Bankruptcy, DOW, HSI

2010
This may be a good year for business but not for the stock markets as the excess money supply will boost demand but not for long. The stock markets, looking ahead, knew the economy will come slack soon thus driving it down unless we see more government promises.

Many bankrupt countries and regions
Most so called developed countries are bankrupt, why?
• Spending beyond their means for far too long;
• Wasteful government;
• Democracy lead to vote buying promises which in turn leads to uncontrolled spending, indecisive costs cutting;
• Aging – this is most devastating as population into middle age or above will consume less which makes the economy more difficult to climb out of the current doldrums. It also leads to more welfare and medical care demand since many pensioners are not ready by themselves to retire nor have enough resources for any major illness.
• The current financial crisis led to blowout involvement in the finance sector deficits of which cannot be repaid within even one generation;
• Growth – any growth in the economy will not translate into real growth for her citizens as there is too much unpaid debt, just look at South America in the 80s, if no debt is forgiven, it will translate into everlasting debt like credit card debt of a consumer.
• Do not forget that every now and then, recession will creep in which slows down the debt repayment and starts building up new debt if current excess debt cannot be repaid within one economic cycle.

Continuous decline - DOW
Dow will start declining after reaching 11300-11500. Unless coupled with another round of money printing, it will decline like that of Japan’s Nikkei, rebounding when a support level is reached, after which it will resume declining.

HSI
Read my blog of 30 Aug, I already forecasted Dow reaching 11,000. It hit 10950 last Thursday ie 25 March. The strange thing is HSI is way below its old high, therefore it is highly likely that when Dow does reach 11300, HSI will reach between 23200 and 24400.