ADJUSTED MONEY BASE YR/YR CHANGE. FRIDAY AM MARKET TALK

EuroZONE growth slows to a crawl

Quite dramatic right? So many are chasing the INFLATION trade, the money in the banking system is not being lent, it is being HORDED, and until it gets into the economic system, until REAL DEMAND and CONSUMPTION increases and loan demand rises......this chart argues for the definition of inflation. We aren't in a period as 70's (NO Chinese manufacturing power) of TOO MANY DOLLARS CHASING TOO FEW GOODS...we have tons of SLACK in manufacturing.

YES, in theory the FED has increased the amount of money grossly but it mostly sits idle as excess reserves, certainly should it get into economy as hoped for inflation could occur. *(they are trying to pay off yesterdays DEBTS with todays OUT OF THIN AIR NEW $'S)

The FED policies and gamble have failed, and have diverted precious resources away from where it is most needed, almost all efforts guided to financial sector and GOV debt.

Are we healing? are we past a period like 1930? or are we topping like 1930 and the worst of stock market decline is ahead of us?

Instead of Tariffs and restraint of trade as was case in 1930, we now have currency wars and Chinese currency valuations have allowed China to dominate world manufacturing.....

In this open "FREE" forum I cannot TELL you what to do, and in any case I am just expressing my OPINION on all matters and I could be dead wrong....even the best prognosticators can turn from Nostradomus to (not orig) Nostradumbass. (mostly that would be Bernanke)

Bottom Line? I am in a VERY DEFENSIVE POSTURE, I AM TAKING NO CHANCES HERE. I AM NOT CHASING YIELD NOR THE MARKET....I SEE BUBBLES EVERYWHERE, I SEE TROUBLE.

Calling a TOP especially THE TOP is difficult, I was able to do it in 2000 and again in 2007 because of the sideways movement of SPX while other things deteriorated enough to give me a signal technically and logically (real estate and banking stress).....I can smell a bubble....current situation is a SNIFFARAMA.

CHINA MKT (OUT OF BLUE?) fell 5% overnight! Worries about inflation and further measures that might be taken to stem inflation....slowdown in the Chinese economy would have ripple effects around the globe.....COULD impact commodity prices.....we will be watching carefully.

A lot of important calls cannot be made ON THE FLY and may come early, or after the fact.....better to make call in 2008 just before worst drop then wait for 2009? MY call in 2007 was as good as anyone who was warning.....and its on my site where all posts are available for inspection....YES I believe I can do it again.

FOR ME PERSONALLY......I am not LTBH in this environment of manipulation and failed policies.....stocks in general are not for me here, but that wouldn't stop me from trading for profits....day to day on a variety of areas including direction of yields. The introduction of ETF'S allow lots of options on playing either side of almost anything.

I DO NOT see VALUATIONS as ATTRACTIVE, too much emphasis is made on relation to stocks and bond yields especially when rates are forcibly held LOW. This is causing all kinds of distortions.....I have shown previous how BANK LOANS OUTSTANDING continue to DECLINE....and IMHO the Kondratief WAVE is in WINTER MODE and you must be very careful how you play this.

I think the most recent move by the FED and its assertion PUBLICALLY they are "targeting asset price reflation" is being seen as reason to buy, to be hopeful....crazy me I see it as DESPERATION and find it very troubling indeed. WHat do you get when you mix the most intervention of any Recession by FED and GOV with the weakest recovery in history? TROUBLE

Duratek