The Wall Of Worry

And UP we go that proverbial “wall of worry”. Now you know where they found that terminology. Maarkets have always been manipulated throughout their history. You were just led to believe that free market forces guided them. Well if you haven’t figured out what reality is by now then you never will. Over time nature provides equilibratiion such as pressure by the costs of essentials and the ultimate impact on runaway liquidity. Of course the life blood of equities is liquidity. Right now we are pouring it into the markets through the Fed’s printing presses. Imagine a sputtering old stalled truck engine on the side of a highway and having a tanker truck pull up along side and start pouring in gasoline at such a rate its sloshing an pouring out all over the truck and road. The sputtering engine doesn’t really start revving up but the massive ammount of spilled gas ignites and everything around them are consumed. Eventually something is going to give with the “Le Grande Experiment”.

Have no fear…you are but mice withing the greatest economic laboratory experiment in the world. There will be no going back. Do not be disuaded by the pundits. We cannot withdraw the process of monetization. One way or another there will be monetization of our debt. The insane desire to reinflate a debt bubble collapse with more debt is only insane if you don’t understand why it was done. Without this strategy by the Fed there would have been a complete destruction of the bondholders of the top ten largest banks…not just here but all around the developed world. The toxic brew that has placed hundreds of Trillions of liquidity onto their balance sheets still exists. The extend and pretend will lessen some of it as a few mortgages mature but that is only a small percentage of this toxic brew. Eventually only a washout will work. 2015 will be the end of the Kress Cycle deflationary wave and you can expect equities to get a real whacking by the K winter…..Make no mistake gold will do quite well. They will take an intial whack but will recover nicely as investors seek shelter with the fear trade taking over for gold.

Right now energy appears to be going through an short term top in many of the equities we play here. NBRs chart looks short term toppy. HNR GMXR looks better. WPRT also need some airt taken out of it. Oil can run higher but its struggling too. Ben is desperate to push inflation into the system so he will take oil higher if he must. Yes that’s correct, Ben wants inflation. Deflation is like Garlic right now to him. Once he has solidified his bank’s balance sheets then he will wipe all the rest out. Time is his precious commodity here.

Silver is in breakout but I look for a nice smackdown at 42 area. That should have peak euphoria. It won’t be too big of a hit less than 5 dollars. Then up to 50 for the bloody take down buy. hehehee…….watta game. SLW is a monster so is SSRI as the hedges pour into them.

Read more at Great Depression 2