Monday, May 23, 2011

Washing Dow 12k

It is no surprise that the markets have stalled out right before the announcement that quantitative easing will last forever.  This has a real advantage for the market makers, as they are sure of QE3, and they will buy the dips leading up to the continuation of the debt monetization.  This is a great example of how the corporations are using the US government and all governments to take over the global landscape.  As the governments go bankrupt, they still provide liquidity for the banks to fix themselves on top of the corporate structure.  In the end, it is these corporate banks and their corporate entities that will survive debt monetization and currencie devaluation.

The lower the equity the better the buy.  Buying the dips has been the only way to play the market.  Running up to QE3 has provided great opportunity in oil, gold, and silver stocks, as they have pulled back drastically.  They world has watched the game long enough, and soon the banks should become net long of these four asset categories.  What is interesting is that so far this is the area where corporations have lagged, and the only beneficiaries has been those who have bought physical gold and silver (with a few expectations, as some mining and oil corporations have done well).  More than anything it has provided the given industries opportunity to secure mines and fields and clean up their balance sheets.  Not only have individuals seized this opportunity, but central banks have as well.

Once quantitative easing is continued, the next move will happen and those holding the assets will watch as reality catches up with the markets.  Government debt and equity will evaporate into nothingness, leaving anyone relying on it empty handed.  The beneficiaries will be those who can produce, if it is with already owned physical assets, or with the tools to create assets.  The markets will wash this range until then, and then once fiat goes away, all finance will not be recognizable.

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