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Stock market, cash or what to do?


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breakfast

I agree with you on currency collapse. This is a major reason why the USD is so strong right now, as the world's currency reserve and hirtherto de facto gold. Assets are repatriated into the medium of exchange, the USD.

 

We can cry over spilt milk, and how things may have been different under better leadership in the last decade.

 

But, instead, we should look to the future, firstly reviewing what happened in the past with the pound stirling before it gave the role of world reserve currency to the US, after Keynes failed at Bretton Woods with the commodity backed bancor. History will guide us. All paper fiat previously was backed by precious commodity, until the Nixon Shock.

 

This time is a bit different (correct me if wrong). This time it is not a handing over of the role to a historically strategic ally.

 

So, what should we observe as signals of currency collapse?

 

I see weakness in the power of the currency as an indicator. Weakness is more obvious in inflation of supply, precisely what is happening. Weakness is exemplified by abuse of the currency leading to mistrust and ultimately a paper currency that is not accepted as a medium of exchange for material goods, led by commodities.

 

The bond market is where to look for ill portent. There are likely better indicators, but, I invite others here to throw light into this darkness.

 

China shares more in common with the US than a superficial glance at capitalism, at which they are excelling.

 

China is an amalgamation of numerous minority states, each steeped in history. The United States is also a group of states. The question is how unity is upheld. Perhaps, there is more in common with China in this regard than meets the eye.

 

Han China is unusual in that it is a major diaspora, in contrast to the US, which is not.

 

Additionally, culturally, Han network in a culturally integrative way that is weaker for Westerners. They stick together. The individual is less important than their role in the network. This seems hard to combat in Western ways, at least on the surface. I haven't given it thought.

 

 

As for dooms day, serious and systemic bank failures may be right around the corner. In fact, it is hard to accept that a market, the derivatives market, holding 10 times the GDP of the world, a market that was negligible 20 years ago (birth of the bull market in stocks), is anything but unstable and vulnerable to catastrophic failure. Therein lies its strength too. But a failure will likely be unstoppable.

 

On the bright side, a failure in derivatives likely makes anything of true commodity value, intensely so. So this is where to invest, in material value. Starting with basic things like food and energy. Precious metals are a form of money where paper fails. But you can't eat or power your puter with gold or silver

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Alan S

A pal of mine is a derivatives trader with one of the major organisations.

Over the weekend he told me that derivatives trading has boomed over the past two weeks, way up on what it was a month or more ago.

 

Quite what they means is open to speculation.

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Looks like another good chance for the clever traders getting out of their stocks after the media yesterday tried to make us all believe that the rally is on again after a one day break.

 

Gotta love those manipulators, they used some key words which they always use to tell the "members" to get out now.

 

Bad sign for the stock market and I expect a bigger dip from here.

 

.

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breakfast
Not sure what you mean by the decisions I made that I want to justify.

 

We have been printing Billions and Trillions of paper money for decades. That was all hunky dory until some people became a little too imaginative with selling shady investments.

 

History can show what happens in certain circumstances, but we can't assume that those outcomes are inevitable or will be repeated.

 

We have a whole new world now.

 

OK, some graphs to put it in pictures

post-4103-1240481840_thumb.gif

monetary_base.bmp

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breakfast

Here's the monetary base (above bmp, don't bother clicking on it in the last post, for this is the graph here)

post-4103-1240483524_thumb.jpg

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breakfast
Here's a million clams

 

Here's 100 M apparently, though I'd say it looks more like 1000M

post-4103-1240483679_thumb.jpg

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breakfast

What billionaires have, a billion greenbacks

post-4103-1240483826_thumb.jpg

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breakfast

US public debt as of now

 

that's over 11 trillion

post-4103-1240484175_thumb.jpg

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breakfast
US public debt as of now

 

that's over 11 trillion

 

Federal debt, the graph is a bit old

post-4103-1240484648_thumb.jpg

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breakfast

the derivatives market, is over 500 trillion dollars

 

somewhat akin to 10 times the gdp of the world

 

a financial bubble of epic proportions

 

it virtually did not exist 20 or so years ago

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breakfast
the derivatives market, is over 500 trillion dollars

 

somewhat akin to 10 times the gdp of the world

 

a financial bubble of epic proportions

 

it virtually did not exist 20 or so years ago

 

Currently, one of the better thorough synopses of the history of currency I have read

 

http://www.24hgold.com/english/news-gold-s...tor=Mike+Hewitt

 

This should lead to the question of what happens next.

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GoneAsiatic

Agree that the currency markets are a mess worldwide. With the U.S. and U.K printing money, AKA the euphemism of Quantitative Easing, The Bank of Canada lowering its interest rates and hinting that it may engage in QE, the Euro falling against the Dollar during the period of 4/21/08-04/20/09 from 1.55 to 1.30, and with the likelihood of the ECB engaging in QE, I would not want to invest in anybody's currency.

 

While I do think the dollar will eventually slide, I have done as others recommended and have been buying commodities. Specifically, I have traded some junk I owned for a Canadian index fund, a Canadian gold mining firm, oil and natural gas, and agriculture funds. They are all cheap now and I prefer to buy them in ETF form to reinvest dividends and dollar cost average when their prices drop. I won

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