Thursday, August 18, 2011

It is hitting the fan


Dow Jones -419.63 (-3.68%) 10,990.58
NASDAQ -131.05 (-5.22%) 2,380.43
S&P 500 -53.24 (-4.46%) 1,140.65

10:11 am (Hawaii) They sent so many jobs overseas. Standard of living improved in those places. Standard of living is declining here. At the point when the standard there is as good as the lifestyle here for the manual worker, that might be when multinationals start opening shop in the states again.

Maybe.

For now, it seems that the only recourse for the infinite printing of paper money is downward. The Fed printed us into the American Dream, where most families once had no need for more than one wage earner, and a home, car and pleasant way of life was attainable for the masses. It was all a lie that took decades to be unveiled. The reality is that we made our bones off the backs of underpaid laborers overseas. The reality is that the scales balance eventually. The reality is that many of us have lost jobs because of the snapback. Many of us have taken pay cuts, not to make our bosses happy, but so that our companies would survive rather than die.

We'll survive and we'll still lead the world in innovation. That's who we are. But it would take a whole lot of guts and a little bit of stupidity to enter stocks today. If I'm a contrary indicator, maybe this is a bottom. Maybe retail traders/investors really will have no choice due to zero percent interest (until 2013) but to put their hard-earned dollars into stocks. Perhaps AAPL is a steal here at 366 and gold peaks at 1825 or so. Maybe James Altucher is right about Dow 20,000 and Jim Rogers is just wrong about Asia, farms and food prices. Maybe they're both right. Maybe hyperinflation makes Dow 20,000 a certainty while the cost of a Big Mac goes to $18, corn and wheat reach $1,500 and an oz of gold hits $4,000.

Time passes and I'm more interested in the future of currencies and paper money and how politicians and banksters will create the next form of "money." That matters. I'm just a peon trying to scrape by, but even I know: it matters.