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Peter Schiff - “Experts” Never Learn



August 07, 2009 – Comments (2)

There is an inexplicable, but somehow widely held, belief that stock market movements are predictive of economic conditions. As such, the current rally in U.S. stock prices has caused many people to conclude that the recession is nearing an end. The widespread optimism is not confined to Wall Street, as even Barack Obama has pointed to the bubbly markets to vindicate his economic policies. However, reality is clearly at odds with these optimistic assumptions.

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2 Comments – Post Your Own

#1) On August 07, 2009 at 3:24 PM, kdakota630 (29.15) wrote:

Recession Is Over In U.S., Germany, Barclays Says

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#2) On August 07, 2009 at 5:30 PM, QualityPicks (39.53) wrote:

The market is sure the recession is over. And I can see how it is playing out.

This is a recovery based on Government spending for sure. This has all the bears (including me) screaming from the top of our lungs at how fake and unsustainable this is. So the feeling is very negative out there. Shorts are getting squeezed, as Government's money is still money, and profits (even if the come from the government) are still profits. Government spending is set to increase, which is not only going to end the recession, but I believe will give the impression of "some" growth as the spending increases. If earnings dropped from 10 to 1, a slight jump to 1.5 would get all analysts in Wall Street to claim 50% sustainable growth for the foreseeable future.

Also, nobody was willing to pull the plug. Banks didn't ask builders to close shops, because that bankrupt them. China didn't ask the US to pay its debt. Governments gave banks all the money they needed to get out of trouble and to make profits. Etc.

Anyway, everybody decided to close their eyes and keep the Ponzi game going. There was just no other alternative :) Since nobody is asking nobody to pay their debts, the games goes on. The US does not have to pay their debts. Why do you worry then? Resistance is futile :)

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