Few reasons for this bull market to continue for a little while
* the companies' reports for the 4th Q will be here shortly. i see those reports strong enough to make investors forget the fiscal cliff show for a little while and to push the markets a bit higher in the short run.
* i'm expecting to see new news about Iran and how Israel is about to invade it for things Iran's never done. this is, naturally, bullish for oil and consequently - inflationary for currencies.
* some minor factors are the QE3 that nobody is going to stop until God knows what time. it's pretty much impossible to stop it... labor market will continue to "improve" as more and more people leave the US and thus there are less jobless applications.
* Greek, Spanish and Italian bonds are on the rise (and % is falling) and that is still a bullish sign. but this will not stay this way for long...
now the big question that everybody is always afraid of answering - how long before we crash? and will we in fact crash? i believe we will and i believe we'll do so in a very ugly manner. and that manner is DEFLATION. some analysts think we are about to head into INFLATION, even a hyper one, but that is not the case. not yet at least. i think we're headed into a severe world wide deflation as the reason for the collapse will be the DEMAND factor. there is going to be less and less demand for secondary products and eventually it will jam the Chinese manufacturing - the biggest one in the world. why would it get jammed? because the EU is not doing any better. the ultimate contradiction b-n the EU countries is the law on currency - it is impossible to regulate the inflation-deflation mechanism when you constantly risk blowing one country to the state of a balloon at an expense of getting the money supply just about right in other countries, such as Spain. it is also impossible to "ease" due to the same reason. plus there is another huge reason - the FED who won't let Draghi do anything with the euro, not even inject it without sterilizing or bring down the interest rates...
so how long is this going to last? my prediction is that we should see a major move in the 1st Q of this year. reasons, again, are numerous - all the way from slowing demand to the problems in the EU to the debt problems in the US. the US is actually a very interesting case. on one hand there's been so much money printed! but on the other hand - it wasn't just printed - it was all BORROWED. and when somebody like Ben lends you the money he will want it back and not without an interest... the % alone in the US is 3,3 trillion dollars! this is out of the 16,4tr national debt. and all it will do is escalate.
are you still questioning the Debt Ceiling issue?! well you can stop worrying about it because as of now the US debt limit has been breached by... wanna guess?! - 17BILLION dollars already...
so lets get back to the basics here - inflation is the oversupply of money. well guess what - there isn't any money in the system. all those QEs were printed and went strait to the stock market and the bond market and bubbled both of them once again. look at the returns on the US bonds - it's ridiculous. look at the S&P index - it's pretty much at the 2008 pre crash levels. yet look at the housing - slow like dead turtle. look at the oil prices and compare them to what they were in 2006. the only 2 actives that are acting reasonable are gold and USD. USD is on the rise already and gold is being dumped. who's dumping it? i have a theory that it is the US who does. the US need money to pay its debts! and there is no money - thus the demand for USD. how do you get the legal means of trade (which is not gold) - you sell what you have, and it happens to be the bubbled gold. that is why it is dropping - we have a big supplier who wants to get rid of it...
so despite what you've been told about USD and GOLD and how first is not "backed up" by the second - USD is probably the best investments there is right now. and short positions in banks, minors, tech, you name it...
thanks for reading.
copies are always printed in my blog - http://doncutlass.blogspot.ru/
* the companies' reports for the 4th Q will be here shortly. i see those reports strong enough to make investors forget the fiscal cliff show for a little while and to push the markets a bit higher in the short run.
* i'm expecting to see new news about Iran and how Israel is about to invade it for things Iran's never done. this is, naturally, bullish for oil and consequently - inflationary for currencies.
* some minor factors are the QE3 that nobody is going to stop until God knows what time. it's pretty much impossible to stop it... labor market will continue to "improve" as more and more people leave the US and thus there are less jobless applications.
* Greek, Spanish and Italian bonds are on the rise (and % is falling) and that is still a bullish sign. but this will not stay this way for long...
now the big question that everybody is always afraid of answering - how long before we crash? and will we in fact crash? i believe we will and i believe we'll do so in a very ugly manner. and that manner is DEFLATION. some analysts think we are about to head into INFLATION, even a hyper one, but that is not the case. not yet at least. i think we're headed into a severe world wide deflation as the reason for the collapse will be the DEMAND factor. there is going to be less and less demand for secondary products and eventually it will jam the Chinese manufacturing - the biggest one in the world. why would it get jammed? because the EU is not doing any better. the ultimate contradiction b-n the EU countries is the law on currency - it is impossible to regulate the inflation-deflation mechanism when you constantly risk blowing one country to the state of a balloon at an expense of getting the money supply just about right in other countries, such as Spain. it is also impossible to "ease" due to the same reason. plus there is another huge reason - the FED who won't let Draghi do anything with the euro, not even inject it without sterilizing or bring down the interest rates...
so how long is this going to last? my prediction is that we should see a major move in the 1st Q of this year. reasons, again, are numerous - all the way from slowing demand to the problems in the EU to the debt problems in the US. the US is actually a very interesting case. on one hand there's been so much money printed! but on the other hand - it wasn't just printed - it was all BORROWED. and when somebody like Ben lends you the money he will want it back and not without an interest... the % alone in the US is 3,3 trillion dollars! this is out of the 16,4tr national debt. and all it will do is escalate.
are you still questioning the Debt Ceiling issue?! well you can stop worrying about it because as of now the US debt limit has been breached by... wanna guess?! - 17BILLION dollars already...
so lets get back to the basics here - inflation is the oversupply of money. well guess what - there isn't any money in the system. all those QEs were printed and went strait to the stock market and the bond market and bubbled both of them once again. look at the returns on the US bonds - it's ridiculous. look at the S&P index - it's pretty much at the 2008 pre crash levels. yet look at the housing - slow like dead turtle. look at the oil prices and compare them to what they were in 2006. the only 2 actives that are acting reasonable are gold and USD. USD is on the rise already and gold is being dumped. who's dumping it? i have a theory that it is the US who does. the US need money to pay its debts! and there is no money - thus the demand for USD. how do you get the legal means of trade (which is not gold) - you sell what you have, and it happens to be the bubbled gold. that is why it is dropping - we have a big supplier who wants to get rid of it...
so despite what you've been told about USD and GOLD and how first is not "backed up" by the second - USD is probably the best investments there is right now. and short positions in banks, minors, tech, you name it...
thanks for reading.
copies are always printed in my blog - http://doncutlass.blogspot.ru/