Saturday, January 30, 2010

Is That Euro-Pop? - Bubble Ben Bernanke & Central Banks Might Have Done It Again...

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So in recent weeks the U.S. dollar has been headed higher:

The value of the dollar has become inversely correlated with the movement of prices in all other asset classes over the past few years:


Because central bank authorities like Bubble Ben Bernanke have, in their arrogant ignorance of markets, turned the global financial system into a Ponzi scheme where big banks and their proxy hedge funds use highly-leveraged derivatives to engage in carry trades that, for a time, bring in big paper profits so that Wall Street robber barons can pocket their billions in bonuses. It's all fine and good until the carry trade unwinds because of unforeseen risks that undermine all the digitized risk-taking that fed the uptrend. When that happens, the bottom falls out, This is generally what played out in 2008 and is now playing out again as the next shoe drops, i.e., a sovereign debt crisis.

Ambrose Evans-Pritchard is tracking a developing Eurozone crisis caused by the irresponsible fiscal habits of countries like Greece and Spain. This is reaping havoc on the value of the Euro and thus causing the value of the dollar to rise. This, in turn, is causing asset prices, like oil, gold and equity prices, to fall. The emerging trend could easily get out of control leading to another crash in values thanks, in part, to the mismanagement of financial affairs by the world's central banks that continue to rely on dangerously misleading theories of economics and finance that were geared to rationalize greed rather than deal with the hazards of human nature.

What is noteworthy is that theories which do deal with historical financial market patterns caused by "animal spirits" have been projecting the developing collapse in asset values. As tracked in this blog, Robert Prechter has been warning in recent weeks (see video below) that the uptrend in asset prices since last March was coming to an end and a new large-scale downtrend was about to ensue associated with a rising dollar.

Also followed in this blog is that these fluctuations in mass emotion are in tune with astroharmonics, and the lunar cycle in particularly. Why do you think Arch Crawford, a financial astrologer, is Hurlbert Digest's Market Timer of the Year over and over again?:

On this score, we are potentially at a very important juncture since, as I blogged about a few days ago, we are currently in a Puetz eclipse crash window. Accordingly, a major financial panic might unfold next week with the DJIA failing at the psychologically important 10,000 mark.

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