10-Aug-11 World View -- Wall Street crashes upward

[John]

10-Aug-11 World View -- Wall Street crashes upward

China and the anticipated commodities collapse

** 10-Aug-11 World View -- Wall Street crashes upward
** http://www.generationaldynamics.com/cgi ... 10#e110810



Contents:
### "World View -- Wall Street crashes upward
"Wall Street crashes upward, recovering most of Monday's loss"
"China and the anticipated commodities collapse"
"N. Korea reportedly attempting to assassinate S. Korean defense minister"
"Turkey's foreign minister visits Syria's president Assad"
"IDF deploys drones to protect gas fields from Hezbollah"
"Rioting in Britain begins to recede"

Keys:
Generational Dynamics, Wall Street, China, commodities,
North Korea, South Korea, Kim Kwan-jin,
Turkey, Ahmet Davutoglu, Syria, Bashar al-Assad,
Israel, Lebanon

[jldavid47]

There is a much simpler explanation to the 600 point Dow surge in the last hour or so: short covering. There are times in every bear market where the shorts simply take their profits and wait for another opportunity. What happened yesterday (in terms of speed and magnitude) has happened many times before and it will happen again. In fact, you cannot have an upward thrust like that without massive short covering. It had precious little to do with anything the Fed said.

[vincecate]

In fact, you cannot have an upward thrust like that without massive short covering. It had precious little to do with anything the Fed said.

If you have a normal healthy market that has not been manipulated by the Fed and then the Fed injects a bunch of money it will usually cause the market to go up. So it makes sense that many shorts would cover when the Fed says they are going to inject more money. The problem is that what works short term does not always work long term, and printing money and buying debt is like this. If they do it too long and too much then the currency value goes down and you get inflation and higher interest rates. Higher interest rates result in lower P/E ratios and the stock market going down. After injecting money like crazy for 2.5 years to say we have another 2 years of easy money is more than enough to guarantee lots of inflation. He has just said he will not be taking the punch bowl away. I think the market will get this soon and crash the dollar and also the stock market. A stock market crash as the same time the dollar crashes means real values for stocks are really going down.