Jubilee Prosperity

Predictions, particularly regarding the future, can be difficult.

This is no ordinary blow. There may be repeated hopeful stairstep reflex teaser rallies to nowhere for decades in a Zombie economy and market on government deficit life support.

Deficit spending, by the way, is another form of tax, on the current generation with currency inflation, and future generations with unpaid IOUs.

The financial alchemists, leverage engineers and opinion molders may trigger bailout hiccup rallies. The recently elected messiah may perform marvelously if not miraculously. All these and more may occur, without a new secular (long-term) bull in born-again economy, real estate or stocks. The market is bigger than anybody, including Uncle Sam, the Chinese, G-8, International Monetary Fund, United Nations or World Bank.

This Winter may also mark the end of the 28 year bull market in bonds and cash which outperformed everything else for years. Federal Reserve monetizing and Treasury borrowing and spending on financial friends have driven 30 year and 30 day rates to artificial lows. We call this a possible force majeure in the markets. The risk of more bankruptcies may exceed government’s ability to reflate indefinitely.

Rising long-term interest rates reflecting real capital risk may change investment topography significantly for a long time, perhaps the Biblical seven years or longer. Investments reflect long rates.

Genesis 41 (King James Version)
30And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt; and the famine shall consume the land;

31And the plenty shall not be known in the land by reason of that famine following; for it shall be very grievous.

We shall not let rallies without fundamentals give us false hope, no matter how far ahead the markets discount eternity. We shall stay with the total return leaders and protect our seed capital with stops.

Pages: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55

This entry was posted on Monday, April 6th, 2009 at 12:28 am and is filed under Prosperity. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.