Stock Exchange Collapse

Many famous pundits are predicting a plunge in the stock market for later this month, October 2010. All the previous famous crashes, 1929, 1987, etc, have been in October.

The markets are not so much priced by real value, but by quantitative easing. The central banks and the Federal Reserve act as gods creating money out of thin air, and financial institutions borrow that money at 0%-1/4%. They act like as a privileged aristocracy—the son’s of God. Ordinary people have to pay 4.5% or more for borrowing money, or they have no collateral at all, so they can’t borrow. These groups form the financial proletariat.

The media likes to paint the banks as evil. They are not evil; they are just welfare recipients accepting the free money offered, just like hundreds of millions of the citizens of Europe and the US accept welfare.

Nobody cares what unemployment really is, or how many homes have been repossessed, or how many small businesses go belly up. All that matters is the aristocrats have lots of free chips in the casino to feed the illusion that all’s well in the country.

For the market to come down, there has to be a perceptional shift, but the current mind-set is held up in part, by phony trade figures supplied by the government, so that shift wont happen easily.

A terrorist bomb in NY would do it, and so would the California earthquake, or an even more rapid drop in the dollar might do it. Being out of the market is safe for now.

But when the illusion collapses, the casino suffers a power cut. It will be straight down 30% or more, but I don’t know if October 2010 is it or not. (sw)