Tuesday 24Jul2012 - My 5 Cents Worth!

This is what happens to a country's stock markets when it enters a secular bear market. Now perhaps most of the worlds economies are entering multiyear secular bear markets.

The Japan Nikkei Index peaked at 40,000 in 1990 and has been trending lower ever since. Their central bank has basically lowered interest rates to near zero and flooded the system with sovereign debt now around 200% of GDP, and it has not helped one iota. Twenty-two years later there is no economic recovery in sight and the index is down 77% at 9217.

Italy along with most other European countries has now entered its multiyear secular bear market. Unfortunately its currency is the common eurozone currency the Euro. So it does not have its own central bank to print money like Japan and the USA and Canada, etc. Its stock market index is now down 72% from its 2008 peak.

Can the USA and Canadian stock markets be far behind with investors finally recognizing that Bernanke's helicopters creating billions of dollars out of thin air and throwing them into the financial systems are having less and less and less effect on trying to engineer an economic recovery.

Preservation of Capital is very important at this juncture; and CASH is a position. And as well now one can go long inverse ETFs that make money for you when equity markets decline and the Euro marches toward parity with the US dollar.