Why are US stock markets ascending to endless new highs ...

Why are US stock markets ascending to endless new highs ...

PostBy: lsayre On: Thu Jun 05, 2014 6:21 pm

... and flying in the face of a declining GDP?
lsayre
 
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Re: Why are US stock markets ascending to endless new highs ...

PostBy: rberq On: Thu Jun 05, 2014 8:06 pm

lsayre wrote:... and flying in the face of a declining GDP?

(1) The Fed has driven interest rates so low that bonds and CDs earn next to nothing, leaving stocks as the only game in town.
(2) People with retirement accounts are on automatic "buy" plans in stock index funds, so money comes in regardless.
(3) The economy does seem to be slowly slowly improving which inspires some optimism.

February and some months before were good for stocks. Since then they have been flat or down a little, by my numbers.
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Re: Why are US stock markets ascending to endless new highs ...

PostBy: jpete On: Thu Jun 05, 2014 8:31 pm

Who has retirement accounts?

http://www.bankrate.com/finance/retirem ... ise-1.aspx

Cash-strapped employees are turning to their retirement plans as the credit crunch drags on and costs for everyday necessities continue their upward spiral. While hardship withdrawals from 401(k) plans are taken by a very small number of participants -- about 1.5 percent at Vanguard -- the giant fund company says hardship withdrawals have been increasing significantly; up about 17 percent in 2006 and another 9 percent in 2007.


I know mine went from $50,000 to $400 during the 2 years I was out of work. I was fortunate to have it at least. Many didn't.

Maybe the $80 billion a month the Fed has been pumping into the economy is showing up as inflated stock prices?

Hmm...where have I heard that before?

http://dailyreckoning.com/the-us-federa ... ial-folly/

Ehow.com relates a piece of history in that “Since the creation of the Federal Reserve in 1913, the money supply had increased 240 percent from 1913 to 1920, because of a relaxed gold standard, and prices had risen by an identical amount.”

Gaahhh! Prices rising 240%! In seven years, the money supply increased 240%, meaning it more than doubled, as did prices! No wonder they had a recession!


They didn't call them the "Roaring 20's" for nothing...

http://www.thebubblebubble.com/roaring-twenties-bubble/

By the middle of the decade, the economy had once again become sluggish as the Reserve banks relaxed requirements for credit and more than $500 million was created in new money. Loans totaling more than $4 billion were made available to the American public. The hope was that such measures would stimulate the economy; however, the opposite occurred as more and more consumers took on an increasing amount of debt and the price of stocks and real estate began to skyrocket. In 1926, Coolidge supported the Revenue Act, which reduced taxes on individuals with higher incomes but offered little relief to middle-income families (Chris Butler, 2007).
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Re: Why are US stock markets ascending to endless new highs ...

PostBy: Flyer5 On: Thu Jun 05, 2014 8:55 pm

jpete wrote:I know mine went from $50,000 to $400 during the 2 years I was out of work. I was fortunate to have it at least. Many didn't.

Maybe the $80 billion a month the Fed has been pumping into the economy is showing up as inflated stock prices?

Hmm...where have I heard that before?



Can't you just print more. Oh never mind you are expected to live within your means. What was I thinking?
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Re: Why are US stock markets ascending to endless new highs ...

PostBy: lsayre On: Thu Jun 05, 2014 9:18 pm

It does seem a whole lot like the "roaring 20's". The Federal Reserve was artificially pumping loads of money into the system back then also, adding more than 63% additional dollars (and I bet they were paper) into the economy between 1921 and 1929. A Wall street Journal editor declared that we (meaning the government and the Federal Reserve) had found a way to have endless prosperity without ever having to face the old boom and bust cycles again. Then KaBOOM!
Last edited by lsayre on Thu Jun 05, 2014 9:23 pm, edited 1 time in total.
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Re: Why are US stock markets ascending to endless new highs ...

PostBy: jpete On: Thu Jun 05, 2014 9:23 pm

They say history doesn't repeat itself but it sure does rhyme. :)

Some people might think hard currency is a foolish mistake, but then, maybe those people will pass away before the next big crack up boom.

Personally, I plan on being here when it happens and likely AFTER as well. And shiny metal is part of that plan. ;)
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Re: Why are US stock markets ascending to endless new highs ...

PostBy: wsherrick On: Sat Jun 07, 2014 1:01 am

jpete wrote:They say history doesn't repeat itself but it sure does rhyme. :)

Some people might think hard currency is a foolish mistake, but then, maybe those people will pass away before the next big crack up boom.

Personally, I plan on being here when it happens and likely AFTER as well. And shiny metal is part of that plan. ;)


True wealth is in tangible assets. But, you know that already. Remember, they took away peoples assets during the 30's. They can do it again. What ever you do, keep it off the books if you can.
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Re: Why are US stock markets ascending to endless new highs ...

PostBy: jpete On: Sat Jun 07, 2014 9:12 am

wsherrick wrote:
jpete wrote:They say history doesn't repeat itself but it sure does rhyme. :)

Some people might think hard currency is a foolish mistake, but then, maybe those people will pass away before the next big crack up boom.

Personally, I plan on being here when it happens and likely AFTER as well. And shiny metal is part of that plan. ;)


True wealth is in tangible assets. But, you know that already. Remember, they took away peoples assets during the 30's. They can do it again. What ever you do, keep it off the books if you can.


According to Kelo v New London, you can't even count on tangible assets. The state can take your stuff any time it wants.
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Re: Why are US stock markets ascending to endless new highs ...

PostBy: lsayre On: Mon Jun 09, 2014 5:54 pm

Martin Armstrong (who apparently has a fantastic track record of making market predictions) is calling for DOW 25,000. His reasoning is that when the worlds economies collapse the US Stock markets will be the only game left worth playing, and money from around the world will flood into our markets driving the DOW to 25,000. Madness?

http://www.shtfplan.com/headline-news/a ... n_06062014

If the DOW hits 25,000, that means that America's corporations are worth roughly 78% more than they were at the (then, all time) highs seen before the 2007/2008 crash. What grounds could be sited to justify such valuation?
lsayre
 
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Re: Why are US stock markets ascending to endless new highs ...

PostBy: jpete On: Mon Jun 09, 2014 6:53 pm

When the worlds economies collapse? Doesn't that also include us? Or are we somehow impervious to global events?
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Re: Why are US stock markets ascending to endless new highs ...

PostBy: rberq On: Mon Jun 09, 2014 7:02 pm

lsayre wrote:Martin Armstrong … is calling for DOW 25,000. His reasoning is that when the world’s economies collapse the US Stock markets will be the only game left worth playing, and money from around the world will flood into our markets driving the DOW to 25,000.

If the DOW hits 25,000, that means that America's corporations are worth roughly 78% more than they were at the (then, all time) highs seen before the 2007/2008 crash. What grounds could be sited to justify such valuation?

You just cited the grounds – the US would be the only game in town.

Here’s what Wikipedia has on the brilliant Martin Armstrong:
First, some of his theories are based on the number pi (3.14159). That puts his predictions right up there with the Mayan calendar, which I believe tells us the world has already ended???
Also: In September 1999, Armstrong faced prosecution by the Securities and Exchange Commission and the Commodity Futures Trading Commission for fraud. During the trial, Armstrong was imprisoned for over seven years for civil contempt of court, one of the longest-running cases of civil contempt in American legal history. In August 2006, Armstrong pleaded guilty to one count of conspiracy to commit fraud, and began a five-year sentence.

So I guess he's out of the slammer now and back to making predictions. In spite of Martin, I think I will continue to hedge my bets when it comes to stocks.
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Re: Why are US stock markets ascending to endless new highs ...

PostBy: lsayre On: Mon Jun 09, 2014 8:07 pm

I guess that 7 years behind bars for contempt of court can shake anyone and make them plead guilty to a charge. Wow, that's fortitude. I wonder if that's a record?

The judge ordered him to turn over $14.9 million in gold bars to the court. He refused. I wonder if he still has the gold bars?
lsayre
 
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