Tuesday, November 29, 2011

I'm Going to Explain Something That No One Else Seems Able To

The US Stock Market.  At least within the context of the last decade and probably the next decade.  It is all about the value of the US dollar.

The value of the dollar goes down and the Stock Market, (which is a market of stocks), Oil, Gold and all other assets priced in dollars goes up. If the dollar, which was worth a dollar yesterday is only worth 98 cents today, people want more dollars for the same basket of goods.

When the value of the dollar goes up convincingly, all of this stuff goes down.  That's it.  That's all you need to know.

Watch it and you will see that 90+% of the time even to the day that the US dollar rallies  and goes up in value, the market heads down.  More specifically, it is re-priced down.  I say 90+% of the time because the 'market' is not a Swiss Watch.  If it were and were always logical on each and every day it would be too easy to profit from.  People would program their computers to trade and everyone would get rich.  An impossibility.

Anyway, an easy way to think of it is:  When the value of the dollar goes down, OPEC wants more dollars for their one and only world distributed product - oil.  Gold is also easily correlated to movements in the value of the dollar.  Dollar up, gold down.  Dollar down, Gold up.

By the way, don't you love it when they show a picture of stock trading floor traders looking worried or holding their heads in their hands becuase the DOW went down 150 points?  These people make money both ways, coming and going. Please...

The market has been rallying and has lately been held up because of all of The Fed's actions which served to devalue the dollar.  Specifically, the printing of trillions of dollars to buy/trade worthless mortgage paper from the banks and returning real money in the form of US Treasuries - that actually have some value.  They called that Quantitative Easing.  They should have called it Raping America with telephone poles.

The market itself is a bit more fuzzy because it is valued not only by the dollar but by the actions of specific companies.  eg. IBM doubles its sales and profit.  "The market" or at least IBM and Technology stocks are going up regardless.  IBM is worth more dollars even if the dollars are worth more.

I'm not waffling.  I'm saying that on 2 out of 100 days, the dollar and Gold or Oil or the Market or all of these have been up together.  That is an anomaly.  It won't stay that way for long. More than a day or two in fact.
So, when the person from CNN or ABC, or even the Wall Street Journal prints a story with a headline that reads "Stocks Rally on Big Black Friday Sales!" or "Stocks are Sold on Tensions in Middle East!", or any of that nonsense, just smile to yourself, look at what the dollar did and what the market did.

Why do "news people" - some of the dumbest people on Earth anyway - feel it necessary to try to explain the movements of the stock market?  Why don't they just say "Market Up (or Down) Today. No One Knows Why"


  1. Kid:

    I always watch these dumbass talking heads saying 'market down on worries of inflation...' or some other idiocy.

    You are right: the news morons always feel compelled to explain why the market is up or down, and it doesn't seem to matter whether the explanation is true or not.

  2. Fredd, I swear the 'news' people have the most elevated opinion of themselves than anyone, politicians included.

  3. WOW-never thought of it that way-thanks-
    Lately I have thought of the Stock Market as just another 'set up' job-so thanks again!!!

  4. I love your last sentence...
    I'm about to write a post about television and how it's killing our country..........a little extreme, but I think I've got some points and you have a good bit of ammo here!
    Who NEEDS these know-nothings to go on and on and on about things they haven't a CLUE about? Yuck.
    Great post, for a "Kid" :-)xx

  5. Carol-CS, Well, it is a set-up. The game is rigged but for a small player, I can find my way around and put a little jingle in the jeans from time to time. Don't tell anyone. :)

  6. Z, Thank you! Well, it's flattering to have inspired you even a little.

    I look forward to reading it.

    And yes, It is a Constant stream of BS coming at us from the outside world. :)xx

  7. I just left this comment to you at my place but figured I'd post it here, too...in regard to the FABULOUS 2005 Cream concert videos you linked me to...just great. By the way, do you like THE BAND?

    KID, that is amazing stuff ...CREAM was such a good group.
    I don't see how Rolling Stone could have picked Jimmy Hendrix over Clapton for best guitar....the guitar IS party of Clapton and he sings so well, too.
    Jack Bruce looks awful but I guess he almost died of liver cancer a few years ago. And I just read that Ginger Baker has horrible arthritis...what a shame.

    Stormy MOnday; does it get better than that? I didn't even remember about that concert, maybe I'd not heard of the 2005 reunion, but it is absolutely amazing; thanks so much.

  8. Z, Got em. I almost Always subscribe when commenting, so no worries, and with a blog like yours, I'd at least go back and check up.

    Cream, Fantastic musicians. Very creative music back then by many, unlike today :(

    I don't see much Rolling Stone I'd agree with.

    Here's some Clapton and Baker (and Steve Winwood) back in the day :) LINK

  9. thanks for explaining KID...sometimes I do find it all overwhelming~!:)

  10. Woman, when you're surrounded and drowning in BS - education, TV, advertising, politics, sports, Everything! It seems like maybe 1 or 2% of what you hear might have some honesty to it. Not necessarily true but at least the source of information believes what they're saying..

    It is over-whelming. I remember the specific point in time where I realized I'd have to throw out my education up to that point and start over for myself (sans the 2+2 stuff); it was very daunting/depressing but also a relief and empowering that I was maybe and finally on to something. But geeezix, 12 years of school for "this" understanding of life ?? Wow.

  11. Have found that the news (Main Stream Media) sources do tell what is happening but inna split second and then quickly change the subject leaving those paying attention asking, what did he just say, and the other person in the room say I don't know the child was asking a question; or something like that. Or the new subject was more liking to your taste like sports, a celebrity divorce, or something that stimulates the brain.
    What happens if the Economic Martial Law is declared and all bank accounts and safety deposits boxes are seized (Bank Holiday) and all gold and silver are seized like FDR did? Obama is asking Congress for special powers like FDR did. Maybe suspend the Constitution as well as elections. A cornered animal is very dangerous; several states are being challenged- to take Obama off the ballot due to lack of vetting on the birth certificate thingy and multiple social security numbers.

    3rd State Facing Challenge over Obama Eligibility

  12. What is truly disturbing is how little the market has gained in the past twelve years when compared to the inflation rate. It's not good.

  13. They Say, nothing would surprise me.
    What's worse is I don't see things being much different if mcLame was elected instead.

  14. Trestin, I'd say it's about nil. Imagine if you'd kept your paper money in a mattress