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It's Never Different This Time - 1987 or 2014?
While the price analogs of the last few year's exuberance in US equity markets are enough to worry all but the most systemically bullish "believer"; we suspect the following article from the LA Times In the Spring of 1987 will raise a few hairs on the back of the neck of perpetually optimistic extrapolator...
It's never different this time..
"One of the largest bullish factors is burgeoning worldwide liquidity, thanks to expansive monetary policies by central banks. That has helped fuel a surge of foreign investing that could propel US stocks higher, regardless of what happens to the American economy, some analysts say...
Low interest rates also help stocks by making Treasury securities, certificates of deposit and other interest-paying investments less attractive. The sluggish economy, meanwhile, keeps the Federal Reserve from driving up interest rates and prevents inflation from overheating...
Also, the sluggish economy--by keeping manufacturing rates low--discourages money from flowing out of financial assets into such investments as factories and machinery."
- LA Times, March 8, 1987; a few months before the October 1987 crash
Read that again!!
Never different.
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In 1987 the world’s capital markets were for the most part still allocating capital efficiently, in keeping with the laws of supply and demand. So, a crash is all it took the clear the markets and growth began again after the crash. Today capital markets have been destroyed. All laws before congress are for the purpose of rigging one market or another. Stimulus has actually been going on, nonstop for several decades. And, all stimulus really is, is wealth redistribution. The situation is much more dire than it was in 1987. Everyone is used to it and that makes it even worse.
http://curbsidejimmy.com/new_music_for_the_hard_times_coming.htm
Maybe this time around will be different--instead of Japanese it will be the Chinese who are buyers of US equity.
Printed money goes into things that the population cannot see and appreciate I.e equities. As long as this 'inflation' does not impact the common man the printing and asset accumulation will continue. There is no downside since any selling is absorbed by buying with printed cash. And all in the name of helping the 'recovery'.
At some point in time the banks will own the bulk of America, all acquired with money they printed and as they own the MSM, who will dig deep enough to expose the fraud? They are loaning to big monopolistic businesses, not small business. They will end owning these businesses and the chrory consolidation will continue, buyouts and financed buybacks also grow with fewer and fewer owning more and more .... All with the money they PRINT.
It is same this time ... A few win and many lose
Sorry, but...
Yes, it is different this time.
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How is it different? This time the federal government has such enormous debts and obligations that... interest rates cannot be raised significantly. So the federal reserve WILL hold interest rates near zero indefinitely. And the federal reserve will buy ALL government bonds if necessary, without limits, if and when they must to hold interest rates near zero.
And so, while financial assets may suffer short-term meltdowns from time to time in response to emergencies, the federal reserve and cronies who get money for free will spew as many million, billion, trillion, quadrillion dollars into the financial markets as necessary to keep those charts rising towards the upper-right corner.
The model in the USSA is the model in Japan is what the model in Zimbabwe was.
The only question is when, not if. Since the actions of the federal reserve, central banks and federal governments are positively DESTROYING the creativity and efficiency of all western economies, those economies are in the process of spiraling down into the toilet. This is a strong deflationary force, which gives the predators-that-be cover for creating and spewing ever more fiat into the pockets of their owners and cronies (and hence the financial markets), and has kept inflation from going completely off the charts for a few years now.
But this behavior is making the fake (financial/government) economy is bifurcating from the real (physical/productive) economy with ever greater force, and so the connection will soon be completely broken. Remember, the stock market in Zimbabwe went up, up, up into outer space... while the real economy and quality of life went down the tubes.
The USSA and entire western world (and somewhat beyond) will soon be the new Zimbabwe. You can count on it. The train is headed down a steep hill, and the brakes don't work. No turnaround is possible at this point. Kiss your butts goodbye, all you who refuse to get outta dodge and hide out some place in the [extreme] boonies of some out of the way no-mans-land.
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PS: Which is to say, it is different this time... different from previous market crashes in the USSA.
PS: Which is to say, it is not different this time... not much different from the nefarious histories of Zimbabwe and Weimar Republic.
Still the expected crash only brings it back to 2012 levels. Who thinks that things were correctly priced then?
Yes, it is different this time because the scales are off on that crappy graph. In the 80s stocks tripled, now they've doubled (from a disasterous crash).
FFS this is another in a long, long line of misrepresentative articles on this website. Remember "Buy Silver, Bitches!" and "The Crash of '29 Redux!". All utter, utter, utter, UTTER BS.