Hello, my name is Coy Wells with Daily Market
Insights and U.S. Money Reserve. Last week we talked about the falling oil
prices and how the oil price could be an indicator of a recession. As we discussed last week, it’s unusual to
see the oil prices pull back going into the summer after school break. Typically we see oil prices increase. The other thing that we’re going to talk about
the day to kind of confirm what we discussed last week is another facet of the stock market,
and that would be the shiller index. The shiller index measures the PE ratios and
the inflationary rate of stock value. Let me kind of explain what that means. This is the price to earnings which most consumers
are accustomed to and understanding what that is, but this is the inflationary rate of the
PE ratio is rising in the economy against the stock market. It tells us in most cases that the earnings
of the company are not doing what the stock value should be doing. A key example of this would be let’s use Apple
computers as an example. Nothing against apple computers, great company,
great organization. And a company is fixing a set of record in
the stock market, but let’s assume that Apple computers is doing well and their earnings
are solid. Ultimately, with that being said, their stock
value should be increasing, but if Apple computers is doing poorly, the adverse of that would
be happening, meaning that their stock value would be going down. Their Shiller index picks up when there’s
something wrong when something is not happening correctly, and what that means is that if
Apple computers in the earnings, hypothetically were doing poor and their stock value was
still being going up, that’s when the shiller index kicks in. That’s when it starts measuring the inflationary
rate of stock value. The shiller index were put together by a gentleman
by the name of Robert Shiller, who is a Nobel prize winner. It has gone back in history and been able
to identify not only the Great Depression under the shiller index, but it’s also been
able to identify 11 recessions since then, including 2000 and 2008. The question now becomes, is the stock market
overvalued? Going back over six months ago, we talked
about the shiller index and exactly what it means, very similar with what we did today. Right now, the shiller index is sitting at
33.13. To put that in perspective, when we started
talking about the shiller index over six months ago, it was between 25 and 27. It moves every day just like the the vix report
will do or the vix index would do. Right now, the shiller index is sitting at
a point in history today, right now at 33.13. The great depression hit a level of 30 in
2008. It was around 17. This is the second highest against 1929 ever
recorded in U.S. history. It tells us that the in conjunction with raising
interest rates in the sell off U.S. treasury bonds and some of the other things that are
taking place that we’ve talked about over the last six months is increasing the risk
in the stock market is continuing to grow. That bubble is increasing, as we’ve talked
about over the course of the last six months to a year. The indicators that are out there are ultra
important to understand, and we’ve talked about this time and time again and I know
we’ve talked about recessions and we’ve talked about depressions, but so are all the other
economists that are out there. Most are saying that it can happen at any
point in time that is a from now until 2020. But we also understand that most consumers
understand that right now we’re sitting in a market that is at the longest we’ve ever
seen in history. We’ve never seen what we’re seeing happen
right now. We’re also seeing negotiations take place
with trump and North Korea. As we’re cutting this video right now. That means that the market can sway left and
right because of that small political or big political issues in the market should not
be able to sway the market in large sums like we’ve seen in the past, which we’ve also talked
about. For those who understand the shiller index
or those who don’t understand the shiller index. You can look it up on Shiller pe, multpl.com,
the shiller pe multpl.com, and just type that in and your google search bar and it’ll pull
up, click on it. It should be the first search engine that
you look at. When you look at that, you’ll see a graph
there and that graph will go back all the way to the beginning when the stock market
happened until today, and it will give you a clear indication of what kind of bubble
that the U.S. economy is sitting in. The thing that you have to understand is,
is that why don’t most people know about the shiller index? Your broker, I can assure you that he knows
about the shiller index and your financial advisor also knows about the shiller index. These are key components that they use to
help them understand what risk is involved in a stock market. Your brokers are most likely telling you to
put more into the market as the market is at risk. The more money they’re going to want in there
to keep it alive and some of the stuff that we’re seeing take place as we’ve discussed
like the repeal of the Dodd Frank Act. This is an influx of cash that they’re looking
for to help support a market that was beginning to become stagnant. We saw several months, we’re about a month
worth of time where the stock market, just that flat there, and that was about the last
month is when that took place. For more information about what we’re talking
about, call the phone number on the screen to get additional information about what we’ve
talked about today. We have the 2018 annual Gold Global Forecast. This will also give you additional information
in regards to the information we’ve talked about for about the last six months to a year. There’s a lot of really good information in
here and again, I’d encourage you call the phone number on the screen there and as always,
thank you for watching daily market insights.

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