"Boom Or Bust?"
Also, if stock dividend yields avg around 2%, Treasuries 3.9%, and the FED funds rate is 3% and rising.........it is OBVIOUS stock yields are STUCK near historic lows, and do NOT entice investors.
What must happen is some how or another the AVG SPX dividendd yield must rise to near 6%, to accomodate the risk involved in holding stocks.
I read an article where this is close to happening in Japan. We have in an odd sort of way accomodated the world's excess savings by using near 80% of it. But the imabalances increase with every dollar of IOU!
D
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Michael,
Many think the transports will now play catch up with an index I post here often, the BDI which has fallen sharply from its 2004 highs.
Certainly if Transports make a new low, the Dow must follow per Dow Theory or we would have a non confirmation.
A sharp move down in gold, IMHO would usher more chance of deflationary action.
D
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