Due to AMERICANS bailing out BANKS, confidenced has once again soared in the markets, bringing the dow up 400 points, or 5% of the opening day. Since it is National Exploitation of Cultures Day, or Columbus Day for short, trading will be light.
‘”The global markets are giving a nod of approval to what the governments, central banks and the U.S. Treasury are doing to boost confidence in the market place,” Peter Cardillo, chief market economist at Avalon Partners, told Reuters.
“What we could see is a market that begins to stabilize,” Cardillo said. “Obviously there’s some questions about the plans. Are we going too far? Are we all becoming socialist? But the bottom line: the market needed to get some concrete plan and I think finally we’ve gotten something that’s going to restore confidence.”‘
However, many are worried that the ongoing financial assistance to banks may cause hyperinflation. For those of you who don’t know what that is, let me break it down for you.
Hyperinflation is a type of inflation that is “out of control”, a condition in which prices increase rapidly as a currency loses its value. Formal definitions vary from a cumulative inflation rate over three years approaching 100% to “inflation exceeding 50% a month.” It’s noticeable say, during wartime, economic depressions, social/political upheavals. I love wikipedia 😉
This would be destructive not only to the dollar, but the euro and the sterling.
Martin Henneck, a senior manager of private clients at Tyche told CNBC:
“The privatization of the banks is the first step down the road to hyperinflation,” Hennecke said Monday. “Maybe we are not seeing the Zimbabwe-style (hyperinflation), but inflation is a major major risk and investors should look at this very carefully.”
Todd Everts, president and CEO of Wall Street Global, disagrees with this statement, saying that a worsening trade deficit would help to ease inflation. Also, that if we were hit with hyperinflation, it wouldn’t be as bad in say, Zimbabwe or Argentina.
Also, Fox News needs to back off of Jim Cramer for advising investors to sell during the hellish last week of the markets. They seriously make it seem as if this guy controls the market. I think the last thing they wanna do is get cussed out by the guy who hosts Mad Money. Everytime he speaks, an investor gets its wings 🙂