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To: Fiscally Conservative who wrote (383691)	4/7/2009 7:59:15 AM
From: Real Man	1 Recommendation Read Replies (1) \| Respond to of 436258

Good question. My guess is we are due for a rally to 200 MA in this bear market. Then again, I did expect a recovery in 2009 and am still expecting it. My scenario is in the head of USD crisis thread (optimistic one). The expectation is based on the well known fact that mucho printing that now goes under a polite name of quantitative easing is well known in economics to cause recoveries. I do expect a weak recovery and a bull trap, but strong enough to cause a significant interim bull move. I expect the recovery will be killed by inflationary forces. As assets rally, debt pressures will be alleviated. The credit crisis has passed last Fall, and the credit market has been improving. Follow the Fed. The only real danger in this market that can choke the recovery is the T-bond bubble collapse against the Fed. It's a Black Swan type event with unknown timing. As the globe follows US into recovery, the dollar will drop to new lows again, but the best guess is not yet. First US has to recover, then the World. As the global growth outpaces US growth, the dollar will drop. A conventional answer that seemed to work in the past. As to what causes the stock market rally? The answer: join the party, Ben is paying... Just look at Zimbabwe industrials. Different speed, but the same basic underlying principle. <G>

To: Fiscally Conservative who wrote (383691)	4/7/2009 8:21:53 AM
From: Real Man	1 Recommendation Respond to of 436258

FWIW, there is something I don't expect. I don't expect the real GDP of USA (sans lies) to rise, and I don't expect US standard of living to improve for some time yet. I also don't expect that SP will outperform gold, except in the short term. Perhaps, as recovery gets under way, gold could potentially drop as folks who bought it as the safe haven asset exit the market. However, don't count on it! The Fed engaged in a massive destruction of the purchasing power of the dollar, and quite a few other folks could buy every dip! Gold is in a bull market. However, what the Fed CAN do is drop both unemployment and the living standard by monetizing the bad debt and diluting the currency. It's their policy now. Don't fight the Fed. Their move of quantitative easing is to monetize on grand scale. Eventually it will work to do what it's meant to do.