(The bear’s lament penned by our friend Erich Simon provoked such a torrent of comments that we’re letting it run for a second day. Is the upward drift of stocks since March of 2009 actually a stealth bull market cloaked in some of the most depressing economic data since the Great Depression? You can weigh in with your own thoughts on this by clicking here! RA)
Are stocks in a short-lived sweet spot engineered to coincide with next month’s elections? Or is there something much bigger in store: a Megabull market engineered by the Fed and Wall Street that will run for years? And don’t discount this possibility merely because the economy has been so weak. After all, in the last two decades, free markets have gone into eclipse and now serve not the public, but Masters of the Universe who seem able to manipulate prices any which way they choose, regardless of “fundamentals.” It’s also possible we’re at the point of global saturation, where there are not enough investible resources to satisfy demand. And the government is not exactly a neutral bystander any more (not that it ever was). The U.S. has taken an increasingly active role in propping up key stocks — and even the broad averages, if you believe all those stories about the Plunge Protection Team.
I don’t recall exactly where the trendline from the dot-com bust comes in these days, but it’s somewhere around Dow 12800. The Industrial Average is trading now around 11000, but if it were to push past that trendline, you can be sure that some gurus would be making hay with predictions of Dow 36000. Actually, they wouldn’t be the first, since there’s a book out with the title “Dow 36000”. It was published in 2000, and although it’s considered something of a classic of wrong-headedness by many who have reviewed it on Amazon, I’m not aware that the authors, James Glassman and Kevin Hassett, ever retracted their prediction, Perhaps their day will come? If so, shorts will go the way of the dodo bird.
New, Improved Dollar?
With stocks headed to the moon, a vaporous dollar would collapse. But it wouldn’t matter, since the dollar is no longer a store of value; rather, it is more like an entitlement coupon, like food stamps (which are currently used by more than 40 million Americans). But don’t count the dollar out. The basis for its resurrection, from mirage to hard money, may be in the offing, plotted behind closed doors over the last ten or twenty years. The Fed would commandeer the U.S. credit markets, which they already have to a large degree. Is this our economic future?
Imagine the nationalization of…everything: a world where we all get microchip implants and fall into line. Scary stuff, for sure, but at some point The Government is going to have to reign in the autonomous, disenfranchised and socially disintegrating masses before all control is lost. But if the Dow is trading at 36000 then, you can be sure the mainstream media will be telling us that life in America has never been better. The odd thing is, most of us will probably believe it.
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johnny come lately I know, but it is a bull market, no matter how it’s defined, but a very hollow bull market with real value decline…all the dollars being made on the equity side and the commodity side will be less valuable; the unstoppable decline in the dollar, unsurmountable federal, state and municipal debt and smoking printing presses will make sure everything worthlessly runs to the moon…I might go long rutabagas because in five years, they might be more valuable than usual investments and the USD…and at this point, I’d like to say to redwilldanaher that, at this point, clarity is still the king of good prose and I might be daft, but at this point, I don’t know what the hell you were talking about in your post…I’m sure you had something to say, but at this point, uh….