And another thing, that Bill Fleckenstein said that Alan Green$pan got it wrong in 1973 saying that all the signs for continued economic expansion had never looked better or some such. Bill F claimed that the market dropping 50% or something in 1974 showed that Alan Green$pan had feet of clay.
Message 6617554
Well, what a lot of rot. Nobody can predict certain things like butterflies taking off in Russia. Or crashing in some certain unfortunate circumstance.
For one thing, there was a war in the middle east somewhere around 1973. A religious cranks conflict between xenophobes and racists. It's hard to predict that sort of thing. One of the related events was an OPEC cutting off of oil supplies which sent oil from $3 per barrel to $12 overnight.
That is a massive, huge, destructive and economically repressive thing to happen. So there was very quickly a very large worldwide stockmarket decline caused by oil going up hugely. Saudi Arabia and friends spent a decade rolling in unheard of wealth and opulence, wastefulness and fantasy. In 1979 they did it again! Oil hit $40 per barrel.
So the stockmarkets basically took 12 years out while this colossal economic adjustment was absorbed. See the graph here and check out the 1970s.
quote.yahoo.com^DJI&d=my
THAT is why the 1970s decline and hiatus in stockmarket growth happened. Well, a billion other reasons all interact, but that was the biggie.
Then, in 1982, as prices started a slow decline as alternatives to Arab oil were brought on line, the stockmarkets started to increase again. In 1986, reality arrived again and the OPEC cartel pumped like mad. The price hit a low of $9 briefly.
Over the next decade, and with the USA contriving to keep Iraqi oil off the market with the silly sanctions and with USSR in tatters and production there in trouble, the oil price stayed higher, mostly. With OPEC contriving to maintain some production limitations.
Now, despite Iraq oil not on the market and Russia still in trouble, there is heaps of oil around and we are back to the cost of production.
The USA could nuke Saudi Arabia to get the price back up. If I were Saudis, I'd be feeling nervous. Or maybe it's time for Iran to get some sanctions to ensure they haven't got nukes under construction. Watch that space!
Anyway, the point is that Bill Fleckenstein talked rot about my good printing pal Alan Green$pan.
The fun is really just beginning. Buy lots of stocks and prepare for a new paradigm acceleration. Heck, buy Japanese stocks on borrowed Yen if you can get it! Japan's woes are gone - just a bit of banking stabilization needed.
Dow 16,000 coming up. Feb 2002.
Mqurice
[Of course, a comet could strike, Yeltsin could push the button, China could invade Taiwan, Israel could nuke all the Arab countries in self defence, or Y2K could turn out to be real. Nah! What business is going to choose to go out of business because they couldn't flip the calendar over a day. If governments go out of business for half a year, that is a GOOD thing - they might well have legacy nightmare Big Brother Y2K problems and conk out for a while.] |
