Market trends

[rockpile]

Cott, what do you make of the run up on the Dow
lately? I expected some strength, but not new records.
Has the money left the savings accounts and begun to
look out longterm? Comparatively, signs are looking
encouraging in the US economy. And a lower Canadian
$ isn't all bad news. There might be some
opportunities out there. I'm looking at jumping. You're
the wizard here, looking forward to your insight.

[cottonpicken]

Not a wizard just opinionated on things.

A rising dow in an inflationary environment is
expected,adjusted for inflation its not really a new
high beiging flat for so many years.

I think alot of things are being managed behind the
scenes to create stability.

Its still all about the debt and how it is dealt with,its
qe as far as the eye can see,which is very good for
tangibles,imo nia dyodd.

[cottonpicken]

For those that are interested in this sort of stuff,scroll down to page 10.

This will give you an idea of where the liquidity will come from.

Consider that their are no bond buyers in the room any more,people are
cycling out,governments and central banks are picking up the slack,the size
of the debt roll overs should scare everyone.

Implosion comes when the interest swaps start to move,i have not got my
head completely around that yet.

http://www.imf.org/external/pubs/ft/fm/2011/02/pdf/fm1102.pdf

[cottonpicken]

Which eventually leads to this.And things dont get cheaper when this happens.

http://calculatedriskimages.blogspot.ca/2010/07/sovereign-defaults-1981-to-2003.html

[cottonpicken]

One side note that effects all of us,i would expect to
see a compression of corporate bond rates,especially
ag.

[liberty]

Your observations and understanding of the situation are excellent, Cottonpicken. I should hire you as my financial advisor!

I think we're finally seeing some concrete results from the Fed's money-printing escapades. It took years to happen, and for a while most will see this as a win-win situation. That will continue until people realize the costs involved: rising oil and food prices and rising real estate prices that will gradually push the cost of living back into the unaffordable range.

The bubble will pop when the Fed is forced to raise interest rates, and it won't take much of a rise to do it. The principle effect this time around will probably be a collapse in the price of T Bills as the U.S. government finds itself unable to make adequate debt payments.

[errolanderson]

Not sure that money printing is saving
the world right now. To me, the Dow
rally is a flood of investment money
chasing a rally. Money printing is and
always will be artificial. It creates no
added wealth to any economy. But it has
the ability to create a lot of false
hope . . . .

If QE3 is left unchecked, it could
trigger a global currency war. The U.S.
Fed is well aware of this risk.

A 1930's style currency war would be
devastating.

Is unchecked money printing saving us or
setting us up for one hell of a fall?

[sumdumguy]

It would seem to me that as long as the govt can
just print money, the price of T-Bills will never
cause a rise in rates. What could possibly
happen to tip the applecart?

[hedgehog]

hell of a fall i would say.

[Hopperbin]

Not going to claim I have the know all here but the way I see it is corporate america is going to have to survive at all costs which means low tax rates. Its the people that are going to have to pay the taxes. If corporations have to do it may as well say good buy to everyones jobs cause you would just be unemploying everyone. Last I checked America still needs to manufacture things. And cannot shut the door or put up trade barriers.

[rockpile]

Thanks Bud, now I know how to spend my downtime
this weekend - reading. Actually, your posted article is
tremendously interesting. Obviously not written by
lightweights, but sure requires very careful reading.
Though dated, seems bang on today. Really good
comments from everyone. Thanks.

[cottonpicken]

Its going to be a hell of a fall,its expanding at an
exponential rate-10.7% annulized globally for ten
years-the largest peace time accumulation in
recorded history.340%world gdp now.

I wonder if we shouldn't be focusing on growing
some more domestically used crops?

What crop is the most non-exported?Barley?