Monday, October 22, 2012


Now let's step back for a moment and try to get a grasp of what is going on and where we are WITHIN the SECULAR (long term) cycle. DO read the link to Adam Hamilton's article above.

This is a sideways GRIND, stocks are lower than they were 12 yeasr ago. We are long in the tooth for cyclical bull trend and near the 1500 topping zone. 2 X we have bottomed near 750 SPX the bottoming zone, where do YOU want to put money to work? Near the topping area? knowing the bull is 43 months old? YES that's what THEY want you to do.

ALL THE QE infinitty talk is to help establish that "stocks can't do down" and one FOOL on CNBCBS quipped "there will beno 200 pt declines", well he's a liar already.

OK, so if history means anything, we know that PE ratio is now at 19.8 (per Adam's piece), and we also know that SECULAR BEARS end between 6-7 PE ratio. IS this a good place to buy based on that?

Have we returned to some kind of norm? Is the economy reset? AS you can see from the 2 charts above, the CREDIT BUBBLE has barely begun to correct, or do you believe what happened in 1929-1950 won't repeat?

The move to our current CREDIT DEBT BUBBLE HIGH is far greater % wise than in 1929 and it has barely begun to adjust, retreat. If we are doing so well, if QE worked so well, why did the FED just call for QE 3 to infinity? WHAT imbalances are being aggrevated because of these actions?

A BELL may not go off, to warn you that the next phase of this SECULAR BEAR
 (usually lasting 16-17 years) has begun. OR maybe you think like some that history won't repeat and it will be different this don't know JACK as they say....or JAck don't know squat...

We have the fiscal cliff ahead of us, we have Bush tax cuts probably ending, calls for Cuts in Federal spending, we still have the government debt growing at over $1 Trillion a will this all end?

Do we have a government debt bubble and will it burst? We better hope it doesn't burst, because we know we have one.

From DR MArc FAber
One day, the system would break, he said.
"Eventually you have either huge changes occurring in a peaceful fashion through reforms, or usually through revolutions," he said. The U.S. was getting closer to such a revolution, he said, as was Europe.
"I think the timeframe would be within five to ten years you have a colossal mess... everywhere in the Western world," Faber said.
"I think the deficit here (in the United States) - irrespective of who is in the White House - will stay above a trillion dollars per annum for at least as far as the eye can see," Faber said.

Bureaucracies in the U.S. as well as Europe were far too big, he said, and were a burden on the economy.
"My medicine for the U.S. is: reduce government by minimum 50 percent," he said. "The impact would be immediately an improvement in the economy."


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