WHAT GOES UP....MUST COME DOWN!

Doug Noland's Crdit BUbble Report VERY DETAILED credit report for those NOT familiar with Doug over at Prudent Bear.

Russell explained last night how like in 2000 (bubble top) where the holdings of stocks etc were 140% of GDP now SO IS HOUSEHOLD REAL ESTATE HOLDINGS! just a coincidence? or MORE PROOF to suggest we have replaced ONE BUBBLE with another?

WHat does this mean? It means that CREDIT EXPANSION MUST CONTINUE, it is ESSENTIAL to the ongoing reflation. OR IMHO it all IMPLODES.

Week of FEB 24th M3 grew an ASTOUNDING $45 Billion.

30% of home purchased are now either 2nd homes or for speculation! 30% of homes bought are also mortgaged with ARMS.

Over 80% of first time home buyers don't put down 10% !

REAL ESTATE has replaced STOCKS as the investment du jour.

HOUSING is FAR LESS LIQUID than stocks, a CRASH scenario has been born IMHO because of the excesses and lack of liquidity should SOMETHING set a tumble in home values in motion. NO ONE sees that as possible.

Is REFINANCING at the end for providing spending capital? The endless "take cash OUT of your home"? A BAD IDEA EVER IMHO

From Dr Richebacher "A bubble economy implies by definition that skyrocketing asset prices have prompted immoderate borrowing and spending binges in consumption and/or capital investment."

The US has NO SAVINGS. WE borrow almost 80% of the world's savings. BORROWING has been for CONSUMPTION NOT INVESTMENT.

NOW we have the year of MERGERS and ACQUISITIONS, not productive, destructive and these usually COST JOBS.....they PRODUCE NOTHING> isn't that how 2000 ended in a take over mania?

SURELY stock prices can go higher, but I argue this rise is based on NOTHING more than FED induced liquidity of HISTORIC PROPORTIONS, and that it has NOT grown a sustainable economy based on the distortions in savings and investment.

And so unfortunately it WILL end rather badly, and I choose NOT to chase stocks nor real estate, and look not of greed but to capital preservation.

If I was to buy a CD for 5 years paying 4% or more, if I held for that period, at least I know what I have.

MANY have told me they cannot afford to make such a piddly amount. Perhaps, but can they afford to LOSE should this unsustainable GAMBIT abruptly end?

Duratek