Quote:
Originally Posted by Slava
While its true that the central banks have used up one piece of ammunition that is hardly the end of the story IMO. There are still stimulus plans that will come to bear (and already have been adding liquidity and easing the pain).
You can take this two ways though: clearly your position is that this is the last thing that can be done, so the market can now drop to zero. The other position is that this is the last thing to be done, so now the market can begin its ascent to 20,000 and beyond!
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Funny, because I think there is a middle ground and it is called 'Japan'??
19 years of debt destruction and stagnation as rates languish around 0 and the economy looks for some sign, any sign, of a REAL reason it should start moving forward again relative to the excess of the prior generation.
But yeah, 20,000 is the other option.... lol
The biggest thing to me is that there is a cost in using any of these tools, especially the ones they have not tried yet (which is scarier because the cost is often not even fully known OR is known but is so high it is put off until last resort -- which is now). That cost HAS To be paid, whether you pay it now through the debt destruction that HAS To take place, or later through some other wealth destroying force.
Think of it this way, it is not capitalism that is holding the market at 8,800'ish it is naked socialism by the government of what was once the biggest capitalist force on earth. I am not a bear because I am against capitalism, I am a bear because I am against socialism.
To be a bull in this market is to say you believe that government knows better than the market, and that nationalization of assets is more efficient than privatization of those assets. Hard for me to believe.
Maybe you are aware of some group of socialized nations that have done a great job of producing true wealth and value for their economies? I don't. I DO know of a lot of socialized countries that have stagnating while protecting their wealthy elite at the cost of the entire middle class until an event large enough forces an eventual collapse of their domestic economy and, when they are lucky, the eventual establishment of a true open economy (usually until the cycle repeats).
Claeren.