I think the sky is falling as we speak. Check these out:
Interpretations of the sublime should not be confused with the history of growth. In 1993-94 the greatest growth market was created, and is still alive and well. If you look at the alleged bear market in bonds, and compare it to the past events of 94, you could come to the conclusion that since DEC 99 the correcting bonds are setting a base for a rising New Born Bull Market. And that any excesses in commodity prices will only act as a precipice to extend the Last Bull Market well into the future. This is clearly what the Nasdaq is signaling. And this is why the DOW isn't. With the dichotomy between growth, yield, and value; you get what are laggards. The so called old economy grow best in decreasing rates, which directly effect yield & growth. Yet High techs can grow as long as demand is sufficient to outpace margins.
Looking away from stocks and gold, the bigger picture telegraphs where we are loud and clear.
We are clearly in a bull market. This high growth is ultimately bad for GOLD. Gold can't compete with currencies, and the ability to move billions or trillions in seconds around the world.
Greenspan and the other CB's are on a spending spree.
What is greenspan spending on? You mentioned Paul Volcker. Paul was and is an inflation hawk. But inflation as the economy reports is not the same inflation that the monetarist use. As long as growth outpaces inflation the economy is on a solid basis. This is/has been the root of the rise of the Nasdaq. Within any contraction phase of an economy, financial equities often deflate. But that's where key value can be found. The Fact that PE of Banks are being driven to new lows, at the same time as many earnings are on record pace, suggests NOT that we are entering a recession, but that the values are out of phase with the broader markets. Within the basing of treasury, and bond yields; the finacails system will accrue rapidly.
Hutch |
