The man behind the curtain of this blog has been content to make general political predictions that are safe to put out there. Bet that government will always grow and make even bigger messes and you'll always be right.
But tonight I'm feeling a bit more reckless. Junk bond trading hedge fund leveraging capitalist reckless.
Tuna Melt predicts that the stock market is going to come roaring back much faster than anyone (including me) ever expected when this unraveling began.
Why?
Because the dollar is about to take a nosedive. Stocks, oil, gold, silver, steel, food, and everything else that's come down from the stratosphere in the past few months (with one exception)* will find their way back to pre-GFM or near pre-GFM prices soon.
Forget the proverbial spigot. The Fed now has the fire hoses out and open to full blast. For the past few weeks, banks have been collecting all the water, but soon their stores will be full and the floodgates will open.
Stocks will rise for the simple reason that more dollars will be required to express the same values.
Fill up your gas tanks now.
* the exception is housing. It filled the role of biggest bubble in the recent pricing explosion. Regulators won't let that happen again. The uber-bubble will form somewhere else. Chinese real estate anyone?
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3 comments:
Let's "seal the envelope". Give me a hard time frame.
Questions that I can't quite word right -
With all the Americans investing 10% of their income into all the corporations in the stock market - is there ever a point when there is just too much money in and the companies are not able to realize the profit? It seems that if 250+ million people invest at least 10% of their income of billions (maybe trillions) of dollars there should be a bubble much like the house prices. In the past 5 years everyone is pouring money into the market and expecting on average a 8%-10% annual gain. Should we really expect an 8%-10% gain of free money? Why should I get 10% return on my money - what did I really do? Nothing - just got on Ameritrade and bought stock. What makes me (and the millions others) so special to do nothing and expect that kind of return?
I just spent over 1 grand in an ETF last night while dressed in my underwear - for some reason I'm expecting thousands of dollars of profit in 20 years! Tuna Melt please help convince me that I'm going to be a millionaire!
Nilfisk. October 2007 Dow regained by my birthday 2009.
Peter Schiff, whom many want to believe is the new HB (not even close, I say), agrees with me about the dollar but disagrees about the consequences. He thinks a tanking dollar is also going to tank the American stock market.
Jimmy - yes. You will be a millionaire in 20 years, but in 20 years and four days, you'll only be worth about $75K (after GFM7). Be sure to pull out at exactly the right time.
is there ever a point when there is just too much money in and the companies are not able to realize the profit?
yes. 2000. Even by Oct 07 Nasdaq didn't regain that level, and then it crashed hard again this month. I bought Intel right at the very top of that one, so really you shouldn't listen to a word I say.
Should we really expect an 8%-10% gain of free money?
Ah...but it's an 8 - 10% gain on your original investment. Cash out and find that gas, health care, housing, food, and anything else that can't be outsourced to Vietnam has gone up in price 8 - 10% since your original investment.
scroll back and forth between
here and here a few times to see why stocks (or anything else that holds its value and is real) has done well over time.
As you might guess, I think now is a great time to buy gold & silver too. Not that I have loose cash to just toss into these more sophisticated investments, but jewelry's looking like a good Christmas present for wifey this year.
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