The DOW hit “all-time new highs” all last week.
Isn’t it redundant — and stupid — to use “all time” and “new” in the same phrase?
Yes, it is — and about as stupid as believing in this “rally”.
The facts are that last night Japanese machinery orders fell 13% in January, despite the Japanese government pledging to “beat deflation” with new monetary operations (read: printing money) that has driven the Yen weaker by some 20% in the last couple of months. That move started in December and as such should have been reflected in January’s order figures — if anyone believed it in Japanese business.
They clearly don’t.
Then there’s China. They have a major property bubble problem, which is what always comes when you start printing cheap “money” (really credit) and allowing it to go into the real estate market. In China’s case it’s built to the point of literal cities with nobody living in them. That will eventually burst, and when it does you’ve got trouble. China has the “luxury” of having an effective command economy since they’re a communist nation, but even that won’t change the laws of mathematics.
Finally we have Europe. It’s a basket case. Europe has failed to deal with its banks, it has failed to deal with its budget deficits and it is still trying to find a way to “pull forward demand” to fill fiscal holes. It’s not working because it can’t — the leverage was never taken out. Not there and not here.
