Let's cut the crap
143 replies to this topic
Posted 19 May 2003 - 08:41 PM
Inflation/deflation....who cares. We don't need to get into long drawn out monetary explanations of why either is occuring (or should occur) because what really matters in most people's minds is whether prices they pay are going to go up or down. No question they are going to head lower. Why? The sheeple have no money in their pockets and they are running out of ways to get their hands on more. Al can pump the money supply by a trillion dollars a day but if it doesn't get in J6P's pocket, it doesn't matter one whit as far as retail prices go. "But service like insurance and health" and on and on are going up. Not for much longer. They will feel the pinch soon enough. Even oil is vulnerable not too far down the road depending on OPEC's bugger thy neighbor. Even NG is vulnerable to electrical demand.
The problem most of you have is you don't honestly believe things will get as bad as Hypertiger has alluded to or I have hinted at in the past. You're wrong. I have probably underestimated the damage that is set to occur if anything. I don't know what's up exactly (perhaps mercury has retrograded right up Jupiter's ass) but the tension in the sheeple is palpable. Not good....not good at all. Bankruptcies are hitting new highs (daily) and that means foreclosures are trending right along. I think we have reached the aggregate point where the defaults are starting to overwhelm the new loans even at these lofty levels of origination in all types of loans. The only people left to suck into the credit matrix are the homeless crack dealers that moonlight as prostitues. And most of them are already driving new Lincoln Navigators which they park in their new house they just put $100 down on and furnished with no money down and no payments for 20 years.
Unemployment is going to get much, much worse soon. Just wait till the UAW starts negotiating in a few months. They'll be damn lucky not to lose benefits, get a pay cut, and only guarantee jobs comensurate with demand. Anybody seen the price on DDRAM lately? New lows. Thank God Micron got their production converted just in time to see that market crash. More layoffs ahead for them.....they have no choice. Retailers will start dropping like flys soon. The pain is too great, the squeeze is too hard. There is no interest rate low enough to fix what is starting to feed into the system in a most meaningful way.
And Al's on the tube telling people to be careful with their finances. Give me a f*cking break. What about the nation's finances Al? Mr. I can't see a bubble till it explodes it's raw sewage all over my face. Sorry Al but not only is the horse out of the barn, but the barn burned down and the smoldering pile of ash was swallowed by a sink hole. Yeah go ahead and close the door.
I have no doubt you will see the 10 year below 3%, probably well below, at this stage of the game. It doesn't matter what Uncle Buck does, all of the world's funny money is swirling around the drain together. Gold will shine and silver will explode once it escapes the bonds of immoral gravity that has tied it down for so long.
We aren't going to "muddle through". We aren't going the way of Japan. And we aren't going to go Argentina just yet. What we are going to get is an old fashioned major depression in the real economy first and who the f*ck knows what will occur in the multiple casinos. Weimar inflation will be the end stage of the death of fiat. All I can say is don't leave too much money in the matrix overnight.
People are looking for 500 on the S&P, or 5000 Dow as THE bottom. Wildly optimistic says I. Equities markets could go to zero ulitmately. After all they're just a piece of paper that is only redeemable for another piece of paper. Assuming they don't go to zero and somebody actually wants to buy stocks, the Dow will bottom below 1000. The Nasdaq will disappear even in a mildly optimistic scenario, so the S&P will end up under a 100. When? Does it really matter? If you haven't converted to something more substantial than paper long before that, you still lose. Even gold stocks that are only redeemable in dollars won't win in the long run. We are going to see things happen that none of us believe is possible.
The only thing that is safe is metal in your hands. (And for God's sake don't put it in a safety deposit box) Everything else is someone's liability and is only redeemable for another piece of paper that nobody may want. As Don Stott would say, protect yourself. Nobody else is going to. Time is running out. Laugh if you must, cry if you want, but think man, think.
Posted 19 May 2003 - 09:17 PM
Who's Don Stott?
Posted 19 May 2003 - 11:22 PM
You are probably correct. As I stated in one of Hyper's threads, I'm convinced. I've been reading and thinking about history--Roman Empire, Greek Civilization, British Empire...etc. We are seeing the endgame in this round of fiat currency. The next ones will probably be digital, backed by gold, and the whole process will start over. This is, of course, after WWIII wipes out 1/2 the world's poopulation. I told a friend today that we are going to see massive problems in the economy from here, and it will culminate with WWIII at the trough of the K-Wave Winter. I explained the way Al and his minions are hiding inflation by suppressing gold prices. He laughed and said: "for you the glass isn't even half full." Maybe not, but the safe is half full of gold and silver coins and I have a pond in my back yard with goldfish in it.
Posted 19 May 2003 - 11:42 PM
Grinner, And a pond full of goldfish? That's pretty koi.
Yobob, At the present time, my mother is heeding my advice about what to do with some of her cash in the bank, as it's not generating much interest. She might go for gold, but I doubt it. Where would a sweet little old lady living in a condo hide gold? (They say a firm mattress is a good thing, but, there's a limit!) It's really problematic for many people from a practical point of view.
I'm just thinking --put it into something that retains some value. Raw inexpensive land, near my place, on water and sewer. Secluded, safe, and should remain so. It's the best I can do advice wise. Other than gold and silver, what else is there? I'm not panicking, just preparing, getting all of our ducks in a row, and want to be able to provide shelter for those who need it in my circle of family and friends.
But am in total agreement that gold looks like the very best place to go to shelter assets.
Posted 20 May 2003 - 12:29 AM
So often, I feel that I am the only one seeing this coming.
Your writing skills are amazing for someone that is not a professional writer, and still amazing even if you were.
No anger, no BS.. just pure Yobob!
Posted 20 May 2003 - 01:06 AM
There is no doubt some land worth considering owning. I for one think a lot of it will be cheaper later on. Can't tell you when. As an "investment" it stinks. It's not liquid and it sure as hell isn't portable - or at the very least most people don't want land that is moving.
As to the gold storage problem. It's simple to hide in inoccuous places. If no one knows you have it they won't bother looking for it. Buy local, direct, annonomously in easily portable quantities 1 oz eagles, maples or krugs only. The excuses are few for at least not having a little physical.
Posted 20 May 2003 - 03:01 AM
Excellent commentary, as usual, yobob1.
Goldfish, gold teeth, inflation, deflation, whatever... qo took the same bet as yb1 back in early '01 and will hold said metals until some government, any government, can show me a currency that stores value.
Who are these children
Who scheme and run wild
Who speak with their wings
And the way that they smile
What are the secrets
They trace in the sky
And why do you tremble
Each time they ride by
Throw out your gold teeth
And see how they roll
The answer they reveal
Life is unreal
Who are these strangers
Who pass through the door
Who cover your action
And go you one more
If you're feeling lucky
You best not refuse
It's your game the rules
Are your own win or lose
- Steely Dan, from Katy Lied
Posted 20 May 2003 - 06:17 AM
Oh, I believe it. I just don't believe his timing. It's going to take a couple of decades - not a couple of years. The powers that be have trmendous resourcces to fight it. They will fail at the end, of course - but they can prolong the fight for quite a while...
Not only isn't the glass half full - the glass is broken, the spilled water has evaporated, and the glass shards have started to melt.
Posted 20 May 2003 - 07:36 AM
worldcon has aGREED to pay $500 million in fines for $11 plus billion in fraud... not a bad arrangement for MCI.
japan's fifth largest bank is nationalized as the land of the setting sun rediscovers the inept excuse, "just buy more securities" !
any wonder why gold will continue to grind on for a few more years?
gold does not buy this global reliquification, no, gold is honest money and those risk control programs will be put back to use soon as we retest the old high where a whole new mountain of paper promises reside, that will be the final stand.
and it will be destroyed. the miners have been buying back forward sales and eating it up. you can tell from the action in the miners, it's not a fever pitch, not a speculative rally, not hyperenthusiasm... nope, sound money.
japan is the globes proxy, deflation... and now we see their central bank inflating away at a record clip 12 years later to no avail.
the natural course for debt will take its chartered course... it must be destroyed.
the irony here is the japanese remain the worlds greatest savers.
we on the other hand believe debt is the engine of growth... federal, corporate, and private.
how long can an engine run at redline before it comes apart?
let's look at the gas going into the tank...
bloomberg’s year-to-date tally of total u.s. domestic debt sales are up 24% from last year at $745 billion, about $4 billion of asset-backed securities were issued.
ytd issuance of $144 billion is running up 18% year-over-year.
broad money supply increased $55.4 billion last week, bringing 12-month growth to 7.2%.
savings deposits jumped another $34.4 billion, increasing the 12-month growth rate to 19.3%. retail money market funds gained $6.4 billion and institutional deposits increased $8.4 billion.
total bank assets jumped $894.5 billion last week and were up $127.9 billion over two weeks increasing year-on-year growth by 11.7%. securities holdings increased $35.7 billion after the previous weeks plus $53.1 billion expansion.
holdings by banks of mortgage-backed securities jumped $68.4 billion in two weeks. during the past year securities holdings are up $309 billion, or 20.5%. real estate loans are up $317 billion, or 18%. commercial and industrial loans were down $59 billion, or 6%.
this massive liquidity injection and when coupled with destabilizing housing inflation leads to over-consumption and investing throughout the economy.
this is pure leverage within the credit structure. add in the current account deficit, leveraged derivative credit for fannie and freddie via derivatives you have speculative bubbles of gigantic proportions. the fed is determined to print its way out of depression.
and that isn’t going to happen.
depression is just in a state of suspension. growth rates are tepid no matter how strong the stimulus. we can only see a last interest rate cut of 1/2% and after that we are in the japan category. of course, the new excuse for this torrent of money and credit is deflation.
the ecb knows these imbalances created by Fed, will not go on indefinitely. so they decided it's best to assuage their populace with a "conservative" approach to central pranking.
and there is the "table tilt" we suggested over 2 years ago.
the table will tilt and it will not be pretty. it should make 1987 look like a picnic.
the fed has lowered short-term rates by buying short-term securities, all the while buying up the long end to flatten and invert the curve.
the 10-year note at 3.48.
clearly the fed is on a rampage to drop mortgage rates into the low 5's for the 30 year fixed.
pumping the housing bubble up even further is not going to solve the problem.
expanding aggregates at an insane pace will not reverse deflation, it won't put a dent in it, not for very long.
we're in deep shit... deep, deep shit.
if you don't understand how deep, it does not matter.
consider one thing and only one: your money is headed towards worthless.
that is all you need to know.
forget the prior axioms of your money's worth more in a depression... it does not apply.
this is not your grandma's depression... we are in uncharted waters as the matrix of imbalances is so secular and systemic, it is going to change our lives for decades to come.
just remember one thing... your money is worthless. utterly worthless.
Posted 20 May 2003 - 05:42 PM
Well, I think more along the lines of Bontchev. Money isn't worthless, but it is becoming worth less as time goes by.
There is a tendency among posters on this site to forecast a cataclysmic moment, coming soon, after which things will never be the same. What history teaches is that more often the state of affairs undergoes a prolonged erosion, lasting years or decades or even centuries (e.g. Rome, post-Renaissance Western Europe). Barring nuclear holocaust, a new "Black Plague," or an asteroid slamming into the planet, I think we're looking at many years of slow but accelerating degradation of our standard of living. Crossing the point of no return does not mean that it's over. As Yogi Berra quipped, "it ain't over 'til it's over." It ain't likely to be over for some time -- perhaps not 'til long after all us posters' lives are over. I'm more concerned about the fate of my offspring.
Always appreciate the accelerated thoughts of Yobob as a counterpoint to my own plodding view.
P.S. I do hold a sizeable bag of doubloons -- just in case.
Posted 20 May 2003 - 06:24 PM
I'm mighty glad to see there are still some real bears left.
One of the reasons (of MANY) why I closed down beartopia.net was because I think that anybody who will take the coming bear seriously has already positioned himself (or herself) to safety; the rest of the herd will ride it down to the bitter end.
Posted 20 May 2003 - 06:43 PM
good to see you again susan. i was cleaning up my pm's over at pru and found yours... the one from blanchard.
the ironies never cease.
best to you.
Posted 20 May 2003 - 06:55 PM
losing 98%+ of it's historic purchasing power... makes it worthless to those who understand what money is and represents.
yes, vess is correct it becomes worth less over time.
depends on your context, worthless... worth less.
as for the gloom and doom, history repeats and it cares less what you or i think.
it is the human condition.
ignore or embrace it at your peril.
there are many points in history that financially, were in fact, cataclysmic.
aggregate rampant money & credit inflation runs unabated. we are facing the worst financial crisis since 1348 and the collapse of venetian banking. that year they also had the plague. is sars the new plague?
have a looksee at m3 & mzm... you tell me how on earth this parabola isn't going to fall over on itself.
i got an extended fib for m3 two years ago @ 36.1 trillion... i now know why, it's a decade or less off, but it's coming.
this is not 1934 devaluation of the dollar.
rapid increases in aggregates will not reverse the deflationary trend nor will zero interest rates.
no matter what the fed does... the game is over.
the dollar will end up in the 40s, and that will be rebalanced against a new basket of trading partners.
jmo, but things are far darker than most are willing to face. it's unamerican, but as we both seem to agree... history doesn't give a whit.
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