Stocks trade around 20 times earnings now…and the Dow is about 10 times the price of gold. Sometime in the future, you’ll probably be able to buy Dow stocks at 5 times earnings and maybe only 1 times the price of gold. Three thousand seems like a likely target, because that would move stock prices down into the right range from a P/E standpoint…
May 6th, 2010 | Bill Bonner | 6 comments | ContinuedAll Posts Tagged With: "deflation"
Krugman Strikes Again
Although there is far more happening in the world outside of Mr. Krugman’s brain than within it, fresh drivel from the acclaimed Nobel Prize winner compels me to turn my focus there once again.
In today’s column, Krugman analyzes the Greek debt crisis,
Inflation and Deflation at the Same Time
Hmmm… Inflation? Deflation? Analysts and pundits are trying to look into the future. What’s coming?
March 23rd, 2010 | Bill Bonner | 1 comment | Continued
Reality Sovereign Debt Finance Theatre
The European monetary family is in crisis. It meets on March 25th and 26th to discuss whether to kick Greece off the island (survivor style) or to intervene and save the prodigal son. The problem, from a German perspective, is that Europe is full of prodigal children. To save Greece means to save the rest of the economies troubled by rising public debt-to-GDP ratios.
March 19th, 2010 | Dan Denning | 1 comment | Continued
Feds Think They Can Improve the Economy by Buying Things Nobody Wants
Reading more closely, we don’t see much reason for the Fed’s optimism. And apparently, neither does the Fed. It is leaving its monetary stimulus program in place for an “extended period.”
March 19th, 2010 | Bill Bonner | 0 comments | Continued
Reserve Bank Agrees There is a Housing Shortage in Australia
RBA assistant governor Philip Lowe said in a speech in Sydney yesterday that constraints on home building are restricting the supply of homes in Australia. The shortage is one factor keeping prices up. Nothing was said about the lending boom.
March 11th, 2010 | Dan Denning | 43 comments | Continued
Shadow Banking System: A Murky World of Credit, Securitisation and Derivatives
Most of these are interest rate and credit derivatives. As we learned in the last two years, the big risk here is to institutions which owe and own these obligations amongst one another. In our view, the degree of interconnectedness among these obligations (they still aren’t unwound) still makes the entire global financial system vulnerable…
March 10th, 2010 | Dan Denning | 14 comments | Continued
In a Properly Functioning Economy Prices Go Up and Down
Here at The Daily Reckoning, when we go into a liquor store and find lower prices, we are delighted. We stock up. But we are clearly out of step with mainstream economists.
March 1st, 2010 | Bill Bonner | 2 comments | Continued
Does Greece 2010 = Austria 1931?
Being part of the Eurozone, Greece does not have the option to devalue. Granted, such a policy is not a panacea. Interest rates would skyrocket and asset prices plunge.
February 18th, 2010 | Greg Canavan | 2 comments | Continued
Japanese Government Displays Generosity as Prices Fall in Japan
“Japan Deflation Hits a Record Pace,” reported the BBC. Prices in Japan were falling faster than they ever had since they began keeping track in 1970.
February 8th, 2010 | Bill Bonner | 5 comments | Continued
Obama and the $3.8 Trillion Budget
The amount of the budget itself is staggering. That’s a lot of money. But even more staggering is the glaring omission: the Obama administration is planning to spend $1.6 trillion it doesn’t have.
February 3rd, 2010 | Bill Bonner | 1 comment | Continued
The Fight Between Greed and Fear, Boom and Bust, Expansion and Contraction
This is a fight that goes on all the time. But it is usually kind of a ‘cold war.’ Years go by without much activity. Stocks meander. A few companies go bust. A few boom.
January 12th, 2010 | Bill Bonner | 1 comment | Continued
Feds Say Don’t Worry About the Depression
Instead of allowing things to settle down, the feds are doing all they can to keep them stirred up. Amid the foam and splash, nobody knows what is really going on.
December 14th, 2009 | Bill Bonner | 2 comments | Continued
Japan and its Economy Did Not Have Secret to Everlasting Success
Let’s see, in the 1980s Japan’s corporate leaders thought they were going to take over the world. Investors thought so too. They expanded. They wheeled. They dealed. Prices shot up and they all thought they were geniuses.
November 13th, 2009 | Bill Bonner | 13 comments | Continued
Bankers Betting That the Money Given by Feds Will Be Worth Less Next Year
So far the bet has gone their way. Copper has doubled. Gold is up 20%. Stocks markets all over the world are up 60%. Foreign currencies, too, have beaten the dollar.
October 27th, 2009 | Bill Bonner | 2 comments | Continued
