Friday, October 10, 2008

No market goes down without a rally

This continued sell-off will not last until the market goes back to 0.

Even the worst markets go up over a short amount of time. Even in the Weimar republic, inflation eased when the printing presses were jammed :-)

Weimar Republic (aka Germany):
Germany lost WWI but in contrary to WWII, the USA decided not built up Europe from the ashes. A Treaty in Versailles was signed where the "winners" declared that the losers had to pay for the devastation and some. Germany was broke and the only way to pay someone or some country was by printing money from the printing presses. They had 33 of those lovely printing presses. It was not backed up by anything, the "newly printed" money made the "old" money worthless.(more supply of money makes the money worth less) People in the Weimar were paid TWICE a day and then got half an hour to do some shopping or buying whatever they could afford. The next paycheck, would go up in "numbers" but it didn't buy as much as before...

1923: This is one of the most famous pictures from that period: a woman feeding her fireplace with German marks

Apparently in May 1920 the printing press got jammed:
German mark prices of Silver and Gold from January 1919 to November 1923 in the Weimar Republic:
Jan. 1919 Silver 12 Gold 170
Jan. 1920 Silver 84 Gold 1,340
May 1920 Silver 60 Gold 966
Jan. 1922 Silver 249 Gold 3,976
Jan. 1923 Silver 23,277 Gold 372,447
Aug. 7, 1923 Silver 4,273,874 Gold 68,382,000
Sept. 4, 1923 Silver 16,839,937 Gold 269,429,000
Oct. 23, 1923 Silver 7,253,460,000 Gold 1,160,552,662,000
Nov. 13, 1923 Silver 108,750,000,000 Gold 17,400,000,000,000
Nov. 30, 1923 Silver 543,750,000,000 Gold 87,000,000,000,000

At some time in the not too distant future, probably next week, stockmarkets will rally. DOW 7500 - 8000 should provide some decent support, just like 10 000 ...

If we drop below 7500, there is NO support until we reach 4000. That is a scary thought. you don't want to envision what would happen if that would be the case.

This is a chart of the DOW 1960 - 2008, numbers on the vertical axes start with 1000 and go up with 500. It's a logarithmic scale.

1000 on the DOW is solid support...

I wonder if they CAN RE-VOTE a bill that already has passed the House and the Senate?

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