Roll, River, Roll
Confidence and the Role of CPI and Tbills
Chart
Dow Jones Industrial Average vs Inflation and Interest Rates
5.5 years--August 31, 2007--February 28, 2013
which parallel
5.5 years--July 2, 1937--December 31, 1942
Weekly
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THIS UPDATES A LONG-RUNNING COMPARISON
All still on track. Stocks prices track down. Inflation is low or dormant. U.S. Treasury Bill rates stay at subterranean levels similar to those seen in the 1930's. No hint here of confidence coming back yet, the fuel needed for definitive and 'permanent' (70-year) recovery.
The current booming rally from early March of this year has about the same angular velocity, magnitude, and duration as the preceding 1937 rally that follows its downward spike to the 19 level on the chart.
The present rally is slightly bigger and has lasted, so far, a little longer than its 1937 predecessor. If the parallel pattern continues, current prices will undergo a stair-step descent ending with three further sharp declines over the next two-to-three-years, each larger than the one before it.
With parallels continuing to prevail, the mess will not end without a two-to-three year decline terminating in 2012, with perhaps the biggest drop of all in the whole sequence. That may be necessary to climax the mass dysconfidence factor among the public which accompanies the unprecedentedly large, intrusive, and opaque, and manipulative remedies that the State has mandated already, with more on the horizon.
Caveat. Nevertheless, be aware of the trickiness of juggling patterns and parallels. See patterns and perceptions
here.
Previous articles tell what is being measured and why and alludes to the possible root cause. The popular, proximate causes identified by media, government, public, and academia, are financial. I believe, however, they are merely symptoms, and the efficient cause lies elsewhere--singular, simple, but difficult to identify. It is amplified and identified here and elsewhere on the site.
Written
11/20 - 11/22/2009
Posted
11/22/2009 4:50 p.m. ET
Current Update
2/19/2010
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\CRASH\MNTH1789\SN150T56
SN210H 5-20-1939 9-27-2009 240 2-14-1942 *10-17-2012
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