Nazbuster

Why This Rally Is Unsustainable

I agree... what fundamentals?

It's basic arithmetic:

Our economy is 70% consumerism and our government requires 50% of the deficit be financed by foreign investment.

On the consumerism front, people have lost 1/2 their assets and are worried about their jobs (rightfully so). They CANNOT spend as they did in the past because they don't have the assets to fall back on or borrow from and credit will NOT go back to the old ways.

On the foreign investment front, other nations are facing worse times than ours and will not or cannot continue their investment into our debt. China has made it pretty clear they're fed up with our debasement of the dollar. Our only remaining choice is for the fed to print money.

It will take decades of hard work to turn our economy around to one of production instead of consumerism; to savings instead of spending; and to sustainable energy instead of using coal and petroleum.

In the interim, be prepared to plant veggies and lose some weight.


On May 01 10:57 PM Gaucho wrote:

> Based on what fundamentals?
>
> Consumers ability to spend.
> The unemployment rate.
> Balanced budget.
> Manufacturing investment.
> Housing market.
> Exports.
> Price of oil now and future.
> GDP
>
> I could never understand the rally in the market. I could never
> understand the doubling of GS. All of this does not make sense
> and yet the authors explination does.
>
> BTW gold has been manipulated way below where it should be. Buy
> the metal and not the ETF since the government will take the EFT
> and give you worthless dollars when it gets ugly.
>
> Another BTW if this swine flu really gets going then you can kiss
> the economy goodby. As if it wasn't done already.