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Twilight Zone!

February 18, 2014

Do you ever wonder how our markets seem so amazingly resilient? Overnight, the Nikkei was up well over 400 points on top of other recent market surges. So what gives? Here is the news supporting why the Japanese market is making its comeback.

Japan’s Nikkei share average soared to a 2-1/2-week high on Tuesday, led by the banking sector after the Bank Of Japan said it would extend loan facilities by a year at its policy meeting. As widely expected, the BOJ kept monetary policy steady and maintained its upbeat assessment on the economy. It also decided to extend three special loan facilities by a year from their scheduled expiry at the end of March.

Gee, what a surprise. Japan’s central bank has given the economy their stamp of approval and extended their ultra-easy money policy. Shocker! I was so worried they might do something different! Now I don’t have to worry about our world economy being over-extended, over-leveraged, over-indebted, over-manipulated, over-indulged, etc, etc, etc….

Ladies and gentlemen, one day students will read history books on these current times and ask, “What were they smoking? Were they living in a twilight zone?”

I, myself, prefer a different hypothesis for why our financial markets bounce back; I believe it is because the melt-down is too early. You see, on May 9, 2013, in my blog with the title Prediction, I suggested that we had one year left before this present bubble would blow. It was based on my very analytical research showing that it was almost exactly one year after Greenspan, Rubin and Summers had been given the title, “The Committee to save the World” on the cover of Time magazine in 1999 that the Dot-com collapse occurred. In April 2013, Ben Bernanke graced the cover of Atlantic magazine with a bold caption under his smiling face reading, “HERO.” Hence, one year from April 2013 would mean April 2014 will be the next blowup. Pretty impressive research, hey?!?

At any rate, when markets started showing problems in January and February, I was quite concerned that my prediction was going to be a couple of months too late. Now I don’t have to eat crow — yet!

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