DOW Down 10,000
This from Rick's Picks
If we sound pleased that the market appears, finally, to be having a massive heart attack, it’s because stocks for too long have been the captive of quasi-criminal forces that could charitably be described as pond scum. The good news is that when the Dow is trading 10,000 points lower in a few years, no longer doing the bidding of high-frequency traders, mountebanks, thimble-riggers, Murphy men and arse bandits, that will set the stage for a true bull market that will run for a generation. At that point, with “money” no longer available interest-free and in practically unlimited quantities for rampant speculation, stocks will rise once again on their individual merits, savings will have a purpose, and capital will seek out its most productive uses. We hope we’re around when all of this comes to pass, as it eventually will.

Meanwhile, the implosion of stocks that seems under way raises the question of whether deflation has finally overwhelmed the central banks’ prodigious but increasingly desperate efforts to resuscitate the economy. We think the answer is yes and that deflation will rule for the foreseeable future, asphyxiating not only the economy but nearly all investable assets. A related question is whether gold and silver have made their final top. Although this is certainly possible, we strongly doubt it, since billions of people in this world have yet to understand that the paper money in their wallets, as well as the digital money in their bank accounts, is fundamentally worthless. When this epiphany finally hits it will trigger a hyperinflation that could send bullion prices soaring to perhaps unimagined heights. In the meantime, hard cash, intrinsically worthless though it be, actually will be king in the absence of easy credit. Credit will be available in theory, but at usurious real rates and only with adequate collateral. Just what will pass muster as “adequate” collateral is a question still to be answered, but assets that qualify are certain to be far less valuable than real estate that’s already been hocked a dozen times over.