It is possible to create an “eye” in this storm of economic and financial crisis.

It happened in the Great Depression. There was a few years of up market before it went down again although not to the previous low

http://www.dogsofthedow.com/dow1925cpilog.htm

What didn’t really go up was unemployment enough to stimulate spending and thus profits. So, don’t think the market can’t go up and go up for a long time. I don’t believe that is the same case this time, as there are a lot of differences this time, especially what the FED is doing to the dollar but, don’t bet it can’t rise on hope longer that it should.

I was just listening to an analyst in Asia and he had nothing good to say about what the FED is doing to the dollar. The problem is trying to “time” when inflation will hit. It won’t be due to U.S. demand in all likelihood. It will be more on what other nations do with the dollar and that is what is what this analyst said too. It is not a timeable event that you should be trying to trade on at this time. He just says, avoid the dollar.

Again, even though my personal view at this time is that the dollar will be at great risk later this year or in 2010, that could be years off and we could be in this eye of the storm for awhile.

But, we still have the entitlement crisis that is now morphing with this crisis with Medicare cash flow negative and S.S. due to be later this year or next. That means all loans from those trust funds which amounted to trillions over the decades, are no longer available for “off budget spending” and now we have to borrow to pay for any negative cash flow.

We still have years, the President said of massive deficits where even cutting in half, still means a $600 billion deficit and that is based on unemployment peaking at 8.1% which we have already passed. We still have years of monetizing debt since there isn’t enough money to lend us in the quantity we want.

As the Asian analyst said tonight, we may not be able to time it but, inflation is coming due to that monetizing of debt and printing money we can’t borrow. Yield rates would seem to indicate a lack of buyers but, a crash in the market might drive people back to bonds.

Be very, very careful both up and down and stay alert for trends developing that our media doesn’t pass on. For example, I have heard virtually nothing here about most of the moves of nations away from the dollar you find in foreign news sources.

Related Posts:

• Something we have to think about in this rally and comments about a bottom.
• You can have great profits in inflation if you are in control of when it happens.
• While we are in a depression, don’t confuse that with what the market will do.
• G20 leaders are no longer in control of what will happen.
• The solutions have been provided but, nobody likes them because they cause a depression.

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