Stock Price Bubble. Oil/Commodity Price Bubble. The Stupidest People on Earth

You don't really have to take my word for the people on Wall Street being the Stupidest People on Earth. They convict themselves.


We have BOTH the stock market and oil reaching new 2009 highs. That is IMPOSSIBLE--that is, it is impossible for one or the other groups of traders not to be insanely wrong. In fact, they are both wrong. But the idea that oil can go into a price bubble based on expected runaway inflaton, and the collapse of the dollar, while stocks rise in the expectation of an IMPROVING economy, is an internally contradictory idea. If we are going to have runaway inflation, and high interest rates, the economy is going to COLLAPSE again. These (Wall Street and commodity traders) truly are the Stupidest People on Earth.


Actualy, as this blog has told you, the rise in oil and the stock market is UNRELATED to the econmy, except tot the extent that minor developments in the economy may be used to HYPE the trading the computer gamers on Wall Street are manipulating. This is all MOMENTUM trading. The fact that it is insane to have momentum trading based on cmpletely contradictory hype (as between oil and stocks) makes no difference to the Stupidest People on Earth. The oil price alone, if it continues up in this price bubble, will SHUT DOWN the economy.


As this blog has correctly informed you, the economy has, indeed, "stabilized"--for now. That is , it is no longer getting substantially worse. However, neither is it getting substantially better. One of last week's news items was that unemployment in California was 11.9%. It is crazy for stocks to be trading as if "recovery" has already occurred when we are still bumping along the bottom, with alternationg "good" (relatively) and "bad" (relatively) news. Right now the momentum traders on Wall Street are hyping every bit of "good" news, and ignoring every bit of bad news. The bubble will brust, in both stock prices and the price of oil. If history is any guide, the bubble will brust by the end of September.


This blog previously told you when to invest in this markte, if you are a trader who felt you could not stand to wait for the big drop. I told you, in that case, to invest when the S & P 500 last went under 900. I was right, even though I (correctly) thought stocks were stil toward the top of their "real" range at that point. But you are one of the Stupidest People on Earth if you invest in stocks, as a trader (instead of 401 (k) dollar averager), with the S & P 500 above `1000.


Now if stocks do not decline more than 2l0% by the end of September (or at least be in a move that will extend that far), I will have been wrong about the timing of the bursting of the bubble. I don't think I am wrong about the bubble. But if I totally knew how to time these bubbles, I would be much richer than I am.


Still, if you invst in either stocks or oil now, you are proving yourself one of the Stupidest People on Earth.