I was away from my computer during the recent market unpleasantness, but that is probably a good thing.
Because, at no time did I think that this was "the big one."
Indeed, the need for a short sharp drop was obvious, if for no other reason that to give the market masters a chance to build in some "inventory."
The big run in bonds was interesting though.
Could the BOJ know something that we don't?
Well, it's very possible that the US economy is alot weaker than the US media is willing to admit. And the BOJ knows this!
JOBS ARE SIMPLY A DISASTER IN THE US, AND THAT IS NOT, I REPEAT NOT, GOING TO CHANGE ANY TIME SOON.
SO, MY SCENARIO WHEREIN STOCKS, BONDS, GOLD AND OIL ALL GO UP AT ONCE IS STILL INTACT.
PROVIDED HOWEVER, ONLY AS LONG AS THE DOLLAR CONTINUES DOWN!
How so?
OK, punk jobs forever mean low rates forever, right? Humor me, OK, yes!
And, that means the US bond could go up even more, perhaps a lot more.
Indeed, I would bet that Mr G's next big move will be to LOWER RATES, NOT RAISE THEM!
ALL GOOD FOR BONDS! EVEN NOW!
As punk as all this gloom is for the economy, and the stocks that float above it.
IT DOES NOT DOOM STOCKS PER SE! Why? Well, stocks only reflect the economy is a relative sense. Relative to what is the real question, and I say the answer is real interest rates.
SO STOCKS WILL RISE IN THE COMING DOWN ECONOMY, BECAUSE INTEREST RATES WILL BE SO LOW!
It's that old "no where else to go" argument yet again.
But, as stocks go up, the dollar continues down, so net-net to the outside observer, US stocks are going nowhere!
And, with all of the liquidity tied up in the financial markets, very little inflation is possible;
With the exception of our beloved asset inflation and alas, that does include Gold and Oil, sooner or later. Mr G is hoping for later!
HENCE, THE RECENT UNPLEASANTNESS WAS NOTHING TO WRITE HOME ABOUT, OR EVEN TO WRITE ON THIS BOARD ABOUT!
And, have a nice day.......
