Last week, most Daytraders had a terrible week. The Bearslaughtered them by the thousands. There was "Blood in the Streets" at thewire houses where Daytraders congregate. Did we witness the beginning of aRecession or Depression last week?
There are many sound reasons for betting on the Bear. Here are ahalf dozen reasons that the Bear should win.
1. We've had a 17 year Bull Market. It has gone on too long and the DIA is
too high.
2. Private businesses are making less profit.
3. Few public companies are profitable.
4. Business costs are going up faster than business revenue.
5. The Feds should tighten the money supply. I doubt they'll do it because
they will fear the Bear and the potential of a Recession.
6. Inflation is higher than the Government reports. The Government removed
heating oil and gasoline from the inflation index because they have nearly
doubled in price.
There is one simple reason that the Bull will win. After the 1987Market Correction, the Government decided to allow the Feds to invest inthe Market. The Feds started buying stocks around noon Friday (4/14/00).They will continue to buy until panic ends. Meanwhile, they have theweekend to manipulate Market Forces. It's a matter of aligning allies andeducating the press and others as to the reasons the Bull should prevailbefore the November election.
As long as the U. S. Dollar is strong, the Bull will win everybattle with the Bear. The Feds buying unlimited stock means the StockMarket is backed by the "Full Faith of the U. S. Government." For the Bearto win, the U. S. Dollar must be seen as worthless. This will eventuallyhappen. It's unlikely to happen in the next ten or fifteen years. When ithappens, we'll face the worst Depression in History.
What will bring down the World Economy? It'll be derivatives. Whatwill bring down our Civilization? It'll be the collapse of the environment.Both will happen in this Century. Neither will happen this year.
Five Myths About Inflation
A classic definition of inflation is any increase in the money supply. Understanding inflation is vital to anyone seeking investment profits or attempting to build a successful company. As with most basic issues of the global economy, inflation is surrounded by myths and misinformation.
Recession Planning
The clouds of a 2006 Recession are starting to form on America's horizon.Politicians know that Recessions or Depressions are bad for their reelectionchanges. Bad economic times tend to create unemployment among the nice folksholding office at the time of economic stress. You can expect the Governmentto do everything possible to delay a Recession until after the November 2006election. However, the American economy is currently caught in an upwardmoving inflation and a Recession would still the fires of a runawaycurrency. The Real Estate Bubble may be about to burst. And, America'sfinancial institutions appear to be in increasing trouble over failedderivative bets.
African Aid
Africa, like everywhere else in the world, has its fair share of honest, intelligent; hardworking people who want to see their families have a better standard of living. Unfortunately, most of these people are living below the poverty line. The reasons that Africa, with all of its natural resources, is an economic basket case are complex. They start with the 16th Century Africans' failure to adopt an effective immigration policy. The result was the European immigrants divided up the continent without regard to historic tribal boundaries. The modern result has been tribal wars waged with modern weapons from the Sudan to Rwanda.
