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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Mike Harkness who wrote (48267)	4/26/2000 9:45:00 PM
From: UnBelievable	Respond to of 99985

What you say is true. Everyone wants the market to go up. But when the supply of stock increases, and/or the supply of money decreases... The central bank has to make a choice or a choice is made for them. They can produce enough money to allow stock prices to increase by 50 to 100% per year, which would be very nice but would have the risk associated with it that the price of real goods and services, which are not increasing at that rate, would tend to increase as well, or, market forces will reduce the marginal utility of stock certificates at their current price. Until recently there wasn't a problem. One of the currencies was restricted, either by policy or practice. Stock acted like a sponge, absorbing extra dollars, but there was limited conversion of monopoly dollars into real dollars. Now that has changed. Furthermore, as people with stock realize that the longer they hold the stock the less it will be worth (in either real or absolute terms), the more quickly they will be inclined to sell it. Some people figured it out a few months ago creating the current market conditions. Very soon just about everyone will figure it out, and the only thing between us and a financial event is stockholder altruism. Unfortunately, when a sponge gets full and then gets squeezed it tends to release the water rather quickly. Would the last person out please turn off the lights.