THE BUSINESS OF THE US ECONOMY IS ASSET INFLATION...
NOT PROFITS. NOT JOBS. NOT WAGES. NOT PRODUCTION. NOT EXPORTS. ONLY ASSET INFLATION...
WITH SOLID ASSET INFLATION IN PLACE...FOR STOCKS OR HOUSING OR WHATEVER..."COLLATERAL" IS THUS PROVIDED FOR CREDIT EXPANSION...
CREDIT EXPANSION IS THE SOLE SOURCE OF US ECONOMIC "GROWTH" NOW. THE US ECONOMY BEING A "POST-INDUSTRIAL" "POST-PRODUCTION" ECONOMY ...WHATEVER THE HELL THAT IS!!
THE US ECONOMY IS NOW BACK IN BUSINESS BECAUSE OF WASHINGTON'S MASSIVE "INJECTIONS" OF DOLLARS INTO THE "PAPER ASSET" SYSTEM...
THE OPERATIVE BELIEF BEING THAT ONLY MORE PAPER CAN SUPPORT PAPER...! WE ARE IN EFFECT THROWING GOOD PAPER AFTER BAD... AT LEAST UNTIL THE FOREIGNERS "WISE UP."
ASSET INFLATION CAN NOW CONTINUE APACE... INDEED THE DEMAND FOR THE DOLLAR IS HIGH AS SUCKERS AND PLUNGERS RACE BACK INTO STOCKS...SO AS NOT TO "MISS THE BOAT."
THE REAL ECONOMY IS DAMAGED...BUT IT HAS BEEN FOR YEARS...PERHAPS DECADES AS THE MIDDLE CLASS DECLINE CONTINUES...
SADLY THE MIDDLE CLASS IS FLOCKING TO MCCAIN NOW...AND THAT WILL ONLY CONTINUE THE DECLINE OF THE PAST DECADES....
WHAT HAS TO BE REMEMBERED IS THAT THE US ECONOMY DOES NOT REALLY PRODUCE ANYTHING...HENCE THE TRADE DEFICITS...
SO THERE WILL ALWAYS BE A TOP ON HOW FAR THE ASSET INFLATION CAN GO...
THE KEY IS TO AVOID COMMODITIES INFLATION...BECAUSE COMMODITIES ARE ALSO AN "ASSET CLASS"....THAT THE "RICH" CAN INVEST IN...IF OTHER THINGS LOOK PUNK.
THE RUN UP IN GOLD AND THE DECLINE OF THE DOLLAR EARLIER THIS YEAR WERE THE REAL HARBINGERS OF THE RECENT CRASH...
EFFORTS WILL BE MADE TO BASH GOLD...AND THEREFORE OIL...DOWN AT ALL COSTS....
THAT IS THE ONLY WAY THE INFLATION IN "OTHER" ASSET CLASSES...LIKE STOCK AND REAL ESTATE CAN CONTINUE...
CAN THE FED AND WASHINGTON HERMETICALLY SEAL PAPER ASSETS OFF FROM REAL ASSETS...?
WELL THAT IS THE BIG QUESTION... THERE HAS BEEN MASSIVE MONEY PRINTING INJECTED DIRECTLY INTO THE WALL STREET BANKS...IN HOPES THAT THEY CAN CONFINE THAT MONEY TO THE PAPER ASSET MARKETS....
ANY "SLOSH OVER" INTO COMMOIDITIES...AS THIS SUMMER WILL QUEER THE ENTIRE DEAL...
MY HUNCH IS THAT THE MARKETS ARE SAFE NOW...BUT RANGE BOUND...SORT OF ON PAROLE OR PROBATION...
STOCKS ARE ON AN ELECTRONIC TEATHER NOW....THE FED AND WALL STREET WILL HAVE TO AVOID THE GROSS EXCESSES OF THE LAST FEW YEARS...AND WATCH COMMODITIES DAILY...
I THINK IT'S A TEMPORARY FIX...AND IT WILL ALL COLLAPSE AGAIN IN ABOUT SIX OR EIGHT MONTHS...PERHAPS IN THE SUMMER OF 2009.... SO THIS IS A GOLDEN OPPORTUNITY TO DUMP PAPER ASSETS AND GET INTO DEPRESSED GOLD AND OTHER HARD ASSETS...PERHAPS EVEN DISTRESSED REAL ESTATE ON A CASE BY CASE BASIS.
WHY?
WELL YOU WILL HAVE NOTICED THAT NONE OF THE UNDERLYING PROBLEMS ARE AS YET EVEN MENTIONED...
DE-INDUSTRIALIZATION, IE THE COLLAPSE OF THE MANUFACTUING SECTOR CONTINUES APACE... THE TRADE DEFICITS....THE BUDGET DEFICITS...
AND THE ODD "HOPE" THAT A DECLINE IN CHINA WILL TAKE PRESSURE OFF OIL...EVEN THOUGH THE DOLLAR IS MORE RELATED TO OIL THAN ANY USAGE OF OIL IN CHINA ....
SO WELCOME BACK TO LALA LAND...
ENJOY...!
P.S. AND YES THE NEWS THAT MCCAIN IS SURGIN' IN THE POLLS HAS HELPED!
