-- Posted Tuesday, 12 October 2010 | Digg This Article
| | Source: GoldSeek.com
Rick’s Picks
Tuesday, October 12, 2010
“Phenomenally accurate forecasts”
(Our far-flung correspondent Erich Simon say’s he’s ready to throw in the towel on his short-the-world stock portfolio, for which he has used the shares of Best Buy as a proxy. He is starting to see massive, inverted head-and-shoulder patterns forming in the Nasdaq, and maybe even the Dow. A hallucination, of course. Or is it? In the commentary that follows, we’ve allowed Erich to vent frustrations that some readers will undoubtedly share. RA)
Are stocks in a short-lived sweet spot engineered to coincide with next month’s elections? Or is there something much bigger in store: a Megabull market engineered by the Fed and Wall Street that will run for years? And don’t discount this possibility merely because the economy has been so weak. After all, in the last two decades, free markets have gone into eclipse and now serve not the public, but Masters of the Universe who seem able to manipulate prices any which way they choose, regardless of “fundamentals.” It’s also possible we’re at the point of global saturation, where there are not enough investible resources to satisfy demand. And the government is not exactly a neutral bystander any more (not that it ever was). The U.S. has taken an increasingly active role in propping up key stocks — and even the broad averages, if you believe all those stories about the Plunge Protection Team.
I don’t recall exactly where the trendline from the dot-com bust comes in these days, but it’s somewhere around Dow 12800. The Industrial Average is trading now around 11000, but if it were to push past that trendline, you can be sure that some gurus would be making hay with predictions of Dow 36000. Actually, they wouldn’t be the first, since there’s a book out with the title “Dow 36000”. It was published in 2000, and although it’s considered something of a classic of wrong-headedness by many who have reviewed it on Amazon, I’m not aware that the authors, James Glassman and Kevin Hassett, ever retracted their prediction, Perhaps their day will come? If so, shorts will go the way of the dodo bird.
New, Improved Dollar?
With stocks headed to the moon, a vaporous dollar would collapse. But it wouldn’t matter, since the dollar is no longer a store of value; rather, it is more like an entitlement coupon, like food stamps (which are currently used by more than 40 million Americans). But don’t count the dollar out. The basis for its resurrection, from mirage to hard money, may be in the offing, plotted behind closed doors over the last ten or twenty years. The Fed would commandeer the U.S. credit markets, which they already have to a large degree. Is this our economic future?
Imagine the nationalization of…everything: a world where we all get microchip implants and fall into line. Scary stuff, for sure, but at some point The Government is going to have to reign in the autonomous, disenfranchised and socially disintegrating masses before all control is lost. But if the Dow is trading at 36000 then, you can be sure the mainstream media will be telling us that life in America has never been better. The odd thing is, most of us will probably believe it.
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Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. There is a substantial risk of loss in futures and option trading, and even experts can, and sometimes do, lose their proverbial shirts. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2010, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted Tuesday, 12 October 2010 | Digg This Article | Source: GoldSeek.com
