Francis Schutte's  Instablog

Not a single analyst mentioning the Reversed Head and Shoulders patterns we have for many stock market indexes and a lot of equities. Analysts are so biased they only see Negative chart formations and forget markets ALWAYS climb a wall of worry.

 Over the past months Authorities have flooded the financial markets with trillions of freshly created fiat money. Whatever is said, Communicating financial vessels play a major role in today's financial markets and under these conditions a Dow Jones of 30,000 and higher is very plausible.  Zimbabwe is a modern example of the potential many stock market indexes have. During the hyperinflation cycle, the Zim stock market index literally exploded in the hundred thousands. The bad part however is that these dramatic upswings are positive only when expressed in Nominal Terms or in Fiat Money. In other words, the rise is and will be the result of inflation and in particular of hyperinflation. Expressed in Real Money or barbaric Gold, the end result is negative.

Not only have financial markets been flooded with fresh fiat money but today Fund managers sit with another huge dilemma. The liquidities they have acquired during the last months of 2008 and the 1^st Quarter of 2009 are still idling on the sidelines and in most cases the managers have no option but to reinvest these before year end.