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ps-- the Treasury has stopped buying debt from banks and started buying equity. we have a state-run banking system. banks WILL lend. but even if they don'tit doesnt change the inflationary argument at all.
Official Stock Market & Economy Thread
- Thread in 'General' Thread starter Started by dey know yayo,
- Start date
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american banks aren't the source of inflationary excess liquidity. they possibly could be part of it, but definitely not the primary place consumers willbe getting excess liquidity. that excess liquidity will come from creditor nations and defiicit spending-financied government programs, primarily creditornations,
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deflation's affect on the US Dollar has come and gone, through the great deleveraging which propped up the USD greatly during the market crash.
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Even if price deflation occurs because of a liquidity trap, gold will go up in nominal and real prices, because its supply/demand is not affected by the wealthdestrcution of American consumers. Its supply/demand is affected by banks and central banks, which will try to leave the USD while they can. They realize theUS Dollar's structural weakness and will start buying gold for its reserves (like i said, China and Iran have already started). Price deflation will not berepresentative of the USD's strength or weakness on the short run. Eventually a run on the USD will occur and so will rampant inflation. Gold is a betterposition than cash, even if deflation occurs (which it won't).
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Oh wait.
So the source of excess liquidity will be lender nations calling in their loans thereby flooding the global economy with USD.
I find this highly unlikely for the simple reason that it would be tantamount to a declaration of War. The US has gone to war for far less.
The question begs, how will the US pay for this war if it isn't being lent money?
Well in the case of Japan, the US has 50k troops in Japan. I guess in the case of China we do have nuclear weapons. They're already paid for andoperational. Doesn't take much money to launch a few missiles That's how the politicians would look at it.
I However, when it comes to China lets not forget that China is heavily dependant on the US to build up its infrastructure. The US taxpayer, through corruptcorporations who routinely 'cook the books' has been building up China's infrastructure for almost 3 decades now. China needs the US just as much,if not more than the US needs China.
ydbounce
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is there anywhere reputable and government backed that I could check for unclaimed money?
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creditor nations are conceding defeat and beginning their organic domesticized growth attempts. iran has said it is switching its reserves to 100% gold andchina is buying huge gold amounts. creditor natiosn are becoming net sellers of us treasuries.
i definitely see war as a possibility in all of this. the fact is, there is much more currency already than is backed by actual economic production. we wereonly able to run a huge trade deficit for such a long time while keeping the USD artificially strong because there was demand for it as the reserve currency.creditor nations are now realizing the structural weakness in it, and are even mroe put off by the additional deficit spending financed through QE that isabout to take place. on top of that, these nations now realize running huge current accounto surpluses only works as long as american consumers have hugeartificial wealth. now that wealth destruction is occuring and dollars are being printed like no ones business, there is a huge edmand contraction for USD,which is showing in foreign exchange reserves and in the dollar's exchange rates recently. opec nations are huge creditor nations to america, they woulddefinitley call in their loans and buy commodities with the money. the communist party will definitely lose credibility in china, the only credibility they didhave was they were able to make a lot of money and grow their economy by exporting so much. now that trade surpluses alone can't make you grow, theridiculously inflated GDP growth numbers and ridiculously undervalued currency China's govt issues is going to be taken offensively by the Chinese and theywill demand wealth be brought back to Chinese citizens themselves. that will definiltey spark a run on the USD.
it would take decades upon decades for the economic growth necessary to bring the USD's current supply and valuation to reality... creditor nationscan't and won't stall for that long.
and don't forget the government is essentilly going to cover your mortgage if you've fallen on hard times. again with printed money. that's moreexcess liquidity reaching the DOMESTIC american economy.
bernanke has said he will buy us debt from creditor nations. teh fed will buy american issued debt. with dollars. this will happen and will cause excessliquidity reaching the global economy,
i definitely see war as a possibility in all of this. the fact is, there is much more currency already than is backed by actual economic production. we wereonly able to run a huge trade deficit for such a long time while keeping the USD artificially strong because there was demand for it as the reserve currency.creditor nations are now realizing the structural weakness in it, and are even mroe put off by the additional deficit spending financed through QE that isabout to take place. on top of that, these nations now realize running huge current accounto surpluses only works as long as american consumers have hugeartificial wealth. now that wealth destruction is occuring and dollars are being printed like no ones business, there is a huge edmand contraction for USD,which is showing in foreign exchange reserves and in the dollar's exchange rates recently. opec nations are huge creditor nations to america, they woulddefinitley call in their loans and buy commodities with the money. the communist party will definitely lose credibility in china, the only credibility they didhave was they were able to make a lot of money and grow their economy by exporting so much. now that trade surpluses alone can't make you grow, theridiculously inflated GDP growth numbers and ridiculously undervalued currency China's govt issues is going to be taken offensively by the Chinese and theywill demand wealth be brought back to Chinese citizens themselves. that will definiltey spark a run on the USD.
it would take decades upon decades for the economic growth necessary to bring the USD's current supply and valuation to reality... creditor nationscan't and won't stall for that long.
and don't forget the government is essentilly going to cover your mortgage if you've fallen on hard times. again with printed money. that's moreexcess liquidity reaching the DOMESTIC american economy.
bernanke has said he will buy us debt from creditor nations. teh fed will buy american issued debt. with dollars. this will happen and will cause excessliquidity reaching the global economy,
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http://www.bloomberg.com/...d=aFgHlh.Dn4Lc&refer=news
http://www.chinadaily.com...12/25/content_7338279.htm
http://economictimes.indi...t/articleshow/3731109.cms
http://www.reuters.com/ar...Oil/idUSTRE4AE1F820081115
http://www.nytimes.com/20...ml?_r=1&ref=worldbusiness
"In 1934, facing a depression President Roosevelt first confiscated gold from every American. Then, he unilaterally devalued the U.S. dollar by 75 percentagainst gold. At a stroke, FDR wiped out 75 percent of the dollar denominated debt of the U.S. Treasury. As both President-Elect Obama and Fed chairmanBernanke are students of FDR, we face the real possibility of a massive devaluation of the U.S. dollar against gold in 2009." - John Browne.
http://www.chinadaily.com...12/25/content_7338279.htm
http://economictimes.indi...t/articleshow/3731109.cms
http://www.reuters.com/ar...Oil/idUSTRE4AE1F820081115
http://www.nytimes.com/20...ml?_r=1&ref=worldbusiness
"In 1934, facing a depression President Roosevelt first confiscated gold from every American. Then, he unilaterally devalued the U.S. dollar by 75 percentagainst gold. At a stroke, FDR wiped out 75 percent of the dollar denominated debt of the U.S. Treasury. As both President-Elect Obama and Fed chairmanBernanke are students of FDR, we face the real possibility of a massive devaluation of the U.S. dollar against gold in 2009." - John Browne.
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Its probably not a good time to start investing in stocks right now right? I was thinking about reading more up on it and putting in about $1,500 but i'mnot sure if its worth it. Also i was wondering what kind of profit do people make on average that do well with stocks?
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Don't be buying stocks, that's for sure. We could get a decently strong bounce in equity prices around march to june, but that is pure speculation atthis point. people who are decently well at trading often get 70%+ returns annually. good ones can get 110%+ returns. the best can get 300%+ returns. untilliquidity starts limiting your profits.
for more inflationary data/arguments:
"Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called aprinting press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing thenumber of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goodsand services, which is equivalent to raising the prices in dollars of those goods and services." - Ben Bernanke.
http://www.chartpattern.com/Charts/DEBT-10-05-08.gif
http://tradesystemguru.co...ourceBasei-Dec12-08-6.jpg
http://tradesystemguru.co...08/Dow-Gold_Dec5-08-3.jpg
"Anyone who reads the written works of our Fed Chairman knows that Bernanke's long term plan involves devaluing the dollar against gold. He oftenextols the virtues of former President Franklin Roosevelt's gold revaluation/dollar devaluation, back in 1934, and credits it with saving the nation fromthe Great Depression. According to Bernanke, devaluation of the dollar against gold was so effective in stimulating economic activity that the stock marketrose sharply in 1934, immediately thereafter. It is only a matter of time before gold is allowed to rise to its natural level. Assuming that about half of thecurrent increase in Fed credit is eventually neutralized, the monetized value of gold should be allowed to rise to between $7,500 and $9,000 per ounce as theworld goes back to some type of gold standard. In the nearer term, gold will rise to about $2,000 per ounce, as the Fed abandons a hopeless campaign to supportCOMEX (New York Mercantile and Commodity Exchange) short sellers, in favor of saving the other, more productive, functions of the various banks andinsurers."
- Dr. James Conrad
http://www.ritholtz.com/b.../12/shadow-gold-price.png
"To identify the intrinsic value of the dollar today, we examine the corollary - the intrinsic value of gold in dollar terms, which we dub "TheShadow Gold Price" (SGP). To do so we assume that Federal Reserve Bank liabilities are again exchangeable into gold (recall, FRB reserves are bank assets- the stuff that used to have to be gold). As we discussed in "A Not-So Modest Proposal", one would simply divide the dollar amount of current Fedliabilities by official gold holdings. This calculation, while simple, is intellectually honest and produces a breathtakingly large "equilibrium"gold price of approximately $9500 per ounce today ($2.5 trillion divided by US official gold holdings of 8100+ metric tons)."
http://seekingalpha.com/a...nipulation-of-gold-prices
http://seekingalpha.com/a...ource=article_lb_articles
for more inflationary data/arguments:
"Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called aprinting press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing thenumber of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goodsand services, which is equivalent to raising the prices in dollars of those goods and services." - Ben Bernanke.
http://www.chartpattern.com/Charts/DEBT-10-05-08.gif
http://tradesystemguru.co...ourceBasei-Dec12-08-6.jpg
http://tradesystemguru.co...08/Dow-Gold_Dec5-08-3.jpg
"Anyone who reads the written works of our Fed Chairman knows that Bernanke's long term plan involves devaluing the dollar against gold. He oftenextols the virtues of former President Franklin Roosevelt's gold revaluation/dollar devaluation, back in 1934, and credits it with saving the nation fromthe Great Depression. According to Bernanke, devaluation of the dollar against gold was so effective in stimulating economic activity that the stock marketrose sharply in 1934, immediately thereafter. It is only a matter of time before gold is allowed to rise to its natural level. Assuming that about half of thecurrent increase in Fed credit is eventually neutralized, the monetized value of gold should be allowed to rise to between $7,500 and $9,000 per ounce as theworld goes back to some type of gold standard. In the nearer term, gold will rise to about $2,000 per ounce, as the Fed abandons a hopeless campaign to supportCOMEX (New York Mercantile and Commodity Exchange) short sellers, in favor of saving the other, more productive, functions of the various banks andinsurers."
- Dr. James Conrad
http://www.ritholtz.com/b.../12/shadow-gold-price.png
"To identify the intrinsic value of the dollar today, we examine the corollary - the intrinsic value of gold in dollar terms, which we dub "TheShadow Gold Price" (SGP). To do so we assume that Federal Reserve Bank liabilities are again exchangeable into gold (recall, FRB reserves are bank assets- the stuff that used to have to be gold). As we discussed in "A Not-So Modest Proposal", one would simply divide the dollar amount of current Fedliabilities by official gold holdings. This calculation, while simple, is intellectually honest and produces a breathtakingly large "equilibrium"gold price of approximately $9500 per ounce today ($2.5 trillion divided by US official gold holdings of 8100+ metric tons)."
http://seekingalpha.com/a...nipulation-of-gold-prices
http://seekingalpha.com/a...ource=article_lb_articles
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The devaluation of the USD is almost certain.
Roosevelt also confiscated gold from the American populace. Unless the gold held was antique/collector pieces, all gold had to be brought in and exchanged for[newly devalued] USD. The bankers work in wonderful ways.
I do see a major war on the horizon if only because many nations need a war at this time.
The major holders of US debt are Japan and China and I don't see them taking unilateral moves to call in their loans. It will most likely be a globaldevaluation of fiat currency in which case inflation will not be a major problem.
t0xicman
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Hey all,
A lot of useful information in here.
I just had a couple questions/concerns and wondering if anyone can help me out.
I want to be a well rounded investor; short-term/long-term with a firm understanding of fundamental and analytical analysis.
Im confident in my short-term trading/analytical analysis; I use various technical indicators with Bloomberg/Reuters for up-to-date news.
However, LONG-TERM has got me confused as hell.
1) I do not trust any analyst/opinions for the simple fact that they are 90% wrong, all they do is take the current stock price add 10-20% and say "sell,neutral, or buy"
2) I am trying to figure out how bubbles occur and when they pop. I was trying to correlate some indicators that occurred in this crash and the crash of2001/2002 but with little evidence. What im saying with this, its easy to put your money and hope for it to grow, but the Better/smart investor knows when toget out...which im trying to find out.
The only thing i came up with is if a lot of companies are missing thier EPS projections or lowering them, get out of the whole stock market..
what are your inputs?
A lot of useful information in here.
I just had a couple questions/concerns and wondering if anyone can help me out.
I want to be a well rounded investor; short-term/long-term with a firm understanding of fundamental and analytical analysis.
Im confident in my short-term trading/analytical analysis; I use various technical indicators with Bloomberg/Reuters for up-to-date news.
However, LONG-TERM has got me confused as hell.
1) I do not trust any analyst/opinions for the simple fact that they are 90% wrong, all they do is take the current stock price add 10-20% and say "sell,neutral, or buy"
2) I am trying to figure out how bubbles occur and when they pop. I was trying to correlate some indicators that occurred in this crash and the crash of2001/2002 but with little evidence. What im saying with this, its easy to put your money and hope for it to grow, but the Better/smart investor knows when toget out...which im trying to find out.
The only thing i came up with is if a lot of companies are missing thier EPS projections or lowering them, get out of the whole stock market..
what are your inputs?
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wawaweewa- we don't have a hard asset back currency, so USD "devaluation" occurs in the form of INFLATION like i've been saying. also, surejapan and china are huge creditor nations but don't forget OPEC nation are a close third and iran itself has more than enough debt held to spark a run onthe dollar. india's and china's currencies would surge in the event of USD devaluation, thus there would be rampant inflation in terms of USD, EUR,GBP.
toxicman- bubbles occur often due to credit expansion which allows financing of assets that dont merit investment. malinvestment and malappropriation of fundsdoesn't happen when credit costs (interest rates) are kept in equilibrium. long term investing works only if you can predict with certainty that theeconomy whose market youre investing in is going to grow long term. not the case right now, probably will be the case in 15 years though.
toxicman- bubbles occur often due to credit expansion which allows financing of assets that dont merit investment. malinvestment and malappropriation of fundsdoesn't happen when credit costs (interest rates) are kept in equilibrium. long term investing works only if you can predict with certainty that theeconomy whose market youre investing in is going to grow long term. not the case right now, probably will be the case in 15 years though.
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Most OPEC nations, save a few, are US lackey's. They only do what the "7 sister" allow them to do.
India's and China's currency's would appreciate in the even of a USD devaluation of free market forces were allowed to operate. However, China andIndia would not allow that to happen. They'll fiddle with their currencies (just like they do now) and allow only minor, if any, appreciation.
Most of the world is not decoupled from the USD or the American economy yet. Decoupling will take many years.
Until then the rest of the world is tied to the USD.
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China and India have to de-link their currencies from the USD to spur any domestic growht, which now they have to because the consumes of their products(americans) no lonnger have the artificial wealth to keep buying them. Decouping like you said will take a long time but foreign nations realize they can'texport their way out of this and will eventually be forced to start de-pegging currencies nad bringing purchasing power back to their own citizens.
iran is not a US lackey.venezeula is not a US lackey. both huge creditor nations.
iran is not a US lackey.venezeula is not a US lackey. both huge creditor nations.
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Market's open bump.
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Not much should happen for the rest of the week. It's gonna be a slow week. Next week though ...
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Big move down coming starting this Friday probably. I'm guessing a sell off to at least November lows, then we may rally from there. Like I said,commercial real estate stocks are about to tank (stocks like SPG VNO BXP O) and ultrashort ETFs are about to surge (SRS SKF FAZ BGZ).
BUY GOLD NOW. The US bond bubble looks about ready to collapse (look at TBT, which ultrashorts US 30 year treasuries, looks ready to break out of a pivotpoint) and currency charts liek EUR/USD are showing very bullish patterns. I think this may be the beginning of the end of the US Dollar. Buy gold bars andgold miner stocks (AEM RGLD IAG GOLD) now.
Gold is at $875/oz. right now, watch it surge from around this level.
BUY GOLD NOW.
BUY GOLD NOW. The US bond bubble looks about ready to collapse (look at TBT, which ultrashorts US 30 year treasuries, looks ready to break out of a pivotpoint) and currency charts liek EUR/USD are showing very bullish patterns. I think this may be the beginning of the end of the US Dollar. Buy gold bars andgold miner stocks (AEM RGLD IAG GOLD) now.
Gold is at $875/oz. right now, watch it surge from around this level.
BUY GOLD NOW.
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dey know yayo. i think you should write for forbes or something because you give good info similar to some of the guys at forbes
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Dey Know Yayo, where do you buy gold from? Or do you suggest buying gold stocks like ABX or GG?
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What's a good place to buy gold from? I was going to tell my uncle get some from the middle east because I heard it's cheaper but who knows. Deflooking into it though.
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i recently bought some gold at the local jewelry store and its kinda complicated. they charge a fee so its a little over market value. some charge90 dollars over market value some charge 20. get them in nuggets or little plates and there are ones with a paper to verify the plate, similar to a certificateof authenticity. but maybe middle east is a good spot. i think third world countries offer good prices for them but im not sure.
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If Ahmadenijad and Chavez are still in power all of these years they aren't as big of 'enemies' as the US government would have everyone believe.
The game will be played for the foreseeable future. Their oil is useless in the ground and they don't control the distribution networks. They still have toplay according the 'rules'.
China has been feeding America's overconsumption because they need it just as bad as our gov't does. In order to substitute for American consumption,China's consumption rate would have to hit in the vicinity of 40% of GDP. That's not going to happen. In fact, in a recent article, a Chinese gov'tofficial said that China has all but given up on that notion.
China is hoping to stave of civil unrest by introducing their 'stimulus' which will mainly be targeted at rural areas into which migrant workers arereturning.
I think that you may be calling it a few years too early.
Purchasing gold is essential though. If only as a store of value. The price of Gold will not be dropping anytime soon (apart from daily fluctuations), that wecan be sure of.
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How exactly do I go about purchasing a few 10oz. gold bars, got a reputable source to buy from?
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Government is puppetry for the ultra wealthy. They are all just actors. This world "needs" a war for the king to remain the king. There willcertainly be a major war very soon.
I see the Dow going to less than 3k.
I see the Dow going to less than 3k.
