dow broke long term trendline

[muldoon]

Here is the monthly of the dow going back to 1982, we broke trend.  Nice reminder of how close to the top we still are. 

[ScottA]

What is it that has happened since 1982 that made it go up so much? Small investors?

[sparks]

What is it that has happened since 1982 that made it go up so much? Small investors?

Could be. My guess is Reaganomics, deregulation, and greed. Unbridled greed. You ever see the movie "Wall Street"?

[n74tg]

Better yet, read the book "Confessions of an Economic Hit Man" by John Perkins.  All the empire building that we (the U.S.) did from the end of World War II until the mid '90s is all coming back home to roost , with a vengeance.  Sadly, most Americans have no knowledge that it ever even happened.

[sparks]

Heard Perkins on a local radio station a few weeks ago. Sounds like an interesting book.

[ScottA]

The money had to come from somewhere. Question is who. My guess is retirment funds and government spending maybe toss in some overseas investors. I'm aware of the nation building America has been and still is doing. At some point we'll have to  share, I guess that's what's happening now with India, China and middle east oil.

[glenn kangiser]

What do you think of this?

https://www.kitcomm.com/showthread.php?t=19066

[ScottA]

Hard to say Glenn. We've been hearing this stuff for years. I remember reading a book about this same thing over 15 years ago. It's going to depend on how good the governments credit is in the long run and if they run out of money or not. If the feds run out of cash it's all over. Right now the debit is secured by the future income of present and future generations. They figure this based on lifetime earnings estimates. If something happens that reduces these numbers then the governments credit limit may be reached sooner than they think. Inflation works in their favor since it devalues the debt. With the loss of industry in this country it's not hard to assume an overall loss of real income will soon follow since we are not producing as much wealth as we once did.

My plans are based on money being very hard to come by in the future. I'm not prepared for a total collapse yet but hopefully I will be in about 2 years if plans my hold. I don't think it will happen overnight though. I think it will be a steady decline over a 5-10 year period. It may have already started. Sadly we don't know the real numbers and likely never will so it's all guesswork. Look for standard of living in America to get rolled back 100+ years. There will be the ultra rich and the rest of us. Try to own your home and enough land to grow some food so you can survive with little cash. What money you do have needs to be somewhere other than dollars which are subject to devaluation. I think property ownership rights will be protected since our society would collapse without them.

[glenn kangiser]

I think, you are pretty well right, Scott.  We still have printing presses, which some say can't be used as easily as many think thay can.

We have seen the economy go from limping, to the wheelchair with the fed pushing it around.  It has been lifted to it's deathbed by our politicians, our corporations sending all of our jobs to offshore slave wage labor sources and illegal alien workers taking the rest at rates we can't compete with. 

Now let's see how long it can remain on life support before it is declared brain dead and somebody decides to pull the plug...

[peternap]

I think, you are pretty well right, Scott.  We still have printing presses, which some say can't be used as easily as many think thay can.

We have seen the economy go from limping, to the wheelchair with the fed pushing it around.  It has been lifted to it's deathbed by our politicians, our corporations sending all of our jobs to offshore slave wage labor sources and illegal alien workers taking the rest at rates we can't compete with. 

Now let's see how long it can remain on life support before it is declared brain dead and somebody decides to pull the plug...

I agree with you Scott. The timeline is different in my mind though. My feelings are that we started the dive a few years ago and it would take a number of yeras more to really hit. The events this year, especially gas, are wild cards. I can only guess.

I think I could live fairly well with a meltdown. A year from now would be better. I just talked to the Big Kidd on the phone and he's going gangbusters. Larry knows what he wants and makes it happen. I piddle around and he rolls ahead.

It's going to be an interesting summer!

[ScottA]

Glenn they can only run the printing presses to create debt. That debt must be secured with something. If they can't secure it the presses stop. Belive it or not somebody has done the math and they keep it updated. Illegal imigration was allowed to increase the population and thus the security for the debt via those peoples future incomes. Without immigrants Americas population growth would have stalled 20 years ago and with it the printing presses. The only way it can keep going is with higher earnings, higher taxes, or a larger working population. Since government is a self feeding monster there is no way they will start eating less of the future until it's all gone.

[glenn kangiser]

So -- the border's wide open -the Border Patrol goes to prison if they try to do their job so,  let's roll the presses. hmm

[muldoon]

What is it that has happened since 1982 that made it go up so much? Small investors?

Investors big and small.  My guess would be baby boomers for a lot of it.  A huge generation of people hitting their 30s, 40s, 50s, and now 60s filling up 401ks all along.  For many many people, the existing market is 3 decades of their life's savings.  That plus the equity in their house was the retirement plan.  Sounds scary to me. 

As the volume spiked around 2000, I think we see much much more institutional investing.  Specifically, the repeal of Glass-Steagle law around 1999 opened up banks to also invest in the market.  That was a 1930s law to prevent anther great depression, for investment banking you used to use an investment bank, Bear Stearns, Fidelity, Morgan Stanly, Merril Lynch, Lehman Borthers, etc.  Now the top investment companies are the JPM, Chase, Bank of America.  After this law changed you can see the dollars pouring into the chart by watching the volume indicator at the bottom, the red and grey bars. 

[muldoon]

What do you think of this?

https://www.kitcomm.com/showthread.php?t=19066

I think it scares me, and many others.  Also were similar comments from
Royal Bank of Scotland, International bank of Settlements, Barclays, and JP Morgan along similar lines in the past week or so. 

Back in Jan-March we saw similar decline in the market, and the fed opened the window and backstopped many of the problems at the time.  Now those loans are rolling over and the capital or collateral to renew does not exist.  The treasury is at nearly 10% of what it was in January.  The feeling of "the fed has our back" is gone and the financial world is bracing for impact.