MDA - Market Direction Analysis Message Board

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Strategies & Market Trends : MDA - Market Direction Analysis

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To: HairBall who wrote (50510)	5/12/2000 11:01:00 AM
From: Crimson Ghost	Read Replies (2) of 99985

LG: A few random thoughts The economy will slow, the dollar will take a big hit, and stocks will drop considerably further before this bear is finished. One more stiff drop may bring this phase of the bear to a close, but the next phase -- to begin sometime between summer and the day after the elections -- probably will drop prices close to their 1998 lows. In a slower economy budget surpluses will vanish as politicians move to cut taxes. Those treasury buybacks that many on Wall Street see continuing for many years, likely will end in 2001 or 2002 at the latest. Given the extreme leverage in the US today, debt defaults and bankruptcies will skyrocket in a recessionary environment. In such a scenario financial stocks look especially risky here. Probably more risky than tech now. The combination of a slowing economy and a weaker dollar could trigger an episode of 1970s style stagflation. Not as extreme as the 1970s, but a real problem nonetheless. That is the best possible environment for a major bull market in gold.

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