Stocks will SOAR

IF: 1.) SC kills Obamacare or, 2) SC keeps Obamacare or, 3) EU craters this week or, 4) EU announces it has fixed everything this week or, 5) Bernanke announces surprise for new QE or, 6) Bernanke sits on his hands and does no QE See the market is pretty much perfectly rigged, so we no longer have "crashes" other than an occasional flash in the pan type crash that quickly recovers, or a minor correction. Its hard to call this a bull market though, because it is all based on a monetary phenomenon, whereby we as holders of US dollars, aren't immediately cognizant of the debasement of our currency. Any perceived increase in the indexes, is really a still a slippage, just not as bad as it might otherwise be if our currency wasn't be obliterated. Pretty much anything denominated in US dollars, as far as assets go is being devalued. Occasionally, you might find a property gem or two, or some unusual holding that surpasses the average, but those are quite rare. But for services that you need, like healthcare, or a college degree, those costs keep sky-rocketing, and those two are really showing us how the value of our dollars are eroding. Food and water continue to increase at a strong pace, except for foods that are highly processed and where they are able to obfuscate the the fact there is very little nutritional value. (i.e. fast foods, most boxed foods, and anything that is not of a "whole food" variety.) In the not too distant future, your "wealth" or socio-economic status will be determined in large part on how easily you can pay off college without going into massive debt, and maintaining a healthcare "insurance" plan that covers you for more than just a broken arm, or a cut requiring stitches. Thus the race to debase continues between us, and other country's, and capital that is flowing around is chasing riskier and riskier and more far future oriented returns. And since many are so future oriented far out into many years before real profitability, many things technology wise can occur to disrupt any business model BEFORE the higher returns actually accrue to investors. A good example of that is FB, where just about anything could come along to unseat its flimsy model. Another one is the 65 million plus housing units in China that remain vacant and can either deteriorate before they can be afforded, or be supplanted by other less expensive housing clusters (i.e. cardboard boxes). That also includes roads, bridges, dams, parks to nowhere as well in China. Thus because of the massive debt overhang across the entire globe exists, the only things able to get done, are very short term in nature, and will require to have near immediate paybacks. Capital will continue to be misallocated big time, until all the banks, lenders, states, nations are FORCED TO EAT IT, and mark it to market. They have to take the losses, they have to go bankrupt, and be wiped out. There is no other solution. Its called keep it simple stupid, not keep those people who deserve to endure the pain, from being taken under. This little societal "monetary" experiment will no doubt be perpetuated for years. Maybe 100 years from now, people living then will look back and wonder why this world at this time was so utterly freaking blind and stupid about it. It will be blamed on hubris and arrogance. Until then Stocks will SOAR. But "Soaring" in this case, is similar to the person who got dropped out of an airplane without a functioning parachute, and still does not know that the parachute won't work, and that the "soaring" is really part of a downward spiral. Eventually he hits mother earth and goes splat. The financial laws are immutable, and just like gravity, they cannot be defied.

IF:

1.) SC kills Obamacare

or,

2) SC keeps Obamacare

or,

3) EU craters this week

or,

4) EU announces it has fixed everything this week

or,

5) Bernanke announces surprise for new QE

or,

6) Bernanke sits on his hands and does no QE


See the market is pretty much perfectly rigged, so we no longer have "crashes" other than an occasional flash in the pan type crash that quickly recovers, or a minor correction. Its hard to call this a bull market though, because it is all based on a monetary phenomenon, whereby we as holders of US dollars, aren't immediately cognizant of the debasement of our currency. Any perceived increase in the indexes, is really a still a slippage, just not as bad as it might otherwise be if our currency wasn't be obliterated. Pretty much anything denominated in US dollars, as far as assets go is being devalued. Occasionally, you might find a property gem or two, or some unusual holding that surpasses the average, but those are quite rare.

But for services that you need, like healthcare, or a college degree, those costs keep sky-rocketing, and those two are really showing us how the value of our dollars are eroding. Food and water continue to increase at a strong pace, except for foods that are highly processed and where they are able to obfuscate the the fact there is very little nutritional value. (i.e. fast foods, most boxed foods, and anything that is not of a "whole food" variety.)

In the not too distant future, your "wealth" or socio-economic status will be determined in large part on how easily you can pay off college without going into massive debt, and maintaining a healthcare "insurance" plan that covers you for more than just a broken arm, or a cut requiring stitches.

Thus the race to debase continues between us, and other country's, and capital that is flowing around is chasing riskier and riskier and more far future oriented returns. And since many are so future oriented far out into many years before real profitability, many things technology wise can occur to disrupt any business model BEFORE the higher returns actually accrue to investors. A good example of that is FB, where just about anything could come along to unseat its flimsy model. Another one is the 65 million plus housing units in China that remain vacant and can either deteriorate before they can be afforded, or be supplanted by other less expensive housing clusters (i.e. cardboard boxes). That also includes roads, bridges, dams, parks to nowhere as well in China.

Thus because of the massive debt overhang across the entire globe exists, the only things able to get done, are very short term in nature, and will require to have near immediate paybacks. Capital will continue to be misallocated big time, until all the banks, lenders, states, nations are FORCED TO EAT IT, and mark it to market. They have to take the losses, they have to go bankrupt, and be wiped out. There is no other solution.

Its called keep it simple stupid, not keep those people who deserve to endure the pain, from being taken under.

This little societal "monetary" experiment will no doubt be perpetuated for years. Maybe 100 years from now, people living then will look back and wonder why this world at this time was so utterly freaking blind and stupid about it.

It will be blamed on hubris and arrogance.

Until then Stocks will SOAR. But "Soaring" in this case, is similar to the person who got dropped out of an airplane without a functioning parachute, and still does not know that the parachute won't work, and that the "soaring" is really part of a downward spiral. Eventually he hits mother earth and goes splat.

The financial laws are immutable, and just like gravity, they cannot be defied.

Very good post. I agree with lots of this...many people are being lulled into complacency and it will prove devastating when the current game unravels. In many ways we have no excuse to not be prepared for what is coming. The current policies are buying us quite a bit of time to reallocate some assets to precious metals/other countries/productive assets/etc.


It's kind of like in Greece...at this point those who lose their money if the country redenominates their bank accounts have themselves to blame. They have had over 2 years during which they could withdraw 100 strong euro cents on the dollar and protect themselves. If someone still has all their money in the banking system and ends up losing it, they can't really just blame the government for what happens.

So long as so many gold dealers are clamoring to sell me that shiny metal in exchange for my depreciating, debased & worthless dollars, I am more inclined to hang on to the dollars. May be we will get more sane government policies after the coming election.