[deMolay]

I think it is patently obvious that we are in the midst or near the end of the Suckers Rally of 2009. How much longer do you see the charade lasting. http://www.marketoracle.co.uk/Article10477.html

[pedalling_faster]

there's a lot of whispering about a 'big problem' in the fall.

some use the data 9-9-9 as ominous.

basically, way out of my knowledge. i just know that the "Rot in the System" has continued rotting & not been fixed.

[ian807]

Probably not much time if the last depression is our guide. The stats, unfortunately are tracking the last depression fairly closely, making the next serious stock dip on track for 2010 or 2011 at latest, after which it doesn't rise again. If our crisis continues to track the last depression, the Dow should level out to somewhere between 4000-5000.

What pulled us out of the last depression was a war, about 10 years later. What we'll see 10 years down the road is an oil crisis.

Wish I had better news.

[NickyBoy]

Probably not much time if the last depression is our guide. The stats, unfortunately are tracking the last depression fairly closely, making the next serious stock dip on track for 2010 or 2011 at latest, after which it doesn't rise again. If our crisis continues to track the last depression, the Dow should level out to somewhere between 4000-5000.

What pulled us out of the last depression was a war, about 10 years later. What we'll see 10 years down the road is an oil crisis.

Wish I had better news.

An oil crisis would spark quite a few wars, wouldn't you think?

[ian807]

An oil crisis would spark quite a few wars, wouldn't you think?

Short lived ones. The act of engaging in a war depletes the oil supply that much more rapidly, leaving only biochemical, germ warfare and nukes as viable options. The use of either conventional or unconventional weapons would erode the economic base even further by chilling trade. The wars will be self-limiting in that sense. We won't be able to afford them.

[Pops]

The wars will be self-limiting in that sense. We won't be able to afford them.

I suppose there are enough nukes with a full tank to make a bang.

[DantesPeak]

Good article. Even the author mentions the rapid growth of money and credit in India and China. Combined with the rapid expansion of the Fed’s money base, there is a great and powerful amount of new money available to the world’s equity markets.

Stock valuations become irrelevant in these conditions. The markets will continue to go up, at least in the US, until interest rates start rising. Most likely, but not necessarily, interest rates will rise because of fall in the US dollar’s value. But rates might start rising on their own to reflect the coming higher rates of inflation.

Basically dollar holders, by fearing deflation, are willing to accept an interest rate far too low. They should be, and will be soon, worrying more about inflation.

Keep in mind that the history of even the great US depression from 1932 to 1937 was inflation and not deflation, once the US dollar was debased. [In 1937 the Fed tightened money policy].