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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (45184)	11/9/2005 2:44:57 PM
From: ild	Read Replies (1) \| Respond to of 110194

Date: Wed Nov 09 2005 13:47 trotsky (BoS@Japanese stocks) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved there is good reason to believe that the Nikkei has made a long term low. for instance, the long term Nikkei/S&P ratio chart has made a most convincing looking saucer bottom and has broken above its long term downtrend line for the first time since the late '89 high in the Japanese market. fact is, Japanese stocks are cheap, and have been for quite some time ( especially relative to US and European stocks ) . it's probably not a good idea to chase them here, but corporate Japan has restructured and has become lean and mean and has largely dealt with its debts. the long bust forced corporations to do that, as they do not have a money printing press like the government. iow the next major setback in the Nikkei will probably provide an excellent long term buying opportunity. note also that the Nikkei is highly likely to remain decoupled from the S&P over the long term. Date: Wed Nov 09 2005 13:36 trotsky (there is however one thing,) ID#248269: Copyright © 2002 trotsky/Kitco Inc. All rights reserved one endeavor that the central banks have been VERY successful with: propaganda. they have succeeded in convincing people that they are all-powerful, practically in possession of a magic wand. the constant fear of their interventions expressed here is testament to that fact. the high point in this psychological operation's success story came probably in 1998 , when MIT economics professor Rudi Dornbush famously remarked "we will NEVER have a recession or a bear market again, because the Fed doesn't WANT THAT". of course two years after even the good professor had confessed that they had successfully pulled the wool over his eyes, the Nasdaq began its 80% collapse, the worst bear market in the US since the 1930's. did the Fed 'want that'? obviously not, since it immediately began a frantic rate cutting campaign. in any case, the belief in the central bank's omnipotence is erroneous. i predict that this faith will be severely tested in coming years and eventually give way to distrust and suspicion of the fiat money fractional reserves system and its eternal boom-bust cycle sequences.