A 40 year, annual chart, shows the nature of the stock market bubble, picture a matching chart in the housing bubble.
By Daniel at 29 July, 2009, 9:36 am
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The market began to go haywire in the early Clinton years and bubbled completely from there. The long term price of the DJIA is about 6800.
We are working out an H&S pattern on the yearly charts that will not achieve normalization until sometime after 2020. Momentum on the long term charts has yet to achieve a negative value. It is just now settling down to the momentum levels of the 80’s. Odds are better than 85% we will experience negative momentum for a few years starting with the year 2010 and going forward for 3-5 years.
I know the optimists’ hate to consider these possibilities but the forces of nature (the laws of economy) are more powerful than all the optimism or pessimism of any group. No nation can ever be immune from the ravages of valueless paper money (even when paper is gone and it is all computer blips).
No, the true pain of the foolishness of monopoly printing has not yet emerged. Economies do not crash overnight; economies as large as Americas cannot complete a cycle in one year. We have had a 30 year build up to the top of the money bubble. We will spend this year and the next five years working off the excess of the bubble. That is without actually producing anything remotely resembling an undervaluation of the stock market, but there will be massive unemployment. The completion of this scenario will do no more than correct the valuation by wiping out the fluffed valuation of the dollar; which by the way has just now entered the endgame cycle of expansion. Numerous money supplies are being inconceivably inflated in an attempt to slow the collapse of the worldwide bubble. A game which has been played to disaster many times before by many nations. It’s a game that cannot be won.
A myopic view of the day to day market totally misses this bigger game being played out. Obama will simply be the last man standing when the music stops. But then he doesn’t need a chair. He is drinking beer with his buddies, txting in traffic, and believes he’s a contestant in the newest reality show, “Who can spend a trillion dollars in a day”? Will it be the Saudi Oil King? The Walmart Shoppers? Or the first U.S. President without a country?
Kprime
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