December 28, 2008

Inflation - deflation - inflation. Crash - recovery - bigger crash?

Many here are in the inflation - then deflation - then inflation camp.

I think many are now gelling around the crash - recovery - even bigger crash idea.

What will it be? And is buy-and-hold dead?

And what's this S&P 500 double-bubble stock chart trend called? The "Pam Anderson"?

Shares traders and investors have one more solid quarter, in our view to regain some stock market losses on the forthcoming Obama Trillion Dollar handouts. We think the rising share markets will help most all sectors gain some recovery and provide the illusion the bottoms are in and new bases found.

The stark reality hits home after shares peak in April or early May taking an unprecedented selling high dive scaring the wits out of Americans and the watching world.

Even with these events and rising unemployment and social problems, economic observers and analysts could continue to plead the worst is over, the bottoms are in and a fine, new, shiny world of trading and investing in our bright economy lies just ahead for the fall of 2009. Then, in later September and early October, the New York, London, Tokyo and Asian markets take a monster crash.

How low is low and how bad can it get? We think the Dow could end-up on November 1st, 2009 anywhere from 5,600 to a low of 3,000 or even 1,500. One guideline will be a falling overshoot of PE's on our largest, so-called international corporations posting lows of 4 to7. Today, many of them are near 18. What does this tell us about the severity of our projections?

Unemployment nationally in the USA is now touching 16%. The officially posted number is somewhere near half of that. By the fall of 2009, American REAL UNEMPLOYMENT WILL BE NEAR THE ALLTIME 1930'S DEPRESSION HIGH OF 25% UNEMPLOYED.


alex3191 said...

It is my belief that our current economic "slowdown" is not a slowdown but is the beginning of a complete and total global economic collapse. Not a recession. Not a depression. A collapse. I think the data and the facts are on my side ...
Wanna bet ?!

SeattleMoose said...

I agree with Alex3191....the current financial system will have a meltdown. It is unsustainable as it is all based on "growth".

And since the 1990's "growth" has been fake, not real (, Housing, etc.). We are out of fake growth manias.....

Worse, those at the top know it and have been skimming more and more money into their own accounts as the "end game" nears. The desperation in seeing "the wall" approaching are driving more of these "captains of industry" to acts that can only be described as criminal.

When the end comes it will be brutal for awhile but I have hope that people will wake up (they will be forced to) and a better/stronger world will emerge in the long run. The world population will be about 1/3 less than it is today.

So inflation/ doesn't matter. There is no safety in anything except the things that people will always, water, shelter, and protection.

consultant said...


If you haven't seen it, watch the movie, "The Mist".

That is how people are going to start acting.

Like that immoral, brainless lunatic who dressed as Santa, and then slaughtered his ex-wife and her family in Covina, Ca.

JR said...

If you want to make some quick cash, begin averaging back into the market in the next week. A couple of things:

1. The irrational exuberance of an Obama inauguration will usher in a rally. The rally will be completely hollow and without any fundamental underpinning, but that won't stop institutional investors as well as a good helping of main street slobs from getting back into commodities/materials and perhaps dabble in tech and healthcare.

2. Soon thereafter, hot money will begin flooding the market. Unemployment will continue apace, foreclosures will finally be stemmed once it is announced that loan principles will be reduced in a desperate Hail Mary attempt to get consumers spending on worthless Chinese crap again. Look for retail, construction, tech and just about every other sector to race for a slice of the TARP/Stimulus pie. Most will be successful as Obamites come to the conclusion that we might as well avail ourselves of almost unlimited, reckless borrowing now because the USD will soon be relegated to the dustbin of time.

So, yes--there will be a rally and a tremendous opportunity to make money over the next several months. The question is, how do you get those soon-to-be worthless dollars into a more substantive currency, that is to say, a currency with a future.

Make your money and get out. I'm going into UYM, USO/USL, RIO, AGU and ABV for the mid term and then unloading around March would be my guess.

Problem is, poor US economic fundamentals have not been modified in any way, and indeed, have only been reinforced. We've been encouraged to get out there and spend; a situation that isn't entirely dissimilar from Bush's Get out there and shop, sermon on the rubble consumerist exhortations following another calamity - 9/11.

A bond bubble is now a certainty and our manufacturing base is still a figment of our collective imaginations. Our kids are still stupid compared to the rest of the first world and we have a generation of geriatrics coming online who will be taking full advantage of SS, Medicare, etc. That initial devaluation is going to sting as well. Who knows, we may already be seeing social breakdown that emanates outward from Gaza.

casey said...

The sky is falling!!!!
the way the govt calculates inflation we will never know the truth.There was no inflation during the housing bubble according to them.
Haven't home prices already delfated 50-75% in bubble areas?Oil is down 75% right?

As long as people need something it will go up in value over time.Some things go obsolete due to inflation.Look at a chart of home prices over time.As soon as the panic is out of the market they will continue there rise.
AS prices rise people look to alternatives.So if oil goes to 10 bucks a gallon I guarantee other products will come online to compete.

long beach,ca said...

i am just waiting for the mayan calender to say game over.......

G Money said...

I think you will appreciate this video with Peter Schiff & Ron Paul... It's about 10 Minutes, but well worth the time.

Very sobering...

Keith you should post this video for comments.

Lady Di said...

Trendsforecaster Gerald Celente said it best:
08 was the year of panic
09 will be the year of collapse

starting with retail in Feb 09.

"Grim economic news will send the market to new lows in 09", Roubini

Elliott Wave 5 down, it's coming...

Got DXD?

k.w. - Southern Ca. said...

Unfortunately, Alex is correct -

This is a systemic problem, the very core of our economy is rotten and needs to be replaced with an actual working alternative for the masses.

Without substantial change, where the masses have better wages, longer lasting jobs and better/cheaper healthcare, we're headed for a long, protracted nasty slide into very dark economic times.

We still don't realize how to really deal with the problem is, so our fools up in Washington keep throwing chunks of money at this problem.

I wouldn't bet with you Alex, since I also know the data is on your side.

alex3191 said...
It is my belief that our current economic "slowdown" is not a slowdown but is the beginning of a complete and total global economic collapse. Not a recession. Not a depression. A collapse. I think the data and the facts are on my side ...
Wanna bet ?!

Anonymous said...

"...Paulson told us this week there are no more surprises, which tells me we haven't even discovered but a small portion..."


Excessive debt and insufficient production are what started the meltdown...

More debt(squandered on wealth-hoarding moneybags instead of invested in future production capacity) is the answer?

k.w. - Southern Ca. said...

Whether some of you agree or disagree with this video, it's worth hearing about the state of our current economic disaster from William Engdahl:

I'll put my money (while it's still has some worth) on Engdahl anytime.

Anonymous said...

Well, I am with you on one thing, Keith. The enthusiasm of the new Administration will raise the stock market.

But it won't be long until the afterglow wears off.

If I had to bet $10, I'd say in the Fall when the car makers discover once again that they can't sell shit.

Will it be time to buy then or head for the beaches of Costa Rica? You tell me, I have no freaking idea.


Lost Cause said...

Some may see that chart as a double humped camel...but I see it as a giant ass: George W. Bush.

Anonymous said...

Yep, we're going to have the Obamanoid-sucker-feel good-phony rally, conducted by the crooks on Wall Street and Zionists at PPT. Every Messiah anouncement will be followed by the PPT pumping the market, and the Wall Street crooks joining the lie to fleece the sheep.

But nothing will change much because 3/4 of GDP depend on consumer overspending and people living beyond their means. That's dead for a long time, no matter how much sugarcoating the Messiah and his bootlicker MSM try to sell to the retards.

Talking about retards, next big news will be Apple selling iPhones at 7-Eleven stores around the country. AAPL stock will skyrocket on the news for 2 days and then back to the toilet.

PS: Does anyone here will ever buy a GM car to support the union parasites who are high school dropouts and earn six-figure salaries by pressing buttons on a machine? I rest my case.

Anonymous said...

blow the hell outta consumers and they come back and spend more to repair and replace and if yourE a country whose economy is based on consumer growth id staRT TO WORRY WHAT PRODUCER STATES MIGHT HAVE IN MIND FOR YOU...BUT, WELL I KNOW CUSTOMERS AND.....................

Anonymous said...

Here is my "BLACK SWAN/NICHOLAS TALEB" event...

Short term interest rates will DRASTICALLY RISE by the middle of next year as the US Gov. defaults.

Remember, Greenspan in his autobiography predicted that "in the near future we will see a return to double digit interest rates."

By the way,ICELAND has raised their interest rates to 18%.

Why the alternative economists that we see in this website and those similar to this one have NOT mentioned anything about double digit interest rates is beyond me. It's always the same tired argument of deflation vs.inflation.


We were always told that the death blow of the Great Depression was the stock market crash of was not!!


Does anyone care to substitute Great Britain and France with China and OPEC member nations?

Talk about a BLACK SWAN EVENT!!

Anonymous said...

That chart really gets interesting when you check the housing sector/GDP ratio. All that growth you see from early 90's was created by fooling Americans into leveraging themselves into financing homes and Helocs. Or as I call them, the Zionist-banker slaves.

Anonymous said...

Remember it took a period of over three years to get to the 25% unemployment during the Great Depression.

IHS Global Insight, a Waltham forecasting firm, projects the jobless rate will hit 9.4 percent by the end of 2009.

Even pessimistic forecasts proved not pessimistic enough as financial markets crumbled, credit markets froze, home prices collapsed, oil prices soared, and battered US consumers finally gave up and nearly stopped spending.

"I didn't see it deteriorate," Yamarone conceded in a recent interview. A year ago, he said he thought consumer spending, which accounts for about 70 percent of US economic activity, would continue to grow. "I could not imagine that the economy could fall so sharply, so quickly."

Wally said...

Chart is misleading, should be plotted on a log axis for the y-scale, this misleads us to believe that the 70s and 80s were a flat line and all the volatility came in the most recent years.

Anonymous said...

from what I've read of technical analysis, the projected bottom of a double top formation is the difference between the peak and the valley subtracted from the valley. So about 700 difference subtracted from the 800 valley low gives a projection of 100 on the S&P index. But that formula may be for non inflation adjusted numbers.

TRPM said...

Everyone expects this Obama rally, which makes me thinks it aint gonna happen.
Short this sucker right here and now cause we're goin DOWN!

the real peyton manning

Anonymous said...

We are all about to realize just how much the govt. is underreporting the unemployment numbers!!

Bush and Co. has been supressing as much bad news as they can until they take the last lifeboat out, and Barry takes the helm.

Watch and see--We are already at about heard it here first.

Anonymous said...

The blurb at the bottom of the article tells it all:
"Roger Wiegand is Editor of Trader Tracks Newsletter for gold, silver and energy traders."

Of course. He wants you scared so you buy the gold, silver and energy he has an interest in. Sorry Roger, I already sold my gold to some chumps at $800/oz.

Always follow the money.

Anonymous said...

Trained scientists will remind you that, while interpolation is kind-of okay (kind of), extrapolation is terribly dangerous.

Equity ownership by the masses has been a phenomenon for, what?, 30-40 years. Debt-fueled spending has been Big in the past, what?, 15 years. (Somebody older than I can make the numbers more precise). Synopsis, the current nature of the monetary culture is young. Long-term / buy-and-hold investing has a time horizon of, what?, 40 years. Can anybody really truly say that the behaviors and responses – we call it economics – since 1960 onwards will work similarly to 2009 onwards? Economics is a model based on observation, like all science.

I won’t predict, nor will I preclude, collapse. I predict major upheaval of our understanding of economics and continued volatility as we grope for an understand of this beast.