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Monday, August 15, 2016

History Continues To Repeat



August 31, 2009 by · Leave a Comment 

By CAPTAINHOOK, GoldSeek

Many are now talking about how the markets appear to be managed these days, and these people are now taking conspiracy theories in this regard far more seriously. And without a doubt the Fed and Treasury are working overtime to keep the bubbles afloat, the bubbles in both equities and debt. The key in this regard for now is keeping interest rates low, however this will not be enough forever if revenues keep shrinking in the face of rising costs. Sooner or later, foreigners will see the US has no hope of honoring it’s debts short of hyperinflation and continued acceleration in monitization efforts (particularly in debt markets), and will begin pulling sufficient assets out of American markets to send market interest rates past the margin consumers can handle.

This will collapse consumer credit demand further, and in doing so, pass along deflation in the demand for goods, services, revenues, and asset prices. Like dominos, one by one, all facets of the economy will contract / fall, which will bring about a funk that will make the Japanese experience of the last 20-years look like a walk in the park. This is because the entire globe will be caught in a period of readjustment and decentralization away from the American Empire, which will affect business models and living standards around the world. Historically, periods like this have caused war as economies crumble. Lets all hope this can be avoided in the here and now.

The first sign process is accelerating in this respect will be when the US Dollar ($) falls but asset prices do not respond favorably. Yesterday the $ (and Treasuries) rallied while equities fell hard, however it could not close above 80, suggestive the trend lower is still alive on an intermediate-term basis. A rising $ and falling asset prices would really hurt right now with the economy continuing to contract, so you can count on every effort to be made to keep it below 80. Correspondingly then, a multi-day close above the previous high at 79.66 and the 50-day moving average would be very telling, suggestive the second larger degree wave down in stocks (all equities) was underway, with the test and possible failures at the March lows in the making.

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