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On the stockmarkets they seem to be chugging along as though nothing major is about to happen. Whilst the US advance/decline line shows a gradual decrease in the majority of stocks this is active profit taking and gearing up for a probability on Y2K. Hedging ones bets (Mutual Funds have on average 22% in cash).

After hours trade is positive as well.

http://www.cme.com/cgi-bin/gflash.cgi

Oz has the horrible problem of having a new tax introduced so the economy will be bullish up until July 1. Then what? This is scary. I can see a recessionary climate after the olympics. A gross slowdown in the economy. Should Asia perform better than expected then this will be offset somewhat with the increase in exports yet our deficit in trade has to be addressed sooner and later. Our external debt keeps rising to the chagrin of our trading partners.

Lets us assume that the Fed's will not increase interest rates Dec 21. Techically they *can not* as this would be counter productive to the whole liquidity thingy coming up to 2000. The next meeting is Feb 2000, then they will have PPI and CPI indices with a rising oil price well and truly reflected in the figures.

Interest rates technical should increase. They have to soak up this liquidity and put the brakes on therefore a tightening bias. If their (US) markets do adversely react then the flow on would be immediate to Oz and therefore a recessionary climate would be induced well before it is planned.

Inflation is evident in debt and the sharemarket. The simple point is that with fiat money and the amount of liquidity being generated to 2000 the system thereafter cannot cope and inflationary pressures will rise and this will be an endless cycle. Back to the old boom bust situation!

Any other views? Am I wrong?
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I couldn't see a bubble before but after the last month I do. When will it burst? I was reading some old magazines(1996 I think)and some US stock gurus were predicting the Dow would peak at 6500 then crash to possibly 4200. Like you say John, only gamble with what you won't miss.
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