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

To: gold$10k who wrote (69931)	10/8/2007 11:02:01 AM
From: TimbaBear	Respond to of 116555

valutrader My current view is that gold and energy stocks are leading the markets down as the dollar rallies... everything rises and falls together as liquidity (the true market driver) ebbs and flows. Isn't the dollar just the inverse of liquidity? Could you expound further on your point of view? Sorry for the delayed response. Somehow I missed your response until today. My viewpoint is that the US businesses that are doing really well are confined mostly to the energy area. Sure there are some in healthcare, but the movement afoot is to nationalize healthcare on some level and this movement seems to be gaining traction, so investors will likely wait to put new money into the arena until they see how the movement seems to be crystalizing. Housing and financial innovation were the main drivers of profits outside of the energy industry over the last 6 years. Both of those industries are besieged at the present time. So, in a nutshell, one could say (putting it as optimistically as possible) that the US business community is treading water. If this paradigm is true, then the upward moves in the US stock indices are the result of a falling dollar and some speculation. Therefore, if the dollar rises, one could expect the markets to fall and speculators to move toward shorting to exacerbate the fall. I don't know if the paradigm is a valid one or not, just trying it on for size.