Reply #4: notes [View All]

[rapier]

Liquidity is drying up. That is the amount of money available for speculating in stocks is falling. In fact the amount of money available for most things is drying up as debt service becomes more and more of a drag on all sectors and most importantly credit growth is slowing. (These are two sides of the same coin. One way or another the rise of the US since WWII is at its foundation the story of the growth of credit (debt))

I've proposed, in one way or another, in this forum that we are on the cusp of a profound change as debt has risen to an unsustainable peak. I doubt there will be a 'crash', and certainly won't predict one but the chances of an upward bias in stocks for the long term are slim in my opinion. What the powers that be hope for I believe is for stocks to just keep even with inflation. They are hoping for inflation of course too, for inflation makes paying off old debt esasier. (which is a way of circling back to the systems foundation of debt. Inflation is the debtors friend) The alternative to inflation is deflation. A fate too terrible to contemplate.

Job numbers, GDP numbers, earnings, don't mean a thing. It's all noise. A story to 'explain' the world. Nice stories but they are just that, stories. Stocks rise and fall on the amount of money freely available to buy stocks. That's it.