Replies to post #146024 on ajtj99's Market Pulse

[ajtj99]

TREND1, I just am going by the patterns I'm seeing. They speak more clearly than the fundamentals.

You may recall the internet bubble and how it tracked the Dow 1929-1932 drop as it unwound in a bell curve.

As for the aftermath of the intervention, it should drag out whatever time we will have until a recovery. However, that's a product of debt bubbles popping anyway.

With the velocity of money dropping, the intervention was an attempt to mitigate that. However, the stimulus and expansion of the Fed's balance sheet has not really increased the amount of credit outstanding, and that's the real money supply.

In the end I think we'll lop off $14-Trillion in debt through liquidations, bankruptcies, foreclosures, write-offs, and credit line reductions. That should take us down to about 250% of GDP from the 350% of GDP level at the peak of the credit bubble.

The Great Depression lopped off debt at the rate of 100% of GDP, taking it down from 150% to 50%.