Friday, February 3, 2012

NASDAQ Hits 11 Year High; Dow at 3 1/2 Year High

Bernanke money printing is working its way through the system.

The Dow Jones Industrial Average advanced 145 points, or 1.2%, to 12850. A rise above 12876 would put the Dow at levels last seen in May 2008. The Standard & Poor's 500-stock index tacked on 18 points, or 1.3%, to 1343, on pace for its fifth straight weekly gain.

As regular readers know, EPJ has been all over this advance. Next comes the price inflation and it is going to be very serious.


  1. So far you've been on point. Good Job!

  2. Next comes the Great Deleveraging. The old economy of capitalism was based upon the Milton Friedman Free To Choose script of floating currencies for growth, jobs, and profit. Fears of debt contagion, most likely from a Greek default will resurface soon, causing derisking out of stocks, and deleveraging out of commodities. Through creative destruction, leaders’ framework agreements will provide diktat for regional security and stability.

    The collapse of Greece, GREK, and the National Bank of Greece, NBG, together with the bursting of the global government fiance bubble bubble, BWX, will be the genesis that transforms democracy into diktat.

    Greece is an insolvent nation, and its sovereign insolvency, poses global systemic risk. Greece has lost its debt sovereignty, and it cannot handle any sovereign debt burden, it can be assured that there will be no sovereign funding. The only funding it might receive is seigniorage aid from the EU ECB and IMF Troika. Greece is a fiscally instable nation, which has no competitiveness, and its economy can not be revived, it can expect to have massive unemployment like that of Egypt.

    Greece is going to default. Greece is the poster nation for European Socialism that came via the Eurozone debt trade, that is the sovereign credit, and bank lending credit experience of the last twelve years, that provided for the right to state employment to be written into the constitution, high labor rates, a lack of exports, the failure of infrastructure improvement at Hellenic Railroads, and an excessive trade imbalance with Germany.

    There are some options for Greece. It may be kicked out of the EU, as an example of being a millstone around the Germany. Or Germany goes back to the D-Mark and forms a Nordic Union with Denmark, Norway, Sweden, and other industrialized nations, not likely. Or Greece becomes ground zero for more technocratic government, featuring structural reforms and austerity, and becomes part of a EU Super State, that is a Federal Union, featuring a Fiscal Union, and the ECB or Bundesbank chartered as the Euro’s Bank, very possible.

    When Greece defaults, banks and the ECB will have to take losses, and credit default swaps will have to be paid. This will be the genesis for Financial Armageddon, that is a credit bust and global financial breakdown.

    Fate is operating to establish true socialism, that is totalitarian collectivism; this will rise to terminate all forms of economic and political life. The sovereign debt to GDP ratio is going to plummet fast, causing quick and fast deleveraging out of stocks and bonds, as the seigniorage, that is the moneyness, that came via national sovereignty, fails. The seigniorage of capitalism will be replaced by the seigniorage of diktat.

    I've written of this many, many times on my blog; its simply a matter of bible prophecy waiting to be fulfilled.

  3. This postbwould be meaningful if you hadnt posted earlier that the Dow hasnt passed (& will never pass) 1%.