WITH THE FED "PUT" OF QE3 PROVIDING A FLOOR...
AND THE ECONOMIC DEPRESSION PROVIDING A CEILING...STOCKS ARE MOSTLY RANGE BOUND FOR THE FORESEEABLE FUTURE...
EVERYONE KNOWS THAT THE FED WILL NOT TOUCH INTEREST RATES UNTIL GAS HITS $5 PER GALLON IN THE US...ONLY THEN WILL PANIC SET IN...
THE NOTION THAT HYPER LIQUIDITY CAN CONTINUE FOREVER IS BEING TESTED...THIS IS REALLY THE ULTIMATE TEST OF SUPPLY SIDE THEORY...
VIRTUALLY NOTHING IS BEING PROVIDED TO CONSUMERS AND ORDINARY PEOPLE...ON THE DEMAND SIDE.
AND EVERYTHING IS BEING PROVIDED TO CORPORATIONS...ON THE SUPPLY SIDE.
THIS IS REALLY THE ULTIMATE TEST OF SUPPLY SIDE THEORY...
WILL JOBS COME BACK BEFORE HYPER INFLATION KICKS IN... THAT IS THE BIG TEST...THE BIG ISSUE...
IT MAY BE A FEW YEARS BEFORE ANYTHING IS DECIDED...
OIL PRICES ARE THE KEY TO EVERYTHING... CAN YOU INFLATE PAPER ASSETS...WITHOUT INFLATING OIL...AND OTHER HARD ASSETS...
THEORY WOULD SAY NO... BUT SO FAR...THEORY HAS NOT SHOWN UP IN THE REAL ECONOMY...
MOST PEOPLE HAVE A SENSE THAT THIS IS NOT GOING TO END WELL...BUT TRADERS ONLY THINK VERY VERY SHORT TERM...SO ALL IS HAPPY TALK FOR NOW...
