Wednesday, March 19, 2008

Beware The Parabolic Rise



It would be irresponsible to make any forecast given that this would be tantamount to crystal ball gazing. However, there is a technical argument which can be put forward to support the following possible conclusions:

1. Short term rates spike downwards one last time as the Federal Reserve moves to use up the last silver bullet in it arsenal of weapons.

2. This downward spike could be short lived, and a credit crunch might manifest despite the Fed’s efforts. The market might take a “stuff-you” attitude (or panic), and short dated yields might spike upwards very soon thereafter.

3. 1 and 2 above could cause the parabolic trends of the ratios in the first three charts to collapse – which would be consistent with historical experience of parabolic rises within biological systems.

4. Velocity of money would contract savagely if a credit crunch manifested that was beyond the Fed’s ability to control.

5. This would cause the US economy to tank – thereby causing mayhem in international markets

6. The Dow Jones Industrials Index would break below the support of line A-B and might stop anywhere between 8000 and 4000.

7. The parabolic trends of the commodities charts might collapse as the wheels come off the world economy and the debt mountains implode..."

"...1-7 above are the risks being faced by those participating in the world economy because of the aspirations of a few testosterone addled, egomaniacal, power hungry individuals who moved to circumvent the United States Constitution in 1913 and to establish the US Federal Reserve System..."

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