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  • Reuters: ECB considering corporate bond purchases [View news story]
    The idea that the free market was alive and well in the 19th century and even before that is a giant myth.

    Here are just a few examples of this so called wild west out of control no gov involvement at all economy.

    "In 1829, New York became the first state to adopt a bank-obligation insurance program"

    Of course it wasn't just the US. Gov regulation has thousands of years of history. Here are few more examples.

    But we could do this all day. The Free Market is not dead. It never lived in the first place.

    Oh, one more.
    Oct 22 11:09 AM | Likes Like |Link to Comment
  • Stability Of The European Union June 2, 2014 To ??? [View instapost]
    Good article.

    Yeah, the only stimulus plan is the only that ever existed in the first place, yet is the only one they won't do. They have to lower their cost of production by removing the clandestine wage controls they have via all of their preference regulations (i.e. business and labor regulations). Only then will their problems start to resolve themselves. Until then they are going to keep trying one consumption subsidy after another, each one with the same predictable results, a risk-on rally (asset inflation) followed by a risk-off spiral (asset deflation).
    Oct 22 10:52 AM | 2 Likes Like |Link to Comment
  • Stability Of The European Union June 2, 2014 To ??? [View instapost]
    We are often told that inflation is a monetary phenomenon. A better saying is that unemployment is a gov regulatory phenomenon. In reality, all gov regulations are about wage control. An EPA ruling about a certain level of particulates is a cost that limits the wage of people. In cases of protecting property, a gov regulation is appropriate, like in murder, we want the rewards for murder to be zero. As such, we create heavy regulations against murder. The reason is that property rights is how we become most sensitive to price. Price sensitivity expresses people's feelings about what makes their lives better and what does not.

    So an agreed upon wage is simply an expression of people's feelings about what wage level makes both parties better off. That wage level is driven by current technology that allows that wage level to be met. A gov price control for labor is really a ban on labor below that price control. Since gov cannot mandated new technology to pay for the gov set labor price, the result is a surplus of labor, otherwise known as unemployment.

    So, while an expressed minimum wage in one country may not be as high as another, if you have other labor laws, manufacturing controls, or high levels of capital rules (like an SEC), then you have clandestine wage controls. If the economy does not have technology to pay for the imposed wage controls, the result is, yet again, a surplus, or unemployment.

    In a free market created by gov only be limited to protection of property and person, there would be no such thing as unemployment. Free prices will always clear the market, like they do for iphones.
    Oct 22 10:48 AM | 2 Likes Like |Link to Comment
  • Weighing The Week Ahead: Is The Stock Market Correction Over? [View article]
    As I said, predicting market going up, always happens. That has always been the trend. Its like predicting the sun is going to come up. The real case for self congratulatory back patting is being able to lay out the reasons for why it is going to go down AND a realitively good approximation of when. That's when you have real buying opportunities or real selling and then buying opportunities.

    For the novices I would say, just get in and stay in, and be ready to endure the down turns if you want to prevent having your wealth stolen from you via the gov regulators.
    Oct 22 10:12 AM | Likes Like |Link to Comment
  • Stability Of The European Union June 2, 2014 To ??? [View instapost]
    "Chronic joblessness can be attributed to a number of rigidities in the French labour market, which include a relatively high minimum wage, restrictive laws on hiring and firing of workers, and prohibitive income and labour taxes. "

    The minimum wage is to blame? Why I thought that study in those 13 states dispelled that idea. I guess France didn't get the study.
    Oct 22 10:01 AM | 3 Likes Like |Link to Comment
  • Weighing The Week Ahead: Is The Stock Market Correction Over? [View article]
    On the "the world needs to be more like Europe" front.

    "Chronic joblessness can be attributed to a number of rigidities in the French labour market, which include a relatively high minimum wage, restrictive laws on hiring and firing of workers, and prohibitive income and labour taxes. "

    The world is becoming more like Europe, and they are experiencing the same results. Yet again - predictable.
    Oct 22 09:59 AM | 1 Like Like |Link to Comment
  • Weighing The Week Ahead: Is The Stock Market Correction Over? [View article]
    Let's add one more thing to this.

    The discount rate in July of 1999 was 4.5%. For the rest of the year it was raised to 5%. They kept raising it, until it was 6% in June of 2006. Now, look at your S&P chart again. On Jan 2006, the S&P topped out at 1498. Then it began to fall, but the Fed held the 6% all they way through to Dec 2006. In other words from 1999 to 2006, the Fed started drying up Fed notes. Without those notes, asset prices cannot be bid up, so they fall. It wasn't until 1st qtr 2001 that the Fed started to reverse policy, but it took all year for the DR to get to 1.3%. Of course, thrown in there was 9/11, but the recession that year was in March of 2001, immediately subsequent to the hike in the DR.

    So, by December of 2001, the DR is back to 1.3%, the bottom for the S&P was 815 on July 1 2002, but from there it started to rise again. So, by using my analysis, the rise in the Discount Rate was risk-off, it was predictable that asset prices would fall. Then, by lowering the DR, that becomes risk-on, and you buy back in, waiting for the reinflation to occur.

    So, the dips weren't some mysterious flash crash, they were caused by REASONS, just like everything in life is. Once you understand those reasons, the complex and mysterious become simple and evident.
    Oct 22 09:27 AM | 1 Like Like |Link to Comment
  • Weighing The Week Ahead: Is The Stock Market Correction Over? [View article]
    So, to carry this idea further so people can understand how to protect themselves, consider this.

    "Federal Reserve in Very Awkward Situation Given Market Rally"

    Now look at the S&P. (Set it to maximum)

    The S&P always goes up. There are dips, but it recovers, always. So the self congratulations are unwarranted if the prediction is the market is going to go up. It always goes up. What separates useful commentary from the crowd is analysis that gives you reasons of why we will see it go down it a specific time frame.

    So, knowing that it will always goes up, the dips becoming buying opportunities. The next, really tricky part, is maximizing your opportunity by buying at the lowest part of the dip. That's where cooperation comes in, but you have to have people that understand what's going on in order to cooperate on that front.

    So, just saying there might be a flash crash does not demonstrate that you know what is going on. Again, as the market always goes up, it will also, always go down. That's the point. Why?

    Understanding the inflationary and deflationary aspects of fiscal and monetary policy is the key to understanding the "Why".

    Now given that, look at this from the article above.

    "Our view that equity markets are rallying simply due to decreased interest rate expectations is highly worrisome."

    Now, think about that. If the Fed delivers with something accommodative, the markets will have taken off. So the time to buy the dip would have been last week. However, if the Fed confirms the end to QE, we could go back to the levels in last week as a result of disappointment. So, the buying opportunity would be yet to come as the big disappointment sets in. But remember, ECB QE is ramping up, so that will help lift equities, and so, yet again, the markets will go up.

    Granted you may never pick the exact bottoms or tops, but by knowing how gov regulators create the inflation and deflation, you can pick the general trends, pick your point of entry, and be patient, knowing at some point the markets will be reinflated.
    Oct 22 09:04 AM | 1 Like Like |Link to Comment
  • Is The Stock Market Rally For Real? [View article]
    Did you know that the Fed board was originally intended to be made up of people from industry? So, it wouldn't necessarily be bankers like Strong, but industrialists as well. Think back to the era when the Fed was being formed. A dogma had developed that markets were chaos (complexity is complex only to those that don't understand it), so the idea is that the best and brightest would come together under gov's guiding hand to bring order to everything. That idea has slowly morphed into academics being the best and brightest.

    They are both wrong, but its interesting to see how people can move from one flawed idea to another flawed idea.
    Oct 22 08:48 AM | Likes Like |Link to Comment
  • What Is Austrian Business Cycle Theory? [View article]
    ECB QE is ramping up.

    Now we need to see if we get any enlightenment from the Fed on the 29th.
    Oct 22 08:27 AM | Likes Like |Link to Comment
  • Stability Of The European Union June 2, 2014 To ??? [View instapost]
    ECB QE slowly ramping up.

    Now we just have to see if we get any news from the Fed on Oct 29.
    Oct 22 08:26 AM | 3 Likes Like |Link to Comment
  • Weighing The Week Ahead: Is The Stock Market Correction Over? [View article]

    If cooperation results in the purging of truth via a lack of debate, then what good is cooperation?

    I learn more (and have more fun) when someone disagrees with me. I think all the huffyness is funny. If people can just learn to not to get so upset when someone disagrees with them, then they will learn far more from disagreements than they will agreements.

    I loved being attacked on SA. It challenges me to question what I believe. I actually marked Strike as a person I follow not because I tend to agree with him, but because I disagree with him on lots of things. Its too easy to just live with our confirmation biases. We both agree that equities will tend to go up, but disagree on why they go down. You can't grow that way. I know there are lots of people on SA that just can't stand to have their confirmation biases challenged (that's clear from this thread), but its my favorite part of SA.
    Oct 21 03:33 PM | 1 Like Like |Link to Comment
  • Weighing The Week Ahead: Is The Stock Market Correction Over? [View article]
    "with the occasional flash crash"

    Well you didn't predict that, you just said it might happen.

    "So sorry to have disappointed you. "

    Not at all. You gave the exact answer that I expected you would. You only have predictions of the ups, but not the downs. Since the point of gov regulation is to transfer wealth to the equities markets, its no surprise they went up. However, what does surprise you are the "flash crashes". If they didn't you wouldn't call them "flashes" or say they "might" occur. You would be able to have expectations of when these things happen, as I do.

    "I'm dreadfully sorry that I didn't write in 2013 or 2014 that it would occur on October 15th."

    Which gets to my point about the foundational principals you are using. They lack the impact of gov regulators, and how their actions result in asset inflation and deflation. As such, you have no idea about the time frames in which these events might occur, as I do. Thus, when I see them taking action that leads to inflationary action, I can predict risk-on. When I see them taking action that leads to asset deflation, I can predict risk-off. Granted, no one can't get to exact dates, but the point is to understand why the market is doing what it is doing, and that a "flash crash" is not some mysterious force that just happens. There are reasons that cause everything in the universe. If you learn to understand those reasons, then you gain an advantage as to what will occur and what won't occur.

    So, for me there is no such thing as some unpredictable "flash crash". Hence my comment from June of 2013. 2013 mind you.

    "Also, keep an eye on Europe. France seems to be on the path to becoming the new Greece, and if the cameras get turned back on in Europe, more capital flight to safety will ensue, and we could see the 10yr move back down below 2%. "

    The 10 yr touched 1.86 last week. "

    So, you certainly haven't proven yourself by predicting only one side of the equation and saying at some point things MIGHT go down. That's not how you maximize wealth transfer. So at this point, I just place you in the average conventional wisdom crowd with nothing exceptional to say.

    Now, for the average person that doesn't have the time to track and measure these things, I would say they can just stay in equities. They just have to recognize the the deflationary periods are caused by gov regulators. As such, the regulators will reinflate, so if they can just hold tight through the downturn, then they can avoid buying at only the tops and selling at only the bottoms. A better understanding of what is happening gives you more confidence in what would otherwise be streneous times.

    You have certainly proven your value in that you have allowed me the opportunity to explain this to people. Now, they too, won't have to be surprised by mysterious, unpredictable "flash crashes" as you are. They can now undertand why assets have deflated and when, and why they can take advantage of that, by seeing when assets will be reinflated and when, by the regulators.
    Oct 21 03:15 PM | Likes Like |Link to Comment
  • Reuters: ECB considering corporate bond purchases [View news story]
    "The boom and bust cycles that ended in 1907 and 1929 occurred during times of pro-business gov't with lax regulation."

    Well, 2 seconds ago you said this.

    The free market has been dead since the late 19th century. "

    Make up your mind.
    Oct 21 01:20 PM | 2 Likes Like |Link to Comment
  • Weighing The Week Ahead: Is The Stock Market Correction Over? [View article]
    What is your definition of "real money?"

    Real money is a contract for exchange. In order to have that, there must be assets to trade or the ability to create assets. Money is really just a contract. Its an idea. Its the idea of an exchange of ownership rights. Its basically the shortest of all debt contracts.

    A money medium is simply a product the market creates to represent those contracts. Gold, rice, salt, tobacco, bank notes, are all just mediums that represent money contracts. As such, some mediums have more value as mediums just as some smart phones have more value than other smart phones in functioning as a given product.

    Govs love to take over money mediums, because that allows them to spend with less regard for asset creation (income). That results in a consumption subsidy, which can be used to buy votes. Buying votes leads to political power that can be used to write regulations that provide protectionism. That power is extremely valuable, and can be sold in amounts to make the politician rich. As such, you can see the appeal to a politician for having the gov take control of money mediums, like bank notes, aka, central bank notes.
    Oct 21 12:48 PM | 1 Like Like |Link to Comment