Did we survive the storm

Thanks for all your opinions gang. As a layman it's hard to pick through the mass media dribble.

I read all the post in this forum, but sometimes it just confuses me more.

DB

"Is the recession over?" A resounding NO is the conclusion of this rather well-documented PDF file on the topic.

Click here to access it. (PDF file)

You know folks, roller coaster enthusiasts and coaster designers have a term for what we are experiencing. It's called a brake ride. They've slowed the car a little just before the next big drop.

Originally posted by Rockpuck
The ONLY thing an increase in the stock market indicates anymore is that... the market has increased. That's it.

Hi RP. It's been my belief that the stock market would eventually begin to register the effects of near unlimited $ creation. Are we beginning to witness the initial stage of equities as an inflation play ?

I'm betting on it

From Prof Lance Lewis today....

Note the HYG junk bond ETF is making another new 10-month high today. I know many stock bears are looking for an imminent retest of the stock market’s lows, but if corporate spreads, especially junk, keep coming in like this, it’s difficult to see how that’s going to happen anytime soon since the credit markets typically lead the equity market.

(chart)

Clearly neither corporate debt or stocks are rising because the economy and financial system have been magically cured by money-printing. But when the Fed prints enough money to make literally everything “money good” when it comes to their value in debased dollars, everything can rise for some time. Let’s not forget that stocks tend to do quite well during hyperinflations; it’s just that gold, hard assets, and claims on hard assets do even better.

Full Text

Using an extreme reference , JP Koning explains the dynamic....

Zimbabwe: Best Performing Stock Market in 2007?


Related: Zimbabwe Stock Market Booms As Robert Mugabe Prints More Money - Bill Bonner , June 07

Zimbabwe Stock Exchange set to keep soaring, says Renaissance - Janice Kew , July 09

reply to post by OBE1


Isn't it like

Z 190,000 : $1

Nothing like Z. runs like that without completely coming back and destroying itself.

For reference, go back to 1999 in Nasdaq and tell me how many of those 200 dollars stock can now be bought for about .10

If your opinion is that it is because of inflation running those prices higher and you see the same here..well IMO that is a stretch but I see where you are coming from.

One thing scary too is there is only 75 companies on the exchange. What happens if a couple turn upside down and then you all investors just selling that thing right out the door. I know you are prob. not advocating the move obviously, it would really have to be a hidden gem though for big money not to get ahold of that and run it around.

Could be what is happening now.. but I always say there is no free money in the market so that to me looks pretty dangerous.

reply to post by GreenBicMan


When taking into account stock prices related to now and then one must assume the annualized percentage of inflation, or deterioration of the Dollar. Without getting into the actual math of this conundrum, lets just say:

1 dollar in 1999 bought you 1 stock.

1 dollar in 2009 bought you 10 stock.

Now you could say that in 1999 compared to now the price of the stock is better now, because it's, well, it's a bigger number, right? In reality the dollar from 1999-2009 has declined 30-40% .. meaning you need 30-40% gains just to trump inflation, and more on top of that to produce profit.

To get the true value of growth we must take the value of the market and equalize it pre-inflation to see the actual growth. Of course the economy did grow, as did the Markets.. but not nearly as much as it appears.

Of course in the market you could always hope for a 4 way split and amazing dividends for the entire time you held the stock.


--Hope this makes sense lol..

reply to post by Rockpuck


Well right, you wold have to actually have EVERYTHING invested in order to just keep pace with the current rate of what your money could buy you in the future so it is the same as the present.

Now, if you go back before all this, would 1 share at old Z dollar equivalent be worth right now?

I haven't seen any charts like that unless I have missed it etc.

reply to post by GreenBicMan


I am not sure I understand the question.. though I will take a stab.

The Z if invested before their currency crashed, if invested at 1 dollar, would be worth several million in todays Z.. but the million and the Dollar would buy the same physical amount.. The Zimbabwe stock exchange skyrocketed alongside inflation. It wouldn't make sense to earn 2 billion Z's a day, and turn around and buy some Zimbabwe mining stocks at $10 a share.

Zimbabwe has always had horrific inflation though.. it didn't happen over night, they average 20-60% inflation per year for several decades .. I am not sure why people correlate Zimbabwe, or even Germany, to the US. Economics relies on individual scenarios and no two are alike. The US for instance has had several currencies.. when one dies, it's replaced with a new one following a brief economic depression (which were more common before Reserve Banking began).