This is a response made to someone on a investment board who insists the evil banks caused the present problems in the USA. This will likely offend some so if you are one who like to blame others you might want to give this a pass.

Wow clearly not so well informed. Gather you have been listening to barestearn. LOL No I am sorry to say you cannot blame the banks for the present state of things regards housing and the ecom.

1st it is not the banks that decides about easy money or tight money. This is but a smoke screen to the avg Joe. It is in fact your gov at work. THEY decide easy or tight money. And for YEARS the gov has walked a very negative course so you the people could live beyond your means. And like so many you refuse to except responsibility, it is so easy to blame the greedy banks.

Point is thru the PPT (plunge protection team) the secret group set up to prevent 1987 again (PS before you blab about PPT being illusion be aware Greenspan stated it existed, and no minutes have ever been public, EVER) the gov has infused great hordes of funds to MANIPULATE the markets to the upside. In fact M3 (the number the gov suspended without reason couple years back; why is that? LOL) was showing money growth running over 10% per year. I am talking last 8 years or so.

At the same time they EASED bank conditions to lend money. How can they do that? SIMPLE. The banks are regulated, that means the GOV decides their risk exposure. And when money supply was growing over 10% gold and oil and base metals were going nuts and reported inflation was 2% (ya right, you know that gov ADJUSTED NUMBER) they let the banks GIVE AWAY MONEY. So what happened? The house ATM machine was invented. People could borrow more against their home, rates were low, housing took off and people spent just like their gov, they borrowed and bought whatever they wanted.

Result. A couple years ago gov had to make a decesion, support the dollar or keep printing vast amounts of money to support the ecom. So what did they do. Well they took HALF MEASURES. They tightened by of a sudden telling the regulators to instruct the banks to STOP the easy money, tighten up you have bad loans. This as the housing market cooled down, before the real down turn in housing. The banks must follow regulators or else! However they still kept putting money out to support the markets and what ever else they wanted to inflate. So still large amounts of money printed BUT used for non expanding ecom, but inflationary.

Well smart money knew what was going to happen, you cannot print money at a rate of over 10% every year for years without something giving. So the US dollar was no longer wanted (see thats the real problem, other countries own US dollars, IE LOANS to gov), the US was printing to much money and LYING about it. Gold goes to over $1000 oil goes over $100 yet STILL the gov claims inflation low. Come on get real.

So here we are, people have lived beyond their means, gov has lived beyond their means and now something MUST GIVE. The ecom and the dollar CANNOT be supported. The gov was trying to go the middle ground and that did not / will not work. So will it be a ugly depression, or inflation first then a induced depression down the road, only your wonderful gov will decide which and you can tell by the rate they print money, oh wait you cant tell because they no longer publish the M3 numbers, just like they never publish the actions of the PPT. And to think some actually believe the US gov does not take part in lies, manipulation, and deceiving their people. LOL

So whose fault is it. Simple. Its the fault of the gov and the people who have insisted on living beyond their means. Time has come to pay the piper.

This of course this is a broad based concept and does not imply that any one person is solely responsible for their present state, it does however mean they play a HUGE role in their present state.

But it is real easy to just blame the greedy nasty banks who made people borrow and forced the gov to print hordes of money.

But don’t worry, this is just a outside perspective as I am not American. All I know is I will not be going long the US stock market or the US dollar any time in the near future.

Others views are welcome.

Markets and Elliott Wave Theory

With Mondays action and all the so called reasons for the market draw down I figure it wise to offer another perspective. I enjoyed studing Elliott Wave theory for many years and it has greatly changed my thought process regards investing/trading.  Now in the past I have done many different types of trading including Forex and day trading S&P, Naz100, R2000 index futures. I strongly believe that ALL traders/investors should have a basic understanding of EW theory, or at least be aware of long term wave count. Their are free sources. Following a monthly report on long term wave counts is a wise idea, then you don’t even need to understand EW theory. By the way are you aware that MOST Forex TA traders use or at least have a working knowledge of EW theory.

Below a repost from ragingbull BQI board to my friend Capt Jack

Yes I used Elliott Wave International (EWI) for many years. They have some great stuff. I even used their live market futures service for awhile, but this is only good for active day trading of market index future contracts. They have report that comes out 3 times a week for overall markets and this is handy for short term traders. BUT for most I would  recommend their monthly Financial Forcasts it will keep you abreast of overall markets short, mid, and long term trends.

However I found some better more cost effective sources for EW.
FREE (with daily updates, he promotes his Objective EW theory) at

http://caldaroew.spaces.live.com/

PS He puts markets in a A wave down which is EXTREME bad news for the bulls as that means a lot more sideways to down left in this NEW bear market, IE this is but the first leg down this last year.

See the monthly S&P chart

I will need to look up the other link for another EW guy who has daily reports at a good price.

The link for that is Technical Indicator Index

PS I will be doing up a penny/high risk stock trading system in the near future and will be posting free stuff at my website forex.earninternet.com

NOTE EW does not work well for penny or low cap stocks; in fact many large cap do not track EW well. EW works best for overall markets as it takes a lot more money to manipulate them so really only the PPP has short term effects to EW patterns.