Thursday, April 2, 2009

Yesterday's fleeting spike was constructive, since it poked slightly above the last fleeting spike, 934.70, recorded two days earlier. This refreshed the bull trend despite the selloff that followed, and it also put into play a

DaBoyz have shorts on the ropes Wednesday night, and so I have furnished a somewhat ambitious target for the E-Mini S&Ps. It is corroborated by a rally target in Goldman that I would rate as a very high-probability number, and you can play the move with relatively little risk by buying a couple of July-April calendar spreads at the 120 strike. This will be much preferable to buying calls on market orders at the opening, since prices will be rigged to extort.

A mini-wilding spree in the final half-hour brought the futures back to within easy distance of the day's highs, setting up a minor rally pattern in the process that points to 815.00, minimum. As of 7:15 p.m. EDT the rally had stalled precisely at the

Yesterday's challenge - explain how inflation will get off the launching pad in a deflating economy - went unanswered, although the topic itself provoked quite a response in the Rick's Picks forum. The question was not rhetorical, since in order to produce inflation there has to be a mechanism for all of that printing press money inflationists keep blathering about to physically make its way into the consumer economy. Anyone who thinks massive fiscal spending alone can create inflation should read Hayek's The Road to Serfdom, since the equally massive borrowing needed to finance a public works economy will place a severe drag on the productive, private half of the economy (and that's assuming there will even be a private economy once President Obama completes his fascist project of merging The Government with America's biggest corporations). One of the more interesting comments in the forum came from reader David White: "There will be no policy changes," David writes, "only more of the same until the situation is so dire that handing out checks will be the only way to get money into consumer's hands, thus depreciating the currency to save the economy. For a little while longer, at least. Rick obviously doesn't believe that Bernanke won't do what he said he would. But I assure you he will. For that matter, the government started handing checks out last you, setting the precedent for bigger and bigger checks." When Government Gives Up  My response:   "Exactly:  "...until the situation is so dire that handing out checks will be the only way to get money into consumer's hands." This is what I meant when I wrote the following: " Hyperinflation will arrive when The Government decides that fiscal stimulus alone cannot ever get us out of debt, given the vast sums of debt that