[MCD] peak watch

I have clearly been on McDonald's peak watch for several posts now as you can see from the backlink.  There is not much new to report today but I did want to zoom in a bit and show why I think we are just a few days from the final Ponzi peak for MCD shares.  If you look closely, the recent action was lime green w3 and we are either working on green 4 or recently done with it.  Thus I expect the peak to be somewhere in the 115-116 range which is less than 2% upside from current price.

I want to be on record clearly stating that MCD shares are not bulletproof and in fact far from it.  MCD runs a fairly low margin business which has benefited from global expansion.  MCD store expansion has been enabled by persistently low interest rates and ever more Kum-Ba-Yah, "can't we all just get along" globalism which itself was enabled by rising prosperity based on rapidly rising debt fueled GDP growth.  But now additional debt and additional stimulus is no longer buying additional prosperity and in fact it will turn into negative prosperity once interest rates begin to rise. 

The main driver of reduction of debt fueled prosperity is cost push inflation.  In other words, input costs begin to catch up to the additional revenues that a growing money supply has created.  You saw what happened when WMT buckled to the pressure of higher wages and we have seen MCD come under the same pressure.  Unless they agree to raise wages like WMT, MCD will either see a collapse in the number of useful people wanting to work there OR it will see the unions move in.


When any of these things finally happen, expect MCD shares to collapse just like WMT, just like M, just like JWN, etc.  It's all one big Ponzi market and the weaker players are already in free fall.  Why nobody is talking about this is beyond me.  The herd sees a few of its big names begin to collapse and it is not registering yet that this is not "one off" trouble with some particular business.  The whole system is in trouble and the markets will come to reflect this across the board in the fullness of time.