2023 FTSE Prediction: Another Tough Year

The FTSE is the least stellar market amongst the west bourses and the U.K. is going through a period where it not only has to ride out the post-Covid landscape but also the post-EU landscape. The post-Covid situation is ugly enough, with a vast public sector debt built up, runaway inflation and a sharply rising interest rate reality with additional tightening to top off the situation.

It is a wonder the market is not a lot lower.

Here is the chart:

Zooming in closer you can see the tramlines that a recovery will likely run between and recall the last time these lines were breached the whole U.K. (pension funds industry) nearly melted down and the Bank of England magicked up $100 billion bailout to make sure pensioners like themselves (their pensions were up to their eyeballs in the pension leverage scandal exposure) did not suffer.

Here is that chart:

To me 6,000 is more likely than 8,000 but under the hood you have inflation lifting the price of shares just like it lifts the price of cabbage. That price will be hidden until the economic tables turn, as they will if the people that administer the first world don’t mess up.

2023 will be tough and in 2024 it will turn or at least base, then unless the insane clown posse wrecks something else then up we will go.

Meanwhile my question is, can this pan out without something breaking? That thing seems to be pensions, because government debt has been built up on printed money and stealth pension raids, in this case buying lots of government debt with borrowed money to fund pensions by in effect buying sovereign (junk?) bonds to use as collateral to buy more government bonds to repeat multiple times. This funds government runaway debt (funny how the government regulator didn’t care to spot this) until the system of this breaks. Then who will lend the government money? If no one, the way out is inflation… this is how inflation works in Turkey, South America, Africa etc. No one will lend to you, you can’t get enough tax in, so you print.

Of course pensioners are an easy kill because they don’t burn stuff and don’t vote for new people.

So if something breaks it will be government debt and pensions, followed by utter chaos.

So let’s hope they can keep it together and the can can be kicked for another two-three years.