Crack up boom refers to a panic to maintain relative purchasing power, when confidence in money (USD, Yuan, Yen for example) erodes, wanes or finally collapses. I believe we are currently somewhere along the road between erode and wane, but when I see $55 oil (a form of crack up boom behavior) I can easily visualize the collapse or panic phase approaching. People are not going to want to hold "services" (at least none that I'm aware of?) when their money collapses and evaporates.
So as an investor/speculator who recognizes the inflationary/crack up boom manifestations out there, I try and ask questions all the time, but the primary one is how do I want to hold money or assets? It's not an easy answer day by day, primarily because the Wizards (the most egregious being China/India/Asia, Japan, and US branches) still appear to have credibility with the cognoscenti. MoP member Easy Al Greenspan can still speak (for instance about energy last week), actually be believed, and can move markets with mere words.
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The China MoP can actually effect a big one day drop in copper, by suggesting "an interest rate" hike is "coming". Lots of cry wolf behavior from the MoPs.
In such instances, overwhelming bullish supply/demand characteristics or the extremely weak support for money/script is ignored for a period. I am utterly amazed at how much influence and sway the Wizard and MoP branches still have, even with some important, reputable people (like Gross and Roach) calling them on it.
pimco.com
It just goes to show how sycophatic the main players are, few have the courage to speak out and be subject to a version of "swift boat ads" like Gross was when he ventured out recently. Once in a while you get a glimmer of what they really think, but spoken like it was some fucking joke. These Fed speak comments are an invitation and green light for crack up boom behavior:
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That may indicate that the true panic may be dramatic when this myth (what I call the Toto effect, when the curtain is pulled back to reveal the "Wizard") is shattered.
In the meantime, I constantly check the tea leaves. I ask questions such are the specs (huge funds dominate trading, and there is a herd tendency) already getting too heavy into crack up boom vehicles I use? If so, does that mean the MoP can use them for their market distortion activities, and dirty tricks, so as to cause them to sell, which can briefly shore up the Old Maid Card currencies like the Yen and USD, and allow them to print more money and avoid taking responsible and real money support steps? Remember too that money can actually be defended against a flucht in die sachwerte if incentives are given to hold it. It's logical what that would be: quit printing/monetizing money and overexpanding credit/heroin to support over a trillion bucks a year in fresh USA borrowings, that only distort the global economy even more.
And I'm ever alert for the weakening of MoP operations, when suddenly their words, or bogus actions (such as occasional token rate increases and "more talk and words") have diminished, or lead to other effects. I call this the Pinocchio effect, when MoP action or words are met with disbelief and the market rallies gold, the CRB, food, or natural gas, or hammers the USD versus the unmanipulated currencies, or some other leak occurs into flucht in die sachwerte like assets. It's an on going process and battle, and admittedly a tough one. |
