Our economic history teaches me that today's global economy bears no resemblance to history. We are in a new age, where no one country can control it's own economy. National borders are IRRELEVANT and an individual central bank is close to being that way. Only a coordinated effort by the worlds major central banks is having any effect, and that is only very marginal, at best. Your adherence to historical norms is wrong headed. This is the 21st century, the age of instant information, instant market reaction and a level of interdependence and mongralization of national economies into a single GLOBAL economy, now. The US no longer controls it's own economic destiny and has not for a quite some time now. That's just reality.
I remember last summer when oil was at $135 or so and I was saying it was probably close to it's peak and would soon crash into the 70's!. You were among those claiming it was headed much higher because of Fed action causing weakening dollar. I was right, and today it closed at $77. Hmmm... Why was I right? I sensed a fundamental shift in market on the demand side, led by people dumping their SUVs, and a slowing economy, world wide. Had NOTHING to do with the FED.
An asute observation. Let me push that theme just a bit further
NONE of the nations,
not even with the combined efforts of their national banks are going to be able to change the course that the market is setting.
We are looking at the
creative destruction that some economists speak of when they talk about transformation of economies.
And now? I sense yet another fundamental shift in the marketplace, this time in equities. I simply "feel" that the market is sensing the bottom. Again, has NOTHING to do with the FED, which I am convinced is approaching irrelevancy in terms the the GLOBAL economy. The panic is simply wearing out and the companies behind the market are still fundamentally sound....at least most of them....and we still like to buy stuff and over 90% of us have incomes, still.....
Timing is all, here, as I am quite sure you are acutely aware, Zoom.
I just hope it doesn't explode upwards now...I want to have some time to buy cheap shares over a long period....
Oh I think you are quite safe there.
I think the market is going to fibrilate for quite some time while this market demolishes the old to make way for the new.
As to thinking about what the world looks like post world depression?
People have to eat, that's fairly certain.
Oil prices may drop, but I think it's safe to assume that people will be using oil on the other side of the depression, too.
And as I mentioned already, the high tech and biotech sectors seem like they have legs, too, and I suspect some of those high techies are if nothing else a destination to park money, too.
Although the biotech stocks seem like they have a future in the FUTURE, they don't seem to be in the cash positions that more mature tech sectors have, right now, so I think I'd eschew those until the dust settles on this current liquidity crises.
I'd be fine with a dollar fifty a gallon again!
