Thursday, Nov 29, 2007
Stock market rally won't last
MoneyWeek: Don't be fooled by the stock market rally
"Given the choice between recession right now, or inflation now and a worse recession later, Ben Bernanke will always sacrifice the dollar and US citizens’ purchasing power in favour of trying to squeeze just one more bubble out of the economy before the day of reckoning arrives."
Posted by mary @ 09:17 AM (574 views) Add Comment
5 Comments
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1. handle_it said...
"If subprime has managed to cause so much trouble already, we dread to think what will happen when bad debts start rising among all those people with prime mortgages who suddenly find themselves in negative equity when they try to sell."
Indeed, the small ripples on the shore are the present subprime.
2. Pmaupoil said...
"Given the choice between recession right now, or inflation now and a worse recession later, Ben Bernanke has continually made it very clear which side he backs. He will always sacrifice the dollar and US citizens’ purchasing power in favour of trying to squeeze just one more bubble out of the economy before the day of reckoning arrives"
Nice summary! They won't escape from it that's for sure.
3. sold 2 rent 1 said...
Great article.
Just loaded up on FTSE put options early this morning.
I think this could be a biggie over the next week or so.
Anyone looking to buy gold/gold stocks should have cash in their trading accounts ready and waiting
We could see hedge funds sell gold stocks hard as they need liquid assets to cover their losses.
With an almost guaranteed US IR cut for December, this should be a superb entry point.
4. alan said...
@Mary
I hope you are wrong, but I've got a dreadful feeling your analysis is right. The US commentators are just fixated on the market going up. what about the fundamentals, what about debt?
A big recession will not be good for anyone.
5. sold 2 rent 1 said...
Ben knows, as an expert on the great depression, that is where we are heading.
The last time the Fed was in this position (1930s) they chose to save the USD and not the economy.
This time they have to try something else - save the economy and not the USD.
The problem is the flawed banking system.
There is no solution except by replacing it.
The only way of replacing it is by destroying it
We have to open our eyes to what is happening here.