Hey folks, go back four years. Weren’t they saying business was really going to rally under Obama?
How did that work out? Why should we believe them now?
“Oh pleeeeese, just one more chance, just one, I’ll be good...”
Guy is nine years old I’m tellin ya.
Investors, however, seem to be following a different line of thinking. They are responding to two entirely different hypotheses.
1. The economy is doing well. That was the news in the latest unemployment report. Therefore it makes sense to own stocks and gold. As the economy improves, more people will borrow and spend. As they do so, interest rates and consumer prices will rise. Businesses will do better as their sales rise. Higher inflation rates will cause gold to go up, too.
2. The economy is not doing well. And the worse it does the more pressure builds on central bankers to ‘do something.’ What can they do? Only add more cash and credit. More liquidity will send both stocks and gold up.
Now, you will look at these two hypotheses and think you have discovered a sure thing, no? A can’t-lose proposition, right? Either the economy is doing well. Or not. Either way, stocks are going up! Win…win…right?
Wrong!
I’ll say this about Obama -
He has behaved EXACTLY as anybody with a decent understanding of his past history would predict.
No honest person can say he’s been a surprise.