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Turkey Week
It's Phil v. Others. Is there a rational argument for taking a bullish position (even if it's still a waiting game short-term)? Here are a few views, including some of Phil's logic regarding a new wave of hyperinflation which is a counter force to the Elliott Wave trajectory and the current trend. ~ Ilene
Turkey Week
(excerpt from Stock World Weekly)
Bearish sentiment is currently running strong in the community of financial analysts. Jim Rogers recently remarked, “We’re certainly going to have more crises coming out of Europe and America; the world is in trouble. The world has been spending staggering amounts of money that it doesn’t have for a few decades now, and it’s all coming home to roost.” He then warned that the crisis will be much worse than the one experienced in 2008: “Last time, America quadrupled its debt. The system is much more extended now, and America cannot quadruple its debt again. Greece cannot double its debt again. The next time around is going to be much worse. In 2002 it was bad, in 2008 it was worse and 2012 or 2013 is going to be worse still. Be careful.” (100% Chance of Crisis, Worse Than 2008: Jim Rogers)
Bloomberg quoted Pimco’s Mohamed El-Erian saying that U.S. economic conditions are “terrifying” and that the odds of the U.S. slipping back into recession are as high as 50%. “We have less economic momentum than we thought we had and we have no policy momentum. What’s most terrifying, we are having this discussion about the risk of recession at a time when unemployment is already too high, at a time when a quarter of homeowners are underwater on their mortgages, at a time when the fiscal deficit is at 9% and at a time when interest rates are at zero.” (Pimco’s El-Erian Says U.S. Economic Setting ‘Terrifying’)
Stock trader Allan of AllanTrends took a similarly bearish stance on the stock market based on his technical analyses - Elliott Wave analysis and trend analysis. He wrote, “IWM leads this Weekend Commentary because it generated a preferred wave count, the first of the major indexes to do so in their weekly models, and because of the dire implications of that count. The Wave 5 target for IWM is under 30. That is over a 50% decline in the Russell 2000, which would pretty much extend to all other indexes... The trends are all down, which the Elliott Wave count confirms, Europe confirms, the financials confirm, Iran confirms, MF Global confirms, shall I go on? If you’re in the business of gambling trading, these opportunities are few and far between, but are not slam dunks by a long shot. Nonetheless, this one is here now. Govern yourselves accordingly.” (New World Disorder)
All the doom and gloom in the headlines makes it easy to miss news like Wednesday’s report from the Association of American Railroads which showed gains in weekly rail traffic. Weekly rail traffic was up 1.1% compared to the same week a year ago. There was also a report from the American Trucking Associations showing that truck tonnage increased 0.5% in October, on top of a 1.5% increase in September.
Of course, there are serious problems needing resolutions. The continuing European Black Debt drama appears to be coming to a head, with yields on various bond issues climbing rapidly higher. On Friday, Phil wrote, “Rates WILL go higher – they have to. At a certain point, there’s simply not enough money to lend to cover everyone’s debt rollovers. The only way for countries to cover their debts is to either A) Find more people to lend money to them (possibly by raising rates to attract more cash) or B) Print more money.
“'A' is hard, because we’ve kind of already tapped out all the lenders, and now we can only take money out of stocks or commodities, but then we will exhaust those as well, and it doesn’t matter how much interest you offer – all you are doing is competing for money that someone else needs to borrow. Clearly, if one Nation collapses, we’re all screwed, so what good does it do us to offer 8% when Europe offers 7% if all we accomplish is bankrupting Europe? (Click here for a great chart of ALL THE MONEY IN THE WORLD)
“That leaves B – PRINT MORE MONEY – and we’re already doing that, of course. But now we have to give some to the poor people as well, through wage increases and stimulus, to kick-start the flow of money – which will make more money available for our Government to borrow.
“THAT’s my bullish premise – it’s very simple, no one is going to let the World end. In the end, our leaders will do what they have to do to keep things going, and what they have to do is lead us down the path to hyper-inflation, which will allow all debts to be paid – albeit with money that is worth less (worthless) - but we will avoid all the messiness of default and placate the masses by handing out raises and bonuses that they’d better spend fast or it will melt, and banks will pay a reasonable rate of return for money saved so old people can once again live off their savings (i.e., T-Bills) and, of course, the prices of homes can once again shoot up, like they did in the 70?s and the 00’s, to make our nation’s 100M homeowners feel rich again as the homes they bought for $300,000 sell for $1M and they pay off all their debts and have $500,000 to spare, which they put in the bank at 7% and get a $35,000 annual income to supplement their dwindling Social Security payments.”
As the NYMO chart on the left shows, equities are currently well in the oversold range. For now, we are “cashy and cautious” again, staying mostly on the sidelines, keeping our powder dry and looking for confirmation of a near-term bottom before doing any bargain hunting.
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“THAT’s my bullish premise – it’s very simple, no one is going to let the World end. In the end, our leaders will do what they have to do to keep things going, and what they have to do is lead us down the path to hyper-inflation, which will allow all debts to be paid – albeit with money that is worth less (worthless) - but we will avoid all the messiness of default and placate the masses by handing out raises and bonuses that they’d better spend fast or it will melt, and banks will pay a reasonable rate of return for money saved so old people can once again live off their savings (i.e., T-Bills) and, of course, the prices of homes can once again shoot up, like they did in the 70?s and the 00’s, to make our nation’s 100M homeowners feel rich again as the homes they bought for $300,000 sell for $1M and they pay off all their debts and have $500,000 to spare, which they put in the bank at 7% and get a $35,000 annual income to supplement their dwindling Social Security payments.”
Give us a break. Are these people for real? Everybody can stop producing, pull money out of their homes, get 7% on their savings, retire and live the high life. Sure, that works... NOT. Never does nobody ask the obvious question --- who will produce the goods all us non-producers consume? Silence.
The only way a system can work for more than a short period of time, is for people to produce goods. To consume is to destroy. To produce is to create. To create improves the standard of living. To destroy reduces the standard of living. All these fancy fiat debt paper manipulation schemes are totally bogus and inherently CANNOT WORK for the reason just stated.
The sooner the entire artifice falls (and is not replaced with anything), the sooner human beings can become productive and everyone have the opportunity to achieve "the good life". Until then, the predators-that-be and predator-class win, and everyone else slides further into poverty and hopelessness... which is what the predators planned all along. A return to paper-pusher masters and overt slaves.
Chances are we won't have to wait too long to see if she is right. This print/no print issue should get resolved very soon.
That leaves C: Force mark to market. Nationalize all the banks. Split the banks up into manageable units. Eliminate the Fed. Put all the functions in the treasury. Let interest rates move to whatever the going rate is. Let home prices fall till they are snapped up. Hold the price of gold constant. Eliminate the income tax. VAT only tax. Institute tit-for-tat trading to stop the loss of jobs. Get a real energy policy. Move our troops home. Wait ... I'm getting to sound like Ron Paul.
uhnn... not quite.
'put all functions in the treasury'... sounds like 'ellen brown' kind of talk.
'hold the price of gold constant'... = price controls / central economic planning.
You're missing the biggest part of Ron Paul's economic plan.... competing currencies, UNCONTROLLED by the Fed, the treasury or any other central body. In a competing currency solution, a 1oz silver coin from the US treasry should be as acceptable as a 1oz canadian maple. Obviously the market gets to decide which of the two (or ten) types of coin they trust more (e.g. fake Chinese silver pandas would rapidly go out of circulation since no one would accept them).
at zero velocity how exactly is increasing M1 supply going to help?
at zero velocity how exactly is increasing M1 supply going to help?
*********
Exactly-what good will more printing do-they've already printed loads and the money sits in banks with hardly any inflationary effect-
Prices of essential have increased with the hot money using taxpayer bailouts to speculate in the futures market-which is actually deflationary and narrows the velocity band as money is sucked away from other spending and directed into only necessary living expenses-very little of that new money has entered the overall economy-
Phil is great for comic amusement. Bless the bulls for trying. Hope dies hard.
I stopped reading at 'Elliott Wave Analysis'.
"The Creature From Jekyll Island", by G. Edward Griffin (Top Right, click DOWNLOAD and then Download Anyway):
https://docs.google.com/open?id=0B3-C4NLkRQu7MTUwYzUxM2QtYjU1NS00N2UyLWJ...
He's still alive, and writes a newsletter: http://www.realityzone.com/currentperiod.html
"Proco viaticus ergo sum"
I am lean on an intelligent response. she swaps sides faster than a tennis ball
Damn, I said that already. Think I'm going mad;-)
I guess that is a real fact. yacht charter
ditto
Phil and Ilene are options traders trading in what they consider a range-bound market. They will be bullish now and bearish when/if we get near the 200 day moving average again. I think they're calling the bottom too early but they've been right more than I have been lately.
You can't have wages increasing in a country that has become uncompetitive in virtually everything except agriculture and is trying to compete in a global economy with a staggering output gap. Ain't gonna happen, period. Japanese and German wages have been flat for 20 years, and they are competitive in manufacturing.
Congress would have to raise the minimum wage to $20/hr, re-issue currency or mail every household a check for $20k to have any meaningful effect on inflation and wages, and that isn't going to happen. Households are hunkered down, broke, and thanks to CONgress, unable to start over financially thanks to bankster sponsored bankruptcy law reform and student loan scams. People cannot move to where the good jobs do exist because they are shackled to a home that's no longer worth what is owed. People who are 50+ can't ask for a raise because getting let go would likely result in an end to their productive years unless they want to flip burgers or work as a WalMart greeter.
The critters in DC have no idea how bad things are out there, but I see it at work when another branch gets shut down, and I see the despair on my kids' faces when we meet to have lunch or dinner, and they have jobs.
Are you fucking kidding me? How is hyper-inflating your currency not defaulting? How does Tyler let you post this worthless garbage on Zero Hedge?
The funniest thing I have ever read on this site!!!
What in god's name does ZH have except for "worthless garbage"? LOL dude; LOL!!!! This is mindless entertainment at its best young man.
You don't take any of this "End of the World" ZH staple posting seriously do you? If so, then this is the second funniest thing I have ever read on this site!!!
OK, OK. Now here is the way it is. The money supply will be increased. Wages and prices will increase along with pretty much all measures of wealth, productivity and prosperity. The US is getting ready to enter a phase of realtive prosperity, maybe even soon enough to save the Bamster. Give it another 10 years or so and this stuff will be rehashed again.
Good time my man; good times ahead. Oh and ZH will be fine. Can't sell too much sex and you can't sell too much fear. It just is the way it is.
The funniest shit I have read toady. " The US is getting ready to enter a phase of realtive prosperity, " Funded by foodstamps and welfare payments.
At the first sign of a crisis, there is always one dipshit willing to stand up and say, "Follow me, I know what I am doing." Thank you No Mas.
Default is an ugly word that gets you un-elected. Hyper inflation is like a force of nature that lets you get re-elected by promising to fight mightily against it. It's all in the perceptions of the sheeple and the politicians. Phil is right in that they will print. The questions are when and will it work (stop the plunge in the stock market). When inflation hits 20% the S&P will likely be rising at 15% and you can make a profit off our destruction with options. It would be nice if the market was fair and politicians weren't selling us out to the banksters but we don't live in that world.
They will print - when and will it work?
Hold onto your gold.
*chanting* print! print! print!
Everybody!
PRINT PRINT PRINT
DRUCK DRUCK DRUCK
Ilene, I'm in your camp. A hardy plus one for the article.
Uh... Hyperinflation is a political event, a repudiation of a currency. ...Hyperbolicze much?