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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Mike Johnston who wrote (63198)	2/1/2007 4:27:06 PM
From: jimmg	Read Replies (2) \| Respond to of 116555

I think you have it backwards. Central banks aren't printing money. Money growth is strong because consumers are borrowing and spending. Did the Fed print money and then tell all its employees to go buy up Mercedes Benz cars and Snap-on tools? No. Millions of people in the real economy are borrowing and spending and living for today. Corporations are reporting huge gains in revenues and profits and are plowing the dollars back into stock buybacks. The public is still skeptical about the stock market because of the 2001/2002 internet bubble crash. Accordingly they are sitting on $11 trillion of cash earning 5% while the stock market marches forward at 15% to 20%. Short interest is near record highs and put options continue to be bought on the ask in high volumes. People just don't believe in this rally. Is it sustainable? Of course not. But it won't roll over until there is some unforeseen event or the public fully embraces the move. The stock market rally this time is much different than 2000. This one is for real. It's real companies producing and selling real products at real profits. I don't know what's gotten into American consumers but they can't buy enough shit. Now real wages are growing, job openings are near record highs, and long term interest rates are still low enough to facilitate borrowing. This is a very powerful global inflationary boom. I would not think that anyone is good enough to call the top or time the end. It will likely continue for much longer than anyone thought possible. When I start to hear about dedicated short hedge funds blowing up, big declines in short interest and big domestic stock inflows by individuals chasing performance, then I'll know we are closer to a top. Not even close yet in my opinion.