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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: John Vosilla who wrote (36196)	7/17/2005 12:18:39 PM
From: Rarebird	Read Replies (2) of 110194

>>Easy access to capital, excess supply constructed, overvaluation of equity, too much DEBT, too little cash flow and unrealistic optimistic future projections assumed by the everybody in the game seem to be common denominators every time.<< If you really want to fix the problem, this is what has to be done: First, cut taxes and federal spending combined so hard and deep as to leave a vastly greater amount of money earned in the hands and pockets of those who earn it. Second, raise interest rates to the point where money SAVED can gain the saver a REAL addition to income. That would swing the US away from its credit expansion towards a SAVINGS expansion, real savings being the seed corn for an expansion of the US stock of capital goods and new plants and machinery. These are essential to produce the economic goods which American consumers want and the rest of the world would also want. In sum, the REAL solution is to transform the US from a consuming economy back into a producing economy. It pays to get real. None of the above is going to happen unless Ron Paul gets elected President. The US political establishment just wants to stave the future debacle off. They will go to any lengths to do this, most certainly including wars and MORE wars. The Russell 2000 (one of my favorite leading stock market indicators) has been hitting new all time highs. It is just a matter of time before the Dow, S@P 500 and Nasdaq Composite follow suit. I'm not all that impressed with market action as of late. But I'm invested and diversified across the board, with a 10% weighting in gold mining stocks (and a nice position in the Hussmann funds.) I'm looking for new all time highs in the HUI and XAU too. It's a secular gold bull market. I'm looking at an even bigger bubble forming here over the next few years than what took place in late 1999-early 2000.

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