Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
CHIA Coins After 1st Week of Plotting 140 Plot 14tb Farm. Crunching the Numbers How to Win - 15th May 21
Tips to Create the Best Cross-Functional Teams - 15th May 21
Gold: Lose a Battle to Win the War - 14th May 21
Are You Invested in America’s “Two-Hour Boom” Fast Shipping Stocks? - 14th May 21
Gold to Benefit from Mounting US Debt Pile - 14th May 21
6 Solid Signs You Should Have Your Smart Device Repaired Right Away - 14th May 21
Ways to Finance Your Business Growth - 14th May 21
Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
How Much CHIA Coins Profit from 100 Plot 10tb Farm? Hard Drive Space Mining - 13th May 21
Stock Market Bulls Getting Caught in the Whirlwind - 13th May 21
Legoland Windsor Mini land and Sky Train Virtual Tour in VR 360 - UK London Holidays 2021 - 13th May 21
Peak Growth and Inflation - 13th May 21
Where’s The Fed? Watch Precious Metals For Signs Of Inflation Panic - 13th May 21
Coronavius Covid-19 in Italy in August 2019! - 13th May 21
India Covid Apocalypse Heralds Catastrophe for Pakistan and Bangladesh - 13th May 21
TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
Gold Price During Hyperinflation - 12th May 21
Stock Market Extending Phase Two? - 12th May 21
Crypto 101 for new traders – ETH or BTC? - 12th May 21
Stock Market Enters Early Summer Correction Trend Forecast Time Window - 11th May 21
GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
Cathy Wood Bubble Bursts as ARK Funds CRASH! Enter into a Severe Bear Market - 11th May 21
Apply This Technique to Stop Rushing into Trades - 10th May 21
Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
CHIA Getting Started SSD Crypto Mining by Plotting and Farming on Your Hard Drives Guide - 9th May 21
Yaheetech Mesh Best Cheap Computer /. Gaming Chairs on Amazon Review - 9th May 21
Breaking US Trade Embargo with Cuba - Build 7 Computers in 14 Hours Before Ship Sales Challenge - 9th May 21
Dripcoin Applies New Technology That Provides Faster Order Execution - 9th May 21
Capital Gains Tax Hike News: Was It REALLY to Blame for Sell-off? - 7th May 21
Stock Market Transportation Index Continues To Grind Higher - 7th May 21
SPX Stock Market Correction Arriving or Not? - 7th May 21
How to Invest in an Online Casino? - 7th May 21
Gold & Silver Begin New Advancing Cycle Phase - 6th May 21
Vaccine Economic Boom and Bust - 6th May 21
USDX, Gold Miners: The Lion and the Jackals - 6th May 21
What If You Turn Off Your PC During Windows Update? Stuck on Automatic Repair Nightmare! - 6th May 21
4 Insurance Policies You Should Consider Buying - 6th May 21
Fed Taper Smoke and Mirrors - 5th May 21
Global Economic Recovery 2021 and the Dark Legacies of Smoot-Hawley - 5th May 21
Utility Stocks Continue To Rally – Sending A Warning Signal Yet? - 5th May 21
ROIMAX Trading Platform Review - 5th May 21
Gas and Electricity Price Trends so far in 2021 for the United Kingdom - 5th May 21
Crypto Bubble Mania Free Money GPU Mining With NiceHash Continues... - 4th May 21
Stock Market SPX Short-term Correction - 4th May 21
Gold & Silver Wait Their Turn to Ride the Inflationary Wave - 4th May 21
Gold Can’t Wait to Fall – Even Without USDX’s Help - 4th May 21
Stock Market Investor Psychology: Here are 2 Rare Traits Now on Display - 4th May 21
Sheffield Peoples Referendum May 6th Local Elections 2021 - Vote for Committee Decision's or Dictatorship - 4th May 21
AlphaLive Brings Out Latest Trading App for Android - 4th May 21
India Covid-19 Apocalypse Heralds Catastrophe for Pakistan & Bangladesh, Covid in Italy August 2019! - 3rd May 21
Why Ryzen PBO Overclock is Better than ALL Core Under Volting - 5950x, 5900x, 5800x, 5600x Despite Benchmarks - 3rd May 21
MMT: Medieval Monetary Theory - 3rd May 21
Magical Flowering Budgies Bird of Paradise Indoor Grape Vine Flying Fun in VR 3D 180 UK - 3rd May 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

When Stock Market Fiction Meets Economic Reality

Stock-Markets / Stock Markets 2010 Mar 16, 2010 - 01:13 AM GMT

By: Captain_Hook

Stock-Markets

Best Financial Markets Analysis ArticleThere is no end to speculation concerning the stock market at present, with everything from credible crash calls to major gold stock rallies lying directly ahead. So the question begs, as fortunes are at stake, which view is correct – which view is fiction and which is reality? In my view, and although more upside might indeed exist for stocks prior to a reckoning (due to the lagged effects of money supply growth), the fiction that has become our reality, which is our fiat currency economy, is now hitting the wall in terms of constraints, which will be the stock market’s undoing.


The following is commentary that originally appeared at Treasure Chests for the benefit of subscribers on Tuesday, March 2nd, 2010.

That is to say, we have been living in a dream world over the past forty-some-odd years (since Nixon closed the gold window in 1971) while money supply has grown relentlessly, with equally burgeoning government, financial, and tertiary economies replacing slower growing manufacturing activities (much of North America’s manufacturing base has been exported to China), which are now facing the realities of fiscal restraints. Here, not only are we now seeing deficits of all varieties (from individuals to governments) flashing warning signs our exorbitant lifestyles are unsustainable, and in need of curtailment; but more, last year’s swoon in stocks should also be taken as a shot across our collective bow in this regard, providing an opportunity for those who choose to reside in reality a chance to prepare for changing times.

So it’s important to understand that if we are not going to do this voluntarily, where a smug bureaucracy and ruling class have decided to temp fate, the market(s) will do it for us, with not only the stock market and corporate bonds at risk, but also sovereign bonds, due to falling tax revenues, which are in turn a function of a similar internal state in the economy. So far the government has been successful in monetizing the bond market to keep interest rates down, which is turn has been supporting an over-indebted economy; however now, because prices are threatening to explode higher (signaled by gold), monetary authorities have been forced to reverse money supply growth rates, putting macro pricing structures at risk due to these Ponzi Finance measures. And the more foreigners stop buying US Treasuries (because they see the deficits as unsustainable, making US Treasuries a bubble, especially considering they are being heavily monetized), and worse, begin selling, the more this dichotomy will grow, which will in turn further destabilize prices.

What’s more, and if all this wasn’t bad enough, now, not only do we have the Working Group monetizing stock market futures and bonds on a daily basis, apparently they have also started in on direct monetization of the stock market as well, which as with the above, will add to general price destabilization potential later on. Or perhaps it will be earlier than most think, where as you should know from reading our work on the subject, once the short sellers have been squeezed out of the market, it will have a tendency to fall no matter how much money is being printed. So, in putting two and two together, along with some wildcards like a short selling ban, the picture for both stocks and bonds is looking increasingly suspect, where once US index open index put / call ratios reverse lower again, stocks would in fact be in a position for a significant downturn all things considered.

In the meantime however, according to the latest figures available, the personal savings rate is tapering off again, matched by an increase in credit growth. And as you may know a buoyant fiat currency economy is all about credit growth, where when matched with the observation the monetary base continues to power higher (due to continued monetization), albeit at a slower pace, we arrive at justification for rising equity prices at present. And of course we have seasonals, which were discussed last week, along with lags, also discussed last week, all adding up to a potential year 2000 like blow-off into options expiry here in March, or April at the latest according to Dave. The idea here then is once the lagging effects of accelerating currency stimulus has run its course, by then, bearish stock market speculators should be a puddle in the middle of the floor, removing structural sentiment related support from the market, allowing stocks to fall. (See Figure 1)

Figure 1


Speaking of monetization, and switching our attention to the BlackRock Corporate High Yield fund pictured above because of BlackRock’s apparent position in the monetization feeder-trough, which is the likely reason it’s vexing new highs while others are not, making it the ‘last man standing’ proxy, again, here we are also looking for a top within coming weeks, as denoted by the count and Fibonacci resonance related price target. Extrapolating this view into expectations for both the S&P 500 (SPX) and gold, which are positively correlate to corporate bonds at the moment (expect gold to be the ultimate last man standing eventually however), and it’s possible new highs will also be witnessed on both accounts as well, with the liquidity related considerations discussed above lifting all boats.

Unfortunately we cannot carry on past this point, as the remainder of this analysis is reserved for our subscribers. Of course if the above is the kind of analysis you are looking for this is easily remedied by visiting our continually improved web site to discover more about how our service can help you in not only this regard, but also in achieving your financial goals. For your information, our newly reconstructed site includes such improvements as automated subscriptions, improvements to trend identifying / professionally annotated charts, to the more detailed quote pages exclusively designed for independent investors who like to stay on top of things. Here, in addition to improving our advisory service, our aim is to also provide a resource center, one where you have access to well presented 'key' information concerning the markets we cover.

And if you have any questions, comments, or criticisms regarding the above, please feel free to drop us a line. We very much enjoy hearing from you on these matters.

Good investing all.

By Captain Hook

http://www.treasurechestsinfo.com/

Treasure Chests is a market timing service specializing in value-based position trading in the precious metals and equity markets with an orientation geared to identifying intermediate-term swing trading opportunities. Specific opportunities are identified utilizing a combination of fundamental, technical, and inter-market analysis. This style of investing has proven very successful for wealthy and sophisticated investors, as it reduces risk and enhances returns when the methodology is applied effectively. Those interested in discovering more about how the strategies described above can enhance your wealth should visit our web site at Treasure Chests

Disclaimer: The above is a matter of opinion and is not intended as investment advice. Information and analysis above are derived from sources and utilizing methods believed reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Comments within the text should not be construed as specific recommendations to buy or sell securities. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities, as we are not registered brokers or advisors. Certain statements included herein may constitute "forward-looking statements" with the meaning of certain securities legislative measures. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the above mentioned companies, and / or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Do your own due diligence.

Copyright © 2010 treasurechests.info Inc. All rights reserved.

Unless otherwise indicated, all materials on these pages are copyrighted by treasurechests.info Inc. No part of these pages, either text or image may be used for any purpose other than personal use. Therefore, reproduction, modification, storage in a retrieval system or retransmission, in any form or by any means, electronic, mechanical or otherwise, for reasons other than personal use, is strictly prohibited without prior written permission.

Captain Hook Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in