Wednesday, January 6, 2010

2010 - One Man's Opinion (Part II)

6.) Public anger over political decisions such as budget increases, healthcare, and Wall Street bailouts will not subside as expected. The Tea Party becomes more influential as we approach the November elections.

7.) President Obama’s ratings drop to an historical low, and, as a consequence, his public appearances are sporadic at best. The general public comes to grips about his lack of economic comprehension as well as his misunderstanding of being a true Commander-in-Chief.

8.) International incidents against the United States could rise, as opponents sense a softness not seen before. In addition, our allies (e.g. Israel), may take overt actions into their own hands.

9.) Treasury yields will continue to move higher as the government printing presses keep printing money. That is until the stock market crashes and safety becomes the objective. At that point, fear and panic should drive treasury prices higher and yields lower.

10.) The dollar re-asserts itself as a safe haven as the events in #9 play out.

Conclusion of One Man’s Opinion (Part I and Part II): The stock market has one last gasp, then replicates the Tulip Bulb Mania of 1630, the Mississippi Company of 1700, the South Sea Company of 1700, the market crash of 1930, the Nikkei of 1989, the dot-com of 2001, and overall, could drop by as much as 80%. When you connect the dots, the conclusion is almost irrefutable. However, anything can happen, and usually does.

Till next time,

Bill


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