The true nature of the FED

               The Federal Reserve is NOT what most people believe it is.

A look at the long term Nasdaq 100 index

The Nasdaq 100 Index (NDX) has approached major long-term resistance. It fell just short of the 50% retracement of the 2000-2002 crash, at 2,805.80 and is backtesting a long-term trendline. After a 10-year bear market rally in this index, this seems poised to turn down in a big way. I posted about the parabola in Apple Inc. (AAPL), and as soon as this stock really gets going to the downside, the NDX should follow suit, as well as the general stock and commodity markets as the coming deflationary crash gets underway.

Jim Puplava Interviews Bob Prechter

Great Interview....

http://www.netcastdaily.com/broadcast/fsn2012-0322-1.mp3

Under the hood of the market....not a pretty picture

The market has now risen over 32% from its October 2011 low of SPX 1074.77 to an intraday high of SPX 1422.38. The Transports are diverging with the DOW. The Transports have not confirmed the DOW's rise above its May 2011 high. We have potential divergence setting up on a monthly basis. Volume has been declining since the rally began last October. In addition, the entire rise since March 2009 looks like a rising wedge, and we have a more pronounced rising wedge since October 2011. This bear market rally has now gone on for over three years, and it looks like its about to come to an abrupt end. The end of this cycle wave B Bear Market Rally and the return of the larger bear market that began in October 2007 should be imminent. Very few believe it is a bear market rally anymore. This is to be expected at the top of a cycle B wave.

 

Neil Cavuto Interviews Robert Prechter

Excellent Interview...and I believe as timely as ever.

The College Tuition Bubble

Many wonder why college costs so much these days. Could it be the value an education adds? Could it be "Rising Inflation"? The answer to both of these questions is an emphatic NO. The real reason college tuition costs are up is because there has been an enormous amount of Inflation. No, not CPI inflation, but credit inflation courtesy of the government and the Federal Reserve Private Banking System. One of the first financial markets that this scheme showed itself in was the NASDAQ bubble. Then it crept into housing and that ended badly in 2006. Then it found its way into the stock market and commodities. We all know how those ended. Well, one market it is certainly present in is the education loan market. The government has decided that everybody should receive a college education, so it has extended massive amounts of credit to those in need. Ironically, it is this very act of lending that has bid up college tuition prices. This is very similar to the housing bubble and will end the same way. This lines up well with my forecast for a deflationary collapse. This will bring down education costs when people can no longer get credit to keep education costs artificially high. The same is true with the market for healthcare. But I'll save that discussion for another time. For now, please view this very informative interview with Robert Reich, Public Policy Professor at University of California Berkley.

A Comment on Current Market Sentiment

CNBC today Featured Nassim Taleb who said he has "no choice but to own stocks" to "preserve my financial situation." He is trying to hedge against hyperinflation. Funny, that this article comes out AFTER the markets have already risen 100% from their March 2009 lows. I will bet Mr. Taleb wasn't saying he has "no choice but to own stocks" after the market had fallen 58% from their October 2007 highs on March 6, 2009. But now that the market has risen substantially, he is bullish. Of course, March 2009 is exactly the time that everybody who is bullish now should have been bullish and "worried about hyperinflation", but instead they were worried about deflation and a depression. I agree with Mr. Taleb in his worry about the financial future and his support for Ron Paul, as he is one of the ONLY politicians that has the slightest understanding of what is really going on, however I believe Nassim is very wrong about his assessment of the financial assets to own. I see deflation is a much bigger threat than hyperinflation, but, naturally, hyperinflation is on everyone's minds now. By the time the market makes its final low for this bear market, everyone will see Deflation as the major threat. That of course will be the time to be worried about "hyperinflation", which may or may not occur. But that mindset will do investors much more good at the bottom than now, as financial assets will be severely undervalued by then, probably more undervalued than they were in 1932. Not to mention some famous bears have also capitulated as well. That includes Nouriel Roubini, Zero Hedge, and David Rosenberg. Many sentiment measures are at more extreme levels than the all-time high in 2007 yet the market is not at a new all-time high. With the U.S. Dollar set to commence a major bull market and deflation straight ahead, the sentiment picture now is the mirror opposite of March 2009, which makes the conditions ripe for a major top.