel like they have no other option… they feel like they must buy stocks, because their bank accounts are yielding less than the rate of inflation.
So… you could say that the governments strategies to stimulate the economy has kinda worked. BUT IT’S COMPLETELY FAKE.
Yes, the stock market will go up, but it is only going up because people feel like they don’t have any other place to put their money. That drives up the values of companies that have no reason to be valued anywhere near where they are currently trading.
The longterm outlook is not looking good. The short term may see market go way higher – but this is a trap!