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Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives -- Ignore unavailable to you. Want to Upgrade?

To: Patrick Slevin who wrote (3186)	4/30/2010 7:52:17 AM
From: carranza2	Read Replies (1) \| Respond to of 222408

The Markman stuff is very interesting, but I would hesitate to draw too many conclusions from it. The kind of growth we need in order to make public and private debt a lesser concern is simply not going to happen because of the amounts necessary to service the debt and the cost of deleveraging. The Fed's easy money policies will stop because they have to stop, otherwise serial bubbles will take place, and I doubt the Fed is interested in seeing them happen as it has (hopefully) learned its lesson. If the Fed ignores inflation as a concern in order to devalue debt, a doubling of the Dow is of course possible, but it would perforce take place as a result of inflated dollars. These inflated dollars would reduce the toxic effect of our enormous debt, but everything comes at a price. In this case, the price would be the real value of the USD which would of course minimize the value of the Dow at 22K. Using today as a benchmark, I would guess that if we double the Dow, the purchasing power of the USD when that happens would be less than 50% of today's value. A Dow at 22K I think necessarily implies no progress in purchasing power, and even a decline from today's values. This is the reason I like gold.