|
|
Bob Hoye
responds to some reader queries.
JAN 11/09
In your reports the bull market top is presumed to be in 2008. What if
the top was already in 2000? Would the situation be today, like the
situation in 1937/38?
H.O. Tirol Italy
Bob Responds: We thought that a cyclical bull market was
possible, within a secular bear. Looking at the Naz this is the case.
However, for what ever reasons, the late bull market included both
financial and tangible assets. Big action in the latter was missing in
2000 and obvious in 2007-2008. This made the late part of the bull look
like 1937 and the five-year run lined up.
It also looked like 1929, or 1873 and as it turned out the crash matched
those rather well. So, if the rebound makes it to around April that would
confirm that we are in a post-1929, or 1873 depression.
JAN 7/09
What is your opinion on the deflation / inflation debate?
J.E. Vancouver BC
Bob Responds:
The article “Commodities and Politics”
explains commodity bubbles and contractions. "...it is worth noting that throughout all,
repeat all, of financial history, prosperity has been associated
with rising commodity prices and hard times with declining
commodity prices."
NOV 11/08
Have the markets capitulated? N.J. London UK
Bob Responds:
Our strategy on our dramatic market reversal was to use the
rather methodical nature of previous transitions from a great financial
mania to an equivalent contraction.
This enabled the anticipation of the fateful reversal in the yield curve
in May 2007, which had changed enough by that July to conclude that “The
greatest train wreck in the history of credit”, was on.
Our Capitulation Model has registered that condition on the Dow, with the
only previous readings occurring in 1996 and three times in the 1929 to
1932 bear. We are now getting a similar reading on the CRB commodities
index.
Following a “Capitulation” the low is usually in within a two or three
weeks, which allows time to implement policy change. At the other end of
great moves the model kicks in with Upside Exhaustions”, just as
dispassionately.
|
|
