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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: elmatador who wrote (44244)	12/22/2008 3:13:48 PM
From: Elroy Jetson	Read Replies (5) \| Respond to of 219903

noise. . finance.yahoo.com^dji;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

To: elmatador who wrote (44244)	12/22/2008 5:39:58 PM
From: TobagoJack	Respond to of 219903

topic, collapse progression, sub-heading, evaporation, just in in-tray some more background, along similar lines: acting-man.com you are correct that deflation is not politically palatable. that is why the Fed is increasing its balance sheet at warp speed , has cut rates to zero anbd threatens to monetize debt. the question is though if it will succeed. in a credit based fiat money system, no new money comes into being if borrowers don't want to borrow and lenders don't want to lend. so the only option is to use the government as borrower number 1. that is what the BoJ did. it didn't help much; while the measures of money supply never went into negative territory, bank credit kept contracting for years. suddenly there were '100 yen' stores everywhere. prices fell, and debt became more difficult to pay back. the BoJ eventually graduated from blowing up its money base to monetizing govct. debt to eventually even buying stocks. it has been at this for 20 years to no avail. After 20 years of trying every Keynesian prescription and inflating all out, the Nikkei index is still down 80% from its high of 20 years ago. so i would submit that it does not always work, although i do expect the Fed to be a lot more determined (the actions undertaken so far have already reached a point it took the BoJ at least 10 years to reach - but then again, the crisis is commensurately bigger). re. recent market action: the pattern of the S&P continues to closely follw the post 1929 crash pattern. if this continues, we should see a weakish rally lasting a few months in early 2009, followed by a break to new lows later in the year.