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Wednesday, November 11, 2009

False Economic Recovery

The stock market valuation going higher is a parlor trick by devaluing the USD. The Market Ticker has an excellent comparison of market valuations to US dollar devaluations.

It is a near perfect correlation. Therefore there is no significant economic recovery, but a destruction of the US dollar's value, and therefore long term destruction of US buying power, and it's economic future. If this trend continues, we will see real unemployment at 25%, and gas moving towards 5 bucks a gallon and continue much higher.

For detailed analysis and graphs, click here.

Assuming this correlation continues, gold will run much higher. Which is why I am nervous on gold. The USD may firm up rather sharply and soon.

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