January 23, 2013 at 6:43 pm #17635
The Tepper rally has been impressive, and Tepper has made some short term money. He has made three times more than I thought he would make since 2009.
BUT, that does not mean he is right. It just means that the Central banks of the Western world have done a good job of slowing the crash, slowing down the deflation, pumping inflation to counteract the overwhelming force of deflation. They pumped in a lot of cash, script, credit, monetization and all the stuff that makes gold bugs glow with certain delight that they are right to hold gold.
I may not know how to read the charts very well, as I don’t do it very often and I am certainly no expert, but it looks to me like the US market has risen on cheap cash and DECLINING VOLUME. If price follows volume, we are due for a correction.
Because the world’s bankers are all in this scam together, it is likely that there will be a world wide decline. “Responsible” and emerging nations are incidental to the main force of deflation which will clobber everyone in my opinion.
The Fed has stuck its many fingers in every leak for years now, but the law of diminishing returns is taking over. More of the FOMC bankers resist more monetizing. The public resists taking on more debt. They are sick of it. They don’t trust it. People sense there is trouble now. Complacency is just a media hyped market lie. Every few days there is a new hype about a new monetization, Japan this week, but it ain’t working and it won’t. Ask the Spanish youth.
It may take another fifty years to correct the mistakes of the last hundred years of socialism, but I think the market will discount that situation in the very near future, 80% decline over three or four years. Tepper better change his plans. J
As the market declines, where is there any safety? Bonds? Gold? Land? Oil? Who knows, but what I do think is that the US $ is the best of the bad bunch and that as things are sold all over the world, the money will flow into the $. Slowly but surely the US $ will become the best place to hide as everything else declines (including gold) against the $. In the world of currency, the $ is the only place to go.
The President blathered about various “rights” in his recent speech. Bernanke talks in tongues. Do they know what is coming? Probably, but what can they do other than what they are doing, nothing good. At the end of such a long rally in the economy, it takes time to recognize the new direction and even longer to accept it. The change started in 2000. It’s over. We just have to face it and survive it. Long term… generations of Family Office preparation are the key. It is our watch now, our moral responsibility to not leave debts to our children, not to screw them. This is a big one. I hope we get it right.
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