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Friday, March 3, 2017

What is QE? (Yellen don't hurt me, don't hurt me...no more) Part II

Part 1 is a real must read for everyone. I doubly recommend it to anyone who has been brainwashed by Kind World News and overly fond of pet rocks. 
I have had a few debates with Gold bugs recently and in spite of generously bestowing my knowledge on them that this stock bull market is just run of the mill and not “artificial” in this post, the negativity still continued. Well there is no cure for stupid as evidenced by the fact that many people still pay Gary Savage for market advice (not dissing those who use him as a contrary indicator).  

Today I would like to just present one brief piece of evidence about why I think this bull market is going higher.  It is not because of future QE.
It is because of this.

This is a chart showing the consumer savings rate. The grey shaded areas denote recession. As you can see in the last 40 years, every recession the average savings rate went up and every expansion savings rate went down. With the exception of the current expansion. Savings rate went up during the recession and stayed up. This is wonderful as it shows that this expansion has the potential of a lot more horsepower if the savings rate moves down. This is also the reason this expansion has been weaker than usual. Savings rate is not moving down as it normally does at this stage.
Also, it shows that the common person does not believe in this expansion. His/her viewpoint is similar to those fucktard Trump’s comments that 94 million people are unemployed, which even for Trump was an all-time high in stupid. 

Expanding wages, inflation and lowered savings rate will drive us to 2,800 quite easily probably by middle of next year.  

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