Financial topics

Investments, gold, currencies, surviving after a financial meltdown
Higgenbotham
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Joined: Wed Sep 24, 2008 11:28 pm

Re: Financial topics

Post by Higgenbotham »

John wrote:And Higgie, I'm sure you've noticed -- the S&P is back below the magic
number of 1080.
John
You made a similar observation back in early February and had also asked whether you should start calling me "Right Way Higgie". This was my response at that time.
Higgenbotham wrote:I don't think you should yet. I stopped using the "Wrong Way Higgy" designation a couple weeks ago when my loss dropped well under 10%. Now it's a bit over 6%, so that surely doesn't qualify me as being right in any sense. I remember estimating the percentage probability the S&P would get above 1050 or so to be single digits. With the position I have on currently, it'll swing to profit below 956 and maybe we can do it then.
My short position size is the same as it was back then, the loss is down to 4% of net worth, and presently it'll swing to profit below 989 on the S&P.

I never thought trying to stop losing money could be so much work.
While the periphery breaks down rather slowly at first, the capital cities of the hegemon should collapse suddenly and violently.

jwfid
Posts: 56
Joined: Thu Nov 13, 2008 11:10 pm

Re: Financial topics

Post by jwfid »

Hi everyone,

Thanks Freddy, I forgot what Hari Seldon's new science was called, Psychohistory. If you liked the first novel, you'll love the rest of them. I'll read them all over again someday (I hope).

Oakwood, I think John really has something. If you haven't read The Fourth Turning by William Strouse and Neil Howe, it may help you understand where John is coming from. John has tried to apply their work in practical use with much success. However, you are right, there are a few misses on timing and size. When working with something new, sometimes it takes awhile to get the hang of things and constructive criticism should be welcomed.

I first came to John's site after the Lehman bankruptcy looking for answers. I found some ideas and dug deeper. I wanted to know what caused the mess we are in, how to prepare, and ultimately what does the future have in store for us. John had most of the answers. Generational Theory actually made sense.

By the way, after watching the events unfold in the last two weeks, I think we are really close to the edge now.

Good luck everyone. Hang on tight.

Joe

OLD1953
Posts: 946
Joined: Tue Aug 11, 2009 11:16 pm

Re: Financial topics

Post by OLD1953 »

Oakwood - picking and choosing times to examine investment possibilities with hindsight always shows up winners. Buy and Hold has a ridiculous self contradiction - that the best time to get out of the market will never come until you retire conjoined with the assumption that you can never tell when the right time to get out of the market will be. If this is so, then why is retirement a good time to get out? (Which is all silly, if you add up the old M3, then swap to bonds whenever the M3 is dropping, then move to stocks when the M3 is rising, well, chart it out for yourself. Make it simple, just pick any moderate cap fund for either looking for growth. Over any period of reasonable length you wish.)

And that's what you are looking at with gold, especially as people tend to lose their heads over it. People will buy gold in uncertain times, when the price is up, and they won't sell till times are good, and the price is down.

As for that tantalum, what would I use for anodes if I sold that? Tantalum has some very excellent properties for both electrochemical and certain vacuum experiments as well. I'm not going to be an expat forever.

The Fed doesn't have the borrowing capability to inflate to the extent needed to throw us into actual inflation. This will be more and more apparent over the next few years. And "printing" money won't help, as 99%+ of actual money in existence is booking entries. This is in terms of real inflation and deflation, not in terms of "market basket" anything. That market basket tracks consumer prices for some items, but that's got little to do with inflation or deflation of the money supply. And there is a lot of bad debt out there waiting to be written off still. That's deflationary pressure, by definition.

Moreover, IMHO, outside political pressures will prevent much further borrowing to the extent it's been done (overdone) for the last couple of years. Between the underwriters and the Tea Party, you'll see increased taxes and decreased actual spending. And that will contribute to deflation.

The Grey Badger
Posts: 176
Joined: Sat Sep 20, 2008 11:50 pm

Re: Financial topics

Post by The Grey Badger »

I'm not totally out of the market yet, but when I need a large job done like having the plumbing contractors in, I go through the portfolio and sell off the ones that look like they're riding high and are actually dinosaurs in the making. (Yes, XOM, I'm talking about you.)

I keep them because they are still paying dividends. When I vote my shares I try to steer them in a 4T direction: real production of real items instead of bubble stuff; eyes on the future instead of sinking complacently into the way they've always done things; and keeping a leash on the overpaid management. A mere drop in the bucket, of course, but then, so is one's vote in any community larger than a town meeting.

And I track their performance against the DOW.

I had a lot of this portfolio from the estate of my GI uncle, who invested even during the late unpleasantness of 80 years ago. I have an idea of the criteria he used. So I'm holding onto the two I bought when the recession hit: Family Dollar, and UPS. The former for obvious reasons.

But, oh, I wish I'd bought an ounce of gold in 2001!

John
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Joined: Sat Sep 20, 2008 12:10 pm
Location: Cambridge, MA USA
Contact:

Barney Frank in 2005

Post by John »

-- Barney Frank in 2005

I love this:


http://www.youtube.com/watch?v=iW5qKYfqALE

John

aedens
Posts: 4753
Joined: Tue Nov 04, 2008 4:13 pm

Re: Financial topics

Post by aedens »

http://english.cntv.cn/program/bizasia/ ... 3643.shtml

According to CCTV, sales of gold for the May Day holiday in Beijing are up 70% over last year, and that sales of gold bars has doubled. It notes that May is a popular season for weddings, which makes it a peak gold-buying period, but attributes this year’s increase to jitters over property prices

Read more: http://www.businessinsider.com/chinese- ... z0oZPWAfG8


http://www.zerohedge.com/article/10-gol ... lients-see

10 Gold Charts Commercial Investment Firms Don't Want Their Clients to See

aedens
Posts: 4753
Joined: Tue Nov 04, 2008 4:13 pm

Re: Financial topics

Post by aedens »

http://mises.org/books/mises_money.pdf

What is necessary is to prevent government from destroying
the monetary system by inflating. therefore the quantity of money
shouldn’t be manipulated by the government, according to the wishes of
those people who want to enjoy a few minutes, a few hours, a few days, or
a few weeks of good life from increased government spending, for a very
long disastrous state of affairs.

We must say that what creates the inflation is the famous “remedy”
for the government’s problems, the “remedy” which people believed was
discovered some few years ago, but which was really discovered by the
Roman emperors—deficit spending. Deficit spending made it possible
for the government to spend more money than it had and that it collected
from the people. As everybody knows, deficit spending, that is spending
more than one’s income, is very bad for the individual. The great error is
that people believe that what is bad for the individual is not necessarily
also bad for all the individuals together. This is the great mistake. And if
this mistake is not eliminated very soon, all our technological and scientific
improvements will not prevent us from a tremendous financial catastrophe
that will destroy practically all that civilization has created in the last several
hundred years. Mises
============================================================================================
http://generationaldynamics.com/forum/v ... 0%A6#p4225
It is a Political Economy only. Technicals and fundamental plays I feel are basically finished unless you have current Senate graft buy report.

The TBTFs couldn't care less that a huge, unregulated CDS market will destabilize the economy and lead to crises in the future.
Why should they? As Nobel prize-winning economist George Akerlof predicted in 1993, the financial giants would use CDS until the system crashed,
knowing that the taxpayers would bail them out when the crash happened.

They know the same thing will happen tomorrow . . .

A bill that would require speedier disclosure of stock trades by lawmakers has languished for years on Capitol Hill, suggesting Congress has little appetite for new rules on how its members manage their money. The legislation, by Democratic Reps. Brian Baird of Washington and Louise Slaughter of New York, would prohibit lawmakers from trading in financial markets based on nonpublic information they learn on the job. It would also require them to make their financial transactions public within 90 days of a purchase or sale. Currently, those disclosures are filed once a year, and insider-trading laws generally do not apply

When the government wants to pay out more money than before, if it
wants to buy more commodities for some purpose or to raise the salaries
of government employees, no other way is open to it under normal conditions
than to collect more taxes and use this increased income to pay,
for instance, for the higher wages of its employees. The fact that people
have to pay higher taxes so that the government may pay higher wages to
its employees means that individual taxpayers are forced to restrict their
expenditures.
This restriction of purchases on the part of the taxpayers
counteracts the expansion of purchases
by those receiving the money collected
by the government. Thus, this simple contraction of spending on
the part of some, the taxpayers from whom money is taken to give to others,
does not bring about a general change in prices.

"The point I am trying to make is what Mises and Rothbard warned of in context to amplification of
effect as in a waves to settlement of contracts since credit is not the issue when debt marked is the
obstacle overwelming the flow of credit to clear malinvestment which Government cannot solve given
there attributes to nuetralize effective consumer market preferences."
This observance has been forwarded also as we understand in the early to mid eighty's that the Senate was reduced to
servatude by the Globalism
http://www.americaneconomicalert.org/vi ... od_ID=1086
which the link above supplied to to actual conveyances to previous monetary policy's of trade
and lines of credit to global stabilization lost in the context of Austrians view and the Liberal Keynesians education
systems over the decades which we monitor also as Generational Dyanamic's today.

At least Hadrian had the brains to manage a Empire.

Result:
http://generationaldynamics.com/forum/v ... tein#p4264

Back in forums for clarification: Interferes in actual production in a most dangerous manner since it is impossible to mark and
measure moral hazard malinvestments from a premise of credit collapse with out marked to market seeking stabilization.
Basil Moore 1983, “Unpacking the post Keynesian black box: bank lending and the money supply”,
Journal of Post Keynesian Economics 1983, Vol. 4 pp. 537-556; here Moore was quoting a Federal Reserve
economist from a 1969 conference in which the endogeneity of the money supply was being debated.

We know what will happen as it did before “Unpacking the post Keynesian black box: bank lending and the money supply”,

=================================================================
We know how already, and as we see the truth unfold in context of today's
so called issues we are reminded it is three steps. First it is attacked by whatever
means that system in general needs to protect its interests. Second, it is ignored
as groups linger in doubt and lasty it is acepted as truth evident to those who learn
what has been done to control at your expense.

http://finance.yahoo.com/news/EU-nation ... et=&ccode=

"Van Rompuy gave no details of new sanctions because officials from the EU's 27 governments, the European Central Bank
and the European Commission are only starting work on changes to widely flouted EU budget rules.
EU leaders are due to decide on long-term reforms at an October summit." endogeneity of the money supply

There is no unpopular government in the long run as we are reminded. We are still
between step one and two since they act as they are given the bent of mind they choose.

Irony: Frustrated local and state officials were also waiting for the Army Corps of Engineers to issue permits so they can build sand berms in front of islands and wetlands to act as buffers between the advancing oil and the wetlands. I watched Black Blizzard on PBS on the struggle to survive in that region then as they do now in that current reality from practises. All politic's are local people so act as such. With those with a eye to see you can check to see what seal has been broken.
Last edited by aedens on Sun May 23, 2010 12:27 am, edited 4 times in total.

John
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Location: Cambridge, MA USA
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Max Keiser video

Post by John »

Michael "Mish" Shedlock's column today refers us to the following
video of Max Keiser's report on Russian Television. It's 25 minutes
long, Shedlock suggests listening to the first few minutes of it
because it's so hilarious.

I did not find it hilarious. Like so many things I run into these
days, I find it to be extremely depressing. It describes in some
detail the shell game that's being played among the central banks in
the US and European countries.

A number of years ago, when credit cards were first becoming more
widely available, I saw the poster that read, "Can I pay my Master
Card with my Visa?" That was very funny at the time. Ha, ha, ha.
But now we have central banks doing exactly the same thing.

I just can't understand this. Why is this funny? Why don't ordinary
investors, journalists and politicians see what a disaster this is?



http://globaleconomicanalysis.blogspot. ... urity.html
http://www.youtube.com/v/dOhXUSBR3hs

John

vincecate
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Location: Anguilla
Contact:

Re: Max Keiser video

Post by vincecate »

John wrote: I just can't understand this. Why is this funny? Why don't ordinary investors, journalists and politicians see what a disaster this is?
I find it very funny. Yes it is a disaster. The idea of printing more Euros to support the value of the Euro is just so stupid it is funny. And this is supposed to be "shock and awe in the near term", and Max says, "ya, for about 5 minutes". Sure enough the next day the market realized that printing Euros will not increase the value of Euro and sent the value down. It is Keystone Cops or 3 Stooges type funny. And, "In the end the gold vigilantes win" just brings a smile to my face.

John, maybe it is more funny for those of us invested in precious metals. We expect governments to foolishly print money which will result in currency devaluation and inflation. If you are planning for deflation this might not be so funny. But then Mish is expecting devaluation and deflation and he finds it funny. I don't even see how devaluation and deflation is possible. If you devalue the dollar, then oil and everything else will go up in price, which is the result of inflation. How can Mish expect devaluation and deflation?

My stuff on inflation/deflation:
http://pair.offshore.ai/38yearcycle/#deflation

-- Vince
Last edited by vincecate on Sun May 23, 2010 6:36 am, edited 1 time in total.

reviresco
Posts: 16
Joined: Wed Mar 04, 2009 12:49 pm

Re: Financial topics

Post by reviresco »

“…there is a lot of bad debt out there waiting to be written off still. That's deflationary pressure, by definition.” Old1953

John has espoused and explained the Deflation scenario many times (thank you for your patient repetition John), yet I still can’t get it to tally with what I’m observing.

What amount of debt must we write off to offset the trillions we’re going to owe for Medicare, Medicaid, Social Security, not to mention HealthCare, back door bailouts of banks and countries and just the interest on what we have to borrow? Yes, deflation seems likely for a time as we have to fill the holes in the money supply left by bad debt, yet at some point the debts we can write off will be written off, and at that point the economy and money supply will still be woefully inadequate to pay the entitlement bills and the US will have to continue to print. Not to fill debt holes, but just to pay the bills. It still seems like inflation in the end.

And since entitlements are really the crux of the problem, perhaps we should shift the focus from the obvious mathematical and moral impossibilities of the entitlements to a more realistic and sombre scenario. If you’ll excuse me for bringing up unpleasantries, perhaps we should discuss some words coming down the pike that will help us repair and prepare the United States for our kids and grandkids.

The words are “Post-Entitlement”, as in:

“Post-Entitlement America.”

Do those words bring just a tinge of fear, but also relief? Fear due to the “what if I do end up needing some financial help when I’m old” plus relief because we can get our kids off the hook.

I recall the terrible 1993 Amtrak train wreck in Alabama, where a tugboat hit a bridge support moments before the Amtrak train got to the bridge, the bridge gave way, and many rail cars and people plunged into the river in at night. Of the people saved, one was an 11 year old girl with cerebral palsy named Andrea who was traveling home with her parents. As they were looking for a way to get out of the rail car in the river, it shifted and filled with water. The parents could be seen in the car, under the water, holding their little girl through the window for the rescuers to save, but were not able to get out of the sinking car themselves. A dramatic comparison, but would you not behave the same way for your children in a possible financial wreck?

Our entitlement programs not only cannot survive, they must not survive in their present form or the succeeding generations of Americans will not be able to handle the burden of either the debt or a tremendously devalued currency. The entitlements must be seen for what they are, not a “societal safety net” but a societal dragnet, pulling all Americans into unserviceable national debt.

I think it of note that President Obama has said that everything is on the table regarding the nation’s budget. Don’t forget that the bulk of the population whose votes were swayed for decades by the promises of Social Security and Medicare have left or are leaving this Earth. Time for new carrots for the new electorate.

By the way, I highly value John’s work and predictions predicated on GD theory. Wrong or right, the process and applications of the theory to predict are terrific. How many of us have had most of our predictions and suppositions be correct? I’d wager not many.

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