I wonder if even Kudlow sees the Dow going that high? It’s not often that my forecasts skew north of whatever guesstimates CNBC’s shills are touting. Perhaps I should raise my estimate to DJIA 50000 to get some mileage out of it? It could happen, too, if there were a hyperinflationary phase before the inevitable deflationary bust forces borrowers and lenders to come to terms without killing each other.  But hyperinflating debtors' problems into oblivion seems most unlikely, since it would devastate lenders. That’s why they changed the bankruptcy laws – so that if and when the rentiers are left holding the bag, there will at least be something in it. Like what? Answer: Joe Sixpack’s legally binding promise to repay at least 90 cents on the dollar, even if it takes three generations of Sixpacks, working 40 hours a week for a total of 120 man-years, to retire great-granddad's last dime of debt.

GOP Defenestration

There could be a silver lining for a fast-acting few, though. As I’ve pointed out before, a hyperinflation implies that real estate values would go bonkers. That means some guy’s house with a $300,000 mortgage could sell, if only briefly, for a quadrillion dollars, give or take a few hundred bil. But that’s only if one can find a cash buyer when peak prices are hit. The top of such a spike could be traced out in mere hours, so a seller would have to be quite a market timer to catch the top -- assuming one's spouse was on board and they had a rental waiting.

In the meantime, we should focus on the far more modest objective of Dow 13045. If it’s achieved,  the pundits will doubtless be saying that voters think Democrats are going to be better for business than Republicans.  If I had to concoct a perfect story with which to bait the most treacherous bull trap since the summer of 1929, I could not have dreamt up anything so preposterous as the Dow steaming toward record highs just as the Party of Big Business is about to be defenestrated.

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