Dow getting ready to head towards 5000, oil $20 a barrel and gold $240 an ounce
Peter Oberois
Oct. 28, 2006

How is that possible you may ask. But that is how the markets behave. The collapse in 2000 was just the start of wave one down wards. The wave two in reverse direction is getting completed with horrible fundamentals.

You may ask if the corporations have increased the earnings so well how can they collapse. Like options back dating the companies have systematically manipulated the books – it will Enron after Enron in coming years. Cost cutting and outsourcing was helpful but that will now backfire because the economy collectively lost its purchasing power. Look at the books of every corporation. You will see changes in accounting system and systematic manipulation. The only sector that was really successful was the lending sector. That bubble has busted with real estate and will lead the way into a deflation plagued depression never seen in the world before.

When Dow breaks through 10,000 it will take months to reach 8,000. After that some counter trend rally – and then the long term bear market will resume. If you consider gold as a currency and plot Dow for the last six years, you will realize how poorly Dow has performed compared to gold. Governments can print money and create artificial prosperity in stock prices but it cannot control the destiny and gold prices. In coming years as Gold and oil start their collapsing trend, the stocks will follow suit. The world is plagued with relative wage deflation in China and India. The lack of buying power of the people will collapse commodity prices in coming years.

Dow getting ready to head towards 5000, oil $20 a barrel and gold $240 an ounce
Peter Oberois
How is that possible you may ask. But that is how the markets behave. The collapse in 2000 was just the start of wave one downwards. The wave two in reverse direction is getting completed with horrible fundamentals.
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