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Stock Market Forecast
& Comments
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March 31, 2008
"In
the world, there is more good than evil but only by a
margin of three percent." James Quillian
Price
The current economic situation is about asset prices
and an unwillingness of
the financial elite to allow their fortunes to be
determined by free market forces. Had the price of
houses continued to rise there would have been no
sub prime crisis. Capital losses are being
transferred to lenders. Having or not having the
mortgage payment has never been the problem. The
problem is not the payment or the inability to
borrow. The problem is price and prices are not
totally determined by the availability of money.
But, with enough government intervention, any market
can be turned temporarily. With a temporary market
turn, there is a guarantee that economic troubles
will only be shifted forward in time. Current
imbalances are the result of past interventions. If
current official efforts are successful in averting
a recession, today's troubles will grow in magnitude
and mutate into something far worse than we face
today.
Sun Spots And Federal Reserve Policy
I find no connection between the level of sun spot
activity and Federal Reserve policy. However, the
announcement of each sequential Federal Reserve
stunt has an effect on financial markets similar to
the way surges in the number of sunspots affect
radio waves. Federal Reserve week has become a time
when we all expect a new scheme designed to turn
markets. Seldom is anyone disappointed. After the
stunt is announced stock prices trade in bizarre,
unpredictable movements throughout the next week,
depending on the degree investors take or don't take
the bait. Next week, we should get some indication
of market direction. Sun spots distort meaningful
patterns in radio waves. Count on a Federal Reserve
stunt to distort meaningful patterns on stock
charts. The buying is always orchestrated following
a Fed decision. Next week, we should see the return
of free market forces and get a handle on direction.
My opinion, still, is that we will see a strong bear
market rally before falling further. The efforts to
make it happen are monumental
A Top In Gold? Maybe
In a real economic downturn, there really is no
place to hide. Gold is often called honest money,
but it is really not money at all. It is a metal
that commands a price. I fully expect that gold
along with other commodities will make a top and
decline alongside equities for the duration of what
will prove to be a very long bear market.



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Quillian's Law and
Other Sayings
Quillian's Law "Suffering is the natural consequence of stupidity." Stated
differently, "Where stupidity is practiced, suffering soon follows."
James Quillian
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