New Zealand's central bank took the fall for the market crash today...
Then Bill Gross stepped in... And before that Bernanke said something harmless that spooked the market...
But no one is mentioning the Bank of China which as been under pressure to diversity it's holdings and let it's currency rise...
The fact that this wild and crazy rally in stocks has come to an end...is not surprising...that was a disaster waiting to happen.
But in the past when stocks have fallen...bonds went up...Remember...safe haven...parking money...all that?
Today there was none of it... Stocks crash...and Bonds crashed even worse.
This could be a sign that the great liquidity binge is over... Maybe Bernanke is behind it...after all Wall Street was dissing him and asking for more liquidity to keep the specualtion going for a few more weeks..or months...
And what of interest rates on credit cards...and those ARM mortgages that sunk the sub-prime markets lately... Surely that is not going to get any better after the bond crash...
The HISTORIC warning sign of a really serious equities crash is rate hikes...and weak bonds...
WHEN HISTORIANS ANALYSE THESE LAST FEW MONTHS...
MY HUNCH IS THAT THEY WILL POINT TO THE RECENT DROP IN THE DOLLAR AS THE REAL "HIDDEN CLUE" OF WHAT WAS COMING...
THE DOLLAR BROKE THROUGH 130 ON THE EURO...AND STAYED THERE VERY CONVINCINGLY...AND EVEN NOW IT'S NEAR 135...
THE WEAK DOLLAR WAS THERE FOR ALL TO SEE... AND MOSTLY IT WAS IGNORED... NOW BONDS HAVE CRASHED...AND TAKEN DOWN STOCKS WITH THEM...
BUT THE WEAK DOLLAR WAS A FLASHING RED LIGHT THAT THAT WAS THE NEXT MOVE... OF COURSE AT THAT TIME EVERYONE WAS DISTRACTED BY A STOCK MARKET THAT SEEMED TO GO ONLY IN ONE DIRECTION...UP!! A REAL HEAD FAKE...
MY HUNCH IS THAT THIS COULD BE THE BIG ONE WE'VE ALL BEEN PREDICTING FOR THESE MANY YEARS...
WHY NOW...?
WELL THE DECLINE IS OUT THERE AND EVERYONE KNOWS IT...
EVERYONE KNOWS A BIG CHANGE IN THE GLOBAL ECONOMIC BALANCE OF POWER IS COMING.
AND, THAT THE DOLLAR IS DONE AS THE GLOBAL CURRENCY OF CHOICE...
INDEED, THE FED CAN'T CUT RATES NOW FOR THAT VERY REASON...NO RATE CUTS WITH THE DOLLAR AND DEBT PROBLEM OVERHANGING THE MARKETS...
OIL WOULD SOAR...AND THE DOLLAR WOULD PLUNGE.
REMEMBER, WE "CASSANDRA'S" ARE ALWAYS WRONG...UNTIL WE ARE RIGHT...
AND WHEN WE FINALLY ARE RIGHT?... WELL...YOU KNOW...IT'S REALLY REALLY BAD....
