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DIRE CIRCUMSTANCES!

November 30, 2003

Yes, the stock market has Wall Street giddy and they are encouraging everyone to jump in head first. Don’t get left behind! But the real truth is that this is just a bear market rally before the market heads south again.

I don’t know where I read this analogy but it’s generic enough to not not border on plagarism. What do you think would happen IF it were announced that a new technique had been found to enable producers to mine gold at ZERO cost and to produce as much as we wanted at will? Duh! The price of gold would fall through the floor: $1 gold anyone?

Okay, so what about the concept wherein we print MONEY at no cost and as much as we want? Right, and one day the dollar will fall through the floor and be worthless. Last week, Fed governor Ben Bernanke said, “The U.S. government has the technology, called the printing press, that allows it to produce as many U.S. dollars as it wishes at essentially no cost.” The U.S. dollar is a ticking time bomb that will one day explode! It won’t be UBL or al-Qaeda that does us in, but our own greed.

We are building a future INFLATIONARY economic bomb as the Fed fights DEFLATION. The massive U.S. debt (corporate and individual), an $8 TRILLION dollar stock market plunge, and a Chinese low cost manufacturing ability has the Fed more than worried. So, while they fight the immediate problem (deflation) to stave off a double-dip economic drubbing, they are setting us up for a futuristic inflationary bubble that will act like a whip-lash that few can survive.

As Richard Russell has said, “Alan Greenspan is the greatest inflationist in all U.S. history. He and his gang of misguided central bank, ego driven, and power-driven men believe they can control the natural forces of the free market. They for a short time but eventually the compressed spring, which is gold, will ‘un-spring’ and gold will rise spectacularly.”

There’s always an answer for the wise; however, that precludes tens of millions of investors and we will all have to share the human misery that greed and ego have created- coming dire circumstances.

Written by Ernie · Filed Under Daily Commentary 

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