Bill Bonner with economics and civics lessons. From Boner at davidstockmanscontracorner.com:
Time to Sell… Maybe
BALTIMORE – Yesterday, the S&P 500 hit a new all-time high. And the Dow just hit a new record close as well. If you haven’t sold yet, dear reader, this may be one of the best times ever to do so.
We welcome new readers with a simple insight: Markets are contrary, pernicious, and downright untrustworthy. Just when the mob begins to bawl most loudly for stocks… the market sets its trap.
Longtime Diary sufferers will be quick to straighten out the record. We’ve warned that stocks have reached a peak several times over the last four years. Each time, we thought we saw the writing on the wall… and each time, we were mistaken. We raised our Crash Alert flag.
But the poor ol’ Black and Blue just fluttered in the wind, as stock prices rose ever higher. Eventually, it became so tattered, we took pity on it, folded it up, and put it away.
In the interest of full disclosure, as well as reputation hygiene, we saw a bear market coming in 1999 and 2007, too. We were right then. But lately, we’ve either been dead wrong… or dead early.
Since stocks, bonds, gold, bitcoin, works of art – literally anything that looks like an investable asset – are rising indiscriminately in price, our suspicion is growing that we nay be witnessing the early signs of a plunge in money’s purchasing power that is bound to eventually spread beyond the confines of markets for financial assets and collectibles. Just saying, one should perhaps not rule it out.
The Zombie – Crony Complex
Which just goes to show what a four-flusher Mr. Market can be. He (helped by the Fed’s EZ money policies and the Greenspan-Bernanke-Yellen “put”) has driven prices higher and higher – even as the global economy slows down.
And we’re not talking about a regular, unimportant slowdown. We’re talking about a slowdown of a special variety – one caused by deep trends that cannot be easily reversed.
For one, most of the major economies face a demographic challenge. They have more old people to support and fewer young people to support them. Then there’s the problem posed by the zombie-crony complex. New readers may not have heard of the ZCC, so we will explain.
“Zombie” is a generic term we use to describe people who live at other people’s expense. People who get food stamps, people who push papers for the government, people who collect “disability” or medical/pension benefits beyond what their contributions would justify – all are zombies.
In today’s world, there’s a zombie on every street corner.
As former Republican presidential hopeful Mitt Romney was famously overheard saying, almost half the population has been zombified. And as he discovered, there’s no point in trying to win a national election by running against zombies: They vote.
To continue reading; Writing on the Wall——Again!
