Tuesday, October 14, 2008

Snake Oil

I am amazed. Watch CNBC. These guys never learn. The markets have found their bottom. Things will be getting back to normal. Now is a good time to buy stocks. The volatility is over.

Nothing has changed. It's still a consumer driven economy. The consumer is still tapped out. He owes too much. He makes too little. If he lives in a more responsible manner it will be years before anything changes and in the meantime economies around the World will be contracting. Profits will be decreasing. Commodity prices may remain depressed in some sectors but boom, bubble, bust cycles in energy and food will continue and the cycles will speed up.

If the stock markets rise it will be because of inflation and not increased valuation. They will likely go down a lot more before they go up.

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