by Pater Tenebrarum, Acting-Man.com:
The US Stock Market
There can be no doubt that the US stock market continues to be mainly supported by strong money supply growth as detailed in our previous missive. However, from a technical perspective, the entire rise from the 2009 low continues to look corrective in nature. On a long term chart the action in the market is strongly reminiscent of the 1970s bear market, even though the fundamental backdrop seems quite different. One question is of course whether it really is all that different: after all, the government has tweaked its calculation of CPI numerous times, with the goal of lowering it in order to slow down entitlement spending that is indexed to ‘inflation’. Originally this goal was kept secret – it was maintained that what was needed was a ‘more accurate inflation gauge’. Today, in the course of the recent budget debates, this fiction has been discarded and it is openly discussed that lowering the government’s expenses should be the goal of once again altering the CPI calculation (this requires a certain degree of chutzpa, which we have noticed has become quite pervasive, as people have generally become more and more used to an environment reeking of growing authoritarianism). Naturally this makes what is already (and always has been) a useless number even more useless. According to the Shadowstats web site, if one were to employ the calculation method of 1980, CPI would today stand at a level comparable to what was seen in the inflationary 1970s.
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