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Wednesday, August 25, 2010

Market at Tipping point

Gun to the head, its a very large game of chicken between the Federal Reserve Bank, the global banking system, large US investment firms like Goldman Sachs, and the stock market.

The world and US economy is in disarray. Housing falling at record rates, unemployment soaring, bond rates collapsing. The end game is near.......Or possibly Mr. Bernanke will try to kick the can again.

The last kick was a out a trillion dollars to buy about 1 year of better(?) economic outlook. Problem is, nothing fundamental was fixed. I stated this back in 2008, that the basics must be corrected, until then, all paper fixing (money, stocks, etc) will be short lived.

Contrast this with, Gold man Sachs chief economist is spouting the Fed will issue another round of QE. The mere fact GS is saying this puts it into question in my mind.

But count on this, something will be tried, my bet is on market hitting SPX 1,000. That will allow all the panic stop-losses to be triggered, and the big money to play the counter rally.

For now, as I already posted, I'm looking at gold, but beware, if the government has wised up and let the market takes it's natural course, the only safe haven is bonds.

Its anyones guess.

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