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01/03/2011

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BJ

Well, here is why the stock market is doing well, but the average American is having trouble affording health care, food, and utilities.

"Several experts say that the main forces behind the bull run in commodities last year, namely strong economies in emerging markets coupled with worries about the health of the U.S. and Europe, are likely to remain in place this year."

""The economic improvement in the U.S. is not as rosy as you might think. The Fed is going to have to continue printing money and that makes gold extremely attractive," Beahm said. "

"At the same time, the robust economic growth in China, India, Brazil and Russia should lead to more demand for oil, industrial metals like copper and palladium and agricultural commodities like wheat and corn."

""Emerging markets helped drive demand for commodities across the board so we are still bullish on commodities," said Oliver Pursche"

http://money.cnn.com/2011/01/03/markets/thebuzz/index.htm

Where is the bubble? "Emerging markets". If you can tap into that bubble, you will have a stellar year, even if the average American is on food stamps. Increasing commodity and gas prices, along with the average household incomes being equal to what was in 1997, should push more folks onto food stamps, and probably more people into foreclosure.

The only way things will improve for the average American is if tons more debt is created, to account for the lost incomes and increased prices. Now the federal government is more than willing to accept more debt, perhaps because they aren't faced with 20-30% interest rates, as is the case for the debt ridden consumer.

The question is, how much public debt is enough?

Steve Addy posted this on CNN:

"Asking whether the rally will 'stick' is like asking whether the Fed will stop pumping money into it...really, come on, the market is buoyant because of the Fed spigot is running full blast. The govt spent 5.7 trillion last year to get a 100 billion increase in GDP. Anyone see anything wrong with this picture?"

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