Ramblings and Useless Predictions About the Future

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Re: Ramblings and Useless Predictions About the Future

Postby admin » Fri Feb 19, 2021 7:22 pm

If the Fed is not seen as a #corrupt use of public entrusted power...

If the Fed cannot be compared to a simple PayDay Lending scheme, with the entire US taxpayer base is the monthly suckers...er, customers...

If Trillions upon Trillions of dollars has not been stolen out of this scheme, and laundered through exotic properties, stock markets and Bitcoin between 1914 to early 2021...most of it since 1971. #AboutYourFinancialMurder #AYFM

If this is not the single #1 greatest-ever trick to Farm Humans, farm humanity, enslave all living things on a planet...#FarmingHumans (is not fiction)

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If Markets and Bitcoin in Feb 2021 are not the indicators of the thrill ride just prior to the de-railment of the ride...

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If a few such revelations do not show themselves sometime in 2021, then.....well, then this will have been another fun thought experiment that resembles "Ramblings and Useless Predictions About the Future”.

#Farming Humans is the story of "the NEW 21st Century Slavery”.

#FarmingHumans is the story of "#Corruption, the use of public entrusted power for private gain”.

#Farming Humans is the book, by nobody you even know, that, beginning in 2018, began skating to where the puck was going to appear...in 2021. Even the great #Gretzky would say that was pretty decent planning.

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Re: Ramblings and Useless Predictions About the Future

Postby admin » Sat Jan 09, 2021 9:38 pm


I could be imagining it, but my wild guess would be that #markets and #Bitcoin are the quickest ways to wash, or “launder” trillions looted from society. The #perfect #Crime #Distraction is #Fear and #Organized #Corruption Posted twitter Jan 9th 2021 at 9:25 pm

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2020 was a year of panic, distraction and political theatre (Trump)

Too much of that looked a lot like it helped to divert attention away from something rather large.

What was it the world was being distracted from? In my view (of a rather worthless nature:) it was the looting of America in it’s final pre-bankruptcy (moral, social, financial, political) convulsions.

I could well be wrong, but the cool thing is that...I could one day be right.

As my first brokerage job sales manager once said about me,
Even a blind chicken gets a few kernels of corn.
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Re: Ramblings and Useless Predictions About the Future

Postby admin » Thu Mar 02, 2017 9:32 pm

Doublin-down...on being wrong...

Dow in the 7000’s, 2019.

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click to enlarge image

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March 2, 2017 image
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Re: Ramblings and Useless Predictions About the Future

Postby admin » Sun Apr 26, 2015 8:38 am

Just watched an episode of John Oliver on America's INFRASTRUCTURE.
The story emphasized the crumbling or "maintenance needed" state of affairs, but without any money to do much about it.

Here is what comes to my mind.

Have the US Government restore or reclaim the sovereign ability of the government to issue it's own currency, as it wishes, rather than gifting this lucrative franchise away to private banking interests outside of the government (know as the Federal Reserve).

This would allow:

a) The government to issue it's own script, (money) at a zero cost to the government compared to the cost of borrowing from these bankers.

b) Allows the government to immediately put the country back to work, towards full employment prosperity, AND with the end result being a new and improved, remodelled America, instead of the old, fixer-upper, money-pit America.

A side benefit might be to curtail the Federal Reserve monopoly of money creation, which has been done with as much transparency as a dog fighting ring in the Nevada desert, and is probably worth trillions to the beneficiaries. ( I hope this concept does not result in the rapid assassination action that has always resulted when any sitting president considered messing with this money creation franchise….:)

There it is. Short, sweet, simple and easy enough to understand that the actor-president (Frank Underwood) on the House of Cards Netflix show was halfway to this solution in this series.

When George Washington was put in charge of the military defence of the colonies way back when, one of the first things they did was to issue new script (currency notes) which were backed by nothing but the promise of the newly formed congress of the colonies…..and it was this that allowed them to pay for war supplies to fight the British. Money is whatever it is that will be readily accepted by the general population, and there is no reason I can foresee to prevent the USA from creation of their own to use to spend their way out of two problems; 1) infrastructure, and 2) the second great depression (again caused by bankers…

I truly don't know much, but I know this……the powers that run the political and financial systems in America are no different today than looters in an LA riot…

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Re: Ramblings and Useless Predictions About the Future

Postby admin » Thu Oct 02, 2014 5:03 pm

http://moneymorning.com/ext/articles/ri ... ris=252777

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Buffett's $55 Billion Gamble is a Bet on
U.S. Collapse, Warns CIA Economist

Did Warren Buffett just make a $55 billion bet on an imminent market crash?

A single financial document has emerged that may hold the answer.

According to a new SEC filing, Buffett is sitting on $55 billion in cash through his company Berkshire Hathaway. This is highly unusual behavior from a man often called "the world's greatest investor."

It's the biggest cash hoard the company has ever amassed, in the 40 years he's been in charge.

At a cost of $29 million every single day he keeps his money out of the markets, from all outward appearances, this is a risky and costly gamble. Unless Buffett is sure a Wall Street crash is at our doorstep.

Shocking: See the chart that may have caused Buffett to bet on a U.S. collapse.
But he's not the only famous investor who fears a dangerous correction is coming.

Jim Rogers recently admitted to Yahoo! that he is staying far away from U.S. stocks.

New filings also revealed billionaire George Soros' massive short position on the S&P 500.

Previously, Soros allocated 3% of his portfolio to shorting the S&P. It's a common practice major investors use to insure their positions against unforeseen pullbacks.

But he just increased his short position on the S&P 500 over 5X fold, taking it to 16% of his entire portfolio.

That is an alarming sign that Soros is betting on a market collapse. And given his track record of predicting these events, it's one we should not ignore.

So the question remains: Why are some of the "greatest investors alive" betting against Wall Street?

According to Jim Rickards, the CIA's Financial Threat and Asymmetric Warfare Advisor, they are taking emergency measures now before a historic economic meltdown strikes - one he, and many of his colleagues at the U.S. Intelligence Community, fear is unavoidable.

In an exclusive interview with Money Morning, Rickards warned, "The signals we've been tracking are quite clear, a 70% stock market crash is imminent."

"Think of the market down 70%. If Buffett has that $55 billion in stocks, he loses $38 billion," he explained.

Rickards, a three-decade veteran of Wall Street's biggest hedge funds and investment banks, knows billionaires like Buffett are well-connected to both the financial markets and U.S. government.

Over 2X More Dangerous
Than the Great Depression
Does this chart prove a 70% stock market crash is imminent?
Click here to continue...
So it's logical they'd have the luxury of receiving an advanced warning of a coming catastrophe similar to what his work with the CIA is forecasting.

"Every business in the world whose back is to the wall, they're distressed, they go to Warren Buffett" asking for a bailout, Rickards explained. "Think of the information he has. He sees everything."

"I think Buffett is seeing the same things my colleagues and I are."

Rickards stepped forward to take part in this exclusive interview so average Americans could receive this early warning as well.

During the discussion, Rickards shared a series of dangerous economic patterns that have recently appeared that he and those in the highest ranks of the intelligence community have been tracking.

What they reveal is an economy that has reached what he refers to as a "super critical state."

"Everybody knows we have a dangerous level of debt. That's no secret," he said. "But all signs are now flashing bright red that our chickens are about to come home to roost."

Frightening: Single chart reveals which banks could collapse (and how soon). If your life savings is in a major bank, please look at this now.
Rickards focused on five "flashpoints" the Intelligence Community is closely monitoring that they believe will soon ignite this collapse.

"This nearly instantaneous 70% stock market crash is just Phase 1. From the outside, nobody will see it coming," Rickards explained.

"Once it becomes clear that it's not a flash crash – it's a systemic meltdown in the economy itself, that's when the gravity of the situation will sink in. And there will be no digging out from it.”

He went on to explain how a $100 trillion meltdown would quickly unfold in the aftermath. Then he used five words to describe what this was all leading to.

“A 25-year Great Depression,” Rickards warned.

Editor's Note: Money Morning has released their exclusive interview with Jim Rickards to the public. And it's a must-see for every American who is concerned about our country and their financial security. Click here to view it.
Rickards warnings are a part of a growing wave that have begun to appear from areas of our government who are not historically known for making their findings public.

Recently, a sensitive report containing the consensus view of all 16 branches of the U.S. Intelligence Committee surfaced.

These agencies, which include Rickards' CIA, as well as the FBI, Army, and Navy, have already begun to jointly estimate the impact of, as the report stated, "the fall of the dollar as the global reserve currency."

Details of Government's
"Day After Plan" Emerge
Warning: Measures have already been put "in play" for this 25-year Great Depression.
Click here to continue...
And our reign as the leading superpower being annihilated in a way "equivalent to the end of the British Empire in the post-World War II period."

The nightmarish endgame presented in this report involved "a worldwide economic breakdown and an extended period of global anarchy."

"Look at it this way," Rickards stated near the end of the interview. "Americans are standing at the bottom of a very tall mountain - Mt. Everest, Mt. Kilimanjaro... they look up and see an avalanche barreling down.

"Determining the one snowflake that started this chaos shouldn't be our focus. Recognizing the severity of the situation and moving to safety should be."

Buffett, Soros, and Rogers may be prepared for anything, but few individual investors are.

That's why Rickards is now urging Americans to ask themselves a simple question.

"What if we're right?"

Editor's Note: For a limited time, you can view Rickards' interview and claim a free copy of his New York Times best selling book, The Death of Money. Click here to continue… http://pro.moneymappress.com/MMRBSSH39/PMMRQC04/?iris=252777&h=true

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Re: Ramblings and Useless Predictions About the Future

Postby admin » Fri Aug 01, 2014 5:23 am

Chilling……and credible. Chilling. Make your own conclusions. I put it in here because it is indeed possible. We ARE working entirely without rules, laws or a safety net……..monetarily. While some of those who act in charge should not even be allowed to play with matches……

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Trillions of dollars of debts will be restructured and millions of financially prudent savers will lose large percentages of their real purchasing power at exactly the wrong time in their lives. Again, the world will not end, but the social fabric of the profligate nations will be stretched and in some cases torn. Sadly, looking back through economic history, all too often war is the manifestation of simple economic entropy played to its logical conclusion. We believe that war is an inevitable consequence of the current global economic situation.

Below are some of the key highlights from Kyle Bass' latest, and as usual, must read letter:

On central banks and the final round of global monetary debasement:

Central bankers are feverishly attempting to create their own new world: a utopia in which debts are never restructured, and there are no consequences for fiscal profligacy, i.e. no atonement for prior sins. They have created Potemkin villages on a Jurassic scale. The sum total of the volatility they are attempting to suppress will be less than the eventual volatility encountered when their schemes stop working. Most refer to comments like this as heresy against the orthodoxy of economic thought. We have a hard time understanding how the current situation ends any way other than a massive loss of wealth and purchasing power through default, inflation or both.

In the Keynesian bible (The General Theory of Employment, Interest and Money), there is a very interesting tidbit of Keynes’ conscience in the last chapter titled “Concluding Notes” from page 376:

[I]t would mean the euthanasia of the rentier, and, consequently, the euthanasia of the cumulative oppressive power of the capitalist to exploit the scarcity value of capital. Interest today rewards no genuine sacrifice, any more than does the rent of land. The owner of capital can obtain interest because capital is scarce, just as the owner of land can obtain rent because land is scarce. But whilst there may be intrinsic reasons for the scarcity of land, there are no intrinsic reasons for the scarcity of capital.

. . .
Thus we might aim in practice (there being nothing in this which is unattainable) at an increase in capital until it ceases to be scarce, so that the functionless investor will no longer receive a bonus[.] (emphasis added)
This is nothing more than a chilling prescription for the destruction of wealth through the dilution of capital by monetary authorities.

Central banks have become the great enablers of fiscal profligacy. They have removed the proverbial policemen from the bond market highway. If central banks purchase the entirety of incremental bond issuance used to finance fiscal deficits, the checks and balances of “normal” market interest rates are obscured or even eliminated altogether. This market phenomenon does nothing to encourage the body politic to take their foot off the spending accelerator. It is both our primary fear and unfortunately our prediction that this quixotic path of spending and printing will continue ad?infinitum until real cost?push inflation manifests itself. We won’t get into the MV=PQ argument here as the reality of the situation is the fact that the V is the “solve?for” variable, which is at best a concurrent or lagging indicator. Given the enormity of the existing government debt stock, it will not be possible to control the very inflation that the market is currently hoping for. As each 100 basis points in cost of capital costs the US federal government over $150 billion, the US simply cannot afford for another Paul Volcker to raise rates and contain inflation once it begins.
Hayek was, of course, right:

The current modus operandi by central banks and sovereign governments threatens to take us down Friedrich von Hayek's “Road to Serfdom”. Published in 1944, its message, that all forms of socialism and economic planning lead inescapably to tyranny, might prove to have been prescient. In the 1970s, when Keynesianism was brought to crisis, politicians were vociferously declaring that attempting to maintain employment through inflationary means would inevitably destroy the market economy and replace it with a communist or some other totalitarian system which is the “perilous road” to be avoided “at any price". The genius in the book was the argument that serfdom would not be brought about by evil men like Stalin or Hitler, but by the cumulative effect of the wishes and actions of good men and women, each of whose interventions could be easily justified by immediate needs. We advocate social liberalism, but we also need to get there through fiscal responsibility. Pushing for inflation at this moment in time will wreak havoc on those countries whose cumulative debt stocks represent multiples of central government tax revenue.

The non?linearity of expenses versus revenues is what will bring them down.
"Pavlov's Party" is ending, and when it does, it will happen so fast no reaction will be possible:

Through travel and meetings around the world, it has become clear to us that most investors possess a heavily anchored bias that has been engrained in their belief systems mostly through inductive reasoning. Using one of the Nobel Laureate Daniel Khaneman's theories, participants fall under an availability heuristic whereby they are able to process information using only variables that are products of recent data sets or events. Let’s face it – the brevity of financial memory is shorter than the half?life of a Japanese finance minister.

Humans are optimistic by nature. People’s lives are driven by hopes and dreams which are all second derivatives of their innate optimism. Humans also suffer from optimistic biases driven by the first inalienable right of human nature which is self?preservation. It is this reflex mechanism in our cognitive pathways that makes difficult situations hard to reflect and opine on. These biases are extended to economic choices and events. The fact that developed nation sovereign defaults don’t advance anyone’s self?interest makes the logical outcome so difficult to accept. The inherent negativity associated with sovereign defaults brings us to such difficult (but logical) conclusions that it is widely thought that the powers that be cannot and will not allow it to happen. The primary difficulty with this train of thought is the bias that most investors have for the baseline facts: they tend to believe that the central bankers, politicians, and other governmental agencies are omnipotent due to their success in averting a financial meltdown in 2009.

The overarching belief is that there will always be someone or something there to act as the safety net. The safety nets worked so well recently that investors now trust they will be underneath them adinfinitum. Markets and economists alike now believe that quantitative easing (“QE”) will always “work” by flooding the market with relatively costless capital. When the only tool a central bank possesses is a hammer, everything looks like a nail. In our opinion, QE just doesn’t stimulate private credit demand and consumption in an economy where total credit market debt to GDP already exceeds 300%. The UK is the poster child for the abject failure of QE. The Bank of England has purchased over 27% of gross government debt (vs. 12% in the US). UK bond yields have all but gone negative and are now negative in real terms by at least ?1%. Unlimited QE and the zero lower bound (“ZLB”) are likely to bankrupt pension funds whose expected returns happen to be a good 600 basis points (or more) higher than the 10?year “risk?free” rate. The ZLB has many unintended consequences that are impossible to ignore.

Despite reading through Keynes’ works, we didn’t find a single index referencing the ZLB or any similar concept. In his General Theory, there are 64 entries in the index under “Interest” but no entry for the ZLB, zero rates, or even “really low rates”.

Our belief is that markets will eventually take these matters out of the hands of the central bankers. These events will happen with such rapidity that policy makers won’t be able to react fast enough.
On the lunacy of such "modern" "economic" "theories" as MMT (which may or may not stand for "Magic Money Trees")

The fallacy of the belief that countries that print their own currency are immune to sovereign crisis will be disproven in the coming months and years. Those that treat this belief as axiomatic will most likely be the biggest losers. A handful of investors and asset managers have recently discussed an emerging school of thought, which postulates that countries, as the sole manufacturer of their currency, can never become insolvent, and in this sense, governments are not dependent on credit markets to remain fiscally operational. It is precisely this line of thinking which will ultimately lead the sheep to slaughter.
The inevitable end of that supremely flawed monetarist experiment - the Eurozone:

Each subsequent “save” of the European debt crisis has been devised by the Eurocrats coming up with some new amalgamation of an entity that is more complex than its predecessor that is designed to project size, strength, and confidence to investors that the problem has been solved. Raoul, a friend of mine who resides in Spain, put it best:

“Let’s just clear this up again. The ECB is going to buy bonds of bankrupt banks just so the banks can buy more bonds from bankrupt governments. Meanwhile, just to prop this up the ESM will borrow money from bankrupt governments to buy the very bonds of those bankrupt governments.”

The EFSF, the IMF, the ESM, and the OMT (and who knows what other vehicles they will dream up next) have all been developed to serve as an optical backstop for investors globally. The Eurocrats are sticking with the Merkelavellian playbook of hiding behind the complexity of these various schemes. All one has to do is review the required contributions to said vehicles from bankrupt nations to realize that the circular references are already beginning to show in broad daylight. Does anyone stop to consider that the two largest contributors to the IMF are the two largest debtor nations in the world? Are things beginning to make sense now?


In the end, the EMU won't look the same, if it exists at all.
And finally, a less than rosy outlook for the entire "developed" world.

Trillions of dollars of debts will be restructured and millions of financially prudent savers will lose large percentages of their real purchasing power at exactly the wrong time in their lives. Again, the world will not end, but the social fabric of the profligate nations will be stretched and in some cases torn. Sadly, looking back through economic history, all too often war is the manifestation of simple economic entropy played to its logical conclusion. We believe that war is an inevitable consequence of the current global economic situation.
All this and much more, including the usual detailed summary depicting the Japanese ultra slow-motion trainwreck (which is picking up speed as none other than Seiji Maehara, state minister for economic and fiscal policy, admitted yesterday when he said that "[The Japan economy] is in a dire state") in the full letter below:

http://www.zerohedge.com/news/2012-11-1 ... -inevitabl
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Re: Ramblings and Useless Predictions About the Future

Postby admin » Fri May 24, 2013 10:12 am

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Will It Be Inflation Or Deflation? The Answer May Surprise You

By Michael, on May 22nd, 2013

Is the coming financial collapse going to be inflationary or deflationary? Are we headed for rampant inflation or crippling deflation? This is a subject that is hotly debated by economists all over the country. Some insist that the wild money printing that the Federal Reserve is doing combined with out of control government spending will eventually result in hyperinflation. Others point to all of the deflationary factors in our economy and argue that we will experience tremendous deflation when the bubble economy that we are currently living in bursts. So what is the truth? Well, for the reasons listed below, I believe that we will see both. The next major financial panic will cause a substantial deflationary wave first, and after that we will see unprecedented inflation as the central bankers and our politicians respond to the financial crisis. This will happen so quickly that many will get "financial whiplash" as they try to figure out what to do with their money. We are moving toward a time of extreme financial instability, and different strategies will be called for at different times.

So why will we see deflation first? The following are some of the major deflationary forces that are affecting our economy right now...

The Velocity Of Money Is At A 50 Year Low

The rate at which money circulates in our economy is the lowest that it has been in more than 50 years. It has been steadily falling since the late 1990s, and this is a clear sign that economic activity is slowing down. The shaded areas in the chart represent recessions, and as you can see, the velocity of money always slows down during a recession. But even though the government is telling us that we are not in a recession right now, the velocity of money continues to drop like a rock. This is one of the factors that is putting a tremendous amount of deflationary pressure on our economy...

The Trade Deficit

Even single month, far more money leaves this country than comes into it. In fact, the amount going out exceeds the amount coming in by about half a trillion dollars each year. This is extremely deflationary. Our system is constantly bleeding cash, and this is one of the reasons why the federal government has felt a need to run such huge budget deficits and why the Federal Reserve has felt a need to print so much money. They are trying to pump money back into a system that is constantly bleeding massive amounts of cash. Since 1975, the amount of money leaving the United States has exceeded the amount of money coming into the country by more than 8 trillion dollars. The trade deficit is one of our biggest economic problems, and yet most Americans do not even understand what it is. As you can see below, our trade deficit really started getting bad in the late 1990s...

Wages And Salaries As A Percentage Of GDP

One of the primary drivers of inflation is consumer spending. But consumers cannot spend money if they do not have it. And right now, wages and salaries as a percentage of GDP are near a record low. This is a very deflationary state of affairs. The percentage of low paying jobs in the U.S. economy continues to increase, and we have witnessed an explosion in the ranks of the "working poor" in recent years. For consumer prices to rise significantly, more money is going to have to get into the hands of average American consumers first...

When The Debt Bubble Bursts

Right now, we are living in the greatest debt bubble in the history of the world. When a debt bubble bursts, fear and panic typically cause the flow of money and the flow of credit to really tighten up. We saw that happen at the beginning of the Great Depression of the 1930s, we saw that happen back in 2008, and we will see it happen again. Deleveraging is deflationary by nature, and it can cause economic activity to grind to a standstill very rapidly.

During the next major wave of the economic collapse, there will be times when it will seem like hardly anyone has any money. The "easy credit" of the past will be long gone, and large numbers of individuals and small businesses will find it very difficult to get loans.

When the debt bubble bursts, cash will be king - at least for a short period of time. Those that do not have any savings at all will really be hurting.

And some of the financial elite seem to be positioning themselves for what is coming. For example, even though he has been making public statements about how great stocks are right now, the truth is that Warren Buffett is currently sitting on $49 billion in cash. That is the most that he has ever had sitting in cash.

Does he know something?

Of course there will be a tremendous amount of pressure on the U.S. government and the Federal Reserve to do something once a financial crash happens. The response by the federal government and the Federal Reserve will likely be extremely inflationary as they try to resuscitate the system. It will probably be far more dramatic than anything we have seen so far.

So cash will not be king for long. In fact, eventually cash will be trash. The actions of the U.S. government and the Federal Reserve in response to the coming financial crisis will greatly upset much of the rest of the world and cause the death of the U.S. dollar.

That is why gold, silver and other hard assets are going to be so good to have in the long-term. In the short-term they will experience wild swings in price, but if you can handle the ride you will be smiling in the end.

In the coming years, we are going to experience both inflation and deflation, and neither one will be pleasant at all.

Get prepared while you still can, because time is running out.

http://theeconomiccollapseblog.com/arch ... rprise-you
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Re: Ramblings and Useless Predictions About the Future

Postby admin » Tue Apr 16, 2013 4:32 pm

Just to make useless predictions about the future a bit more fun to look back upon......I am posting this equally useless prediction that differs from my own useless prediction.

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Still think deflation’s no threat? For months this pathetic blog has been beating the same drum. Now the world’s tipped closer to falling prices, lower demand and a flight of capital from real assets to financial ones. The metalheads fought it every inch of the way. They’re now crushed.

Gold’s fallen the most in 30 years for one simple reason. It’s not because Goldman issued a sell. Not because Euro countries will be dumping bullion. Not just because of market calls or the elite trying to destroy an alternative currency. Gold’s toast because there’s no reason to hold it.

Investors were overwhelmed by events on Monday, of course. The Boston bombs just heightened fear and accelerated selling on all markets. In Toronto the TSX was whacked by staggering gold producers and sideswiped energy companies. Commodities were creamed. Silver crashed 11%, while oil and copper took a serious haircut. Even the latest housing numbers – sales down nationally more than 15% – helped lead to the same inescapable conclusion.

Suddenly it’s become clear inflation is not what we should be worried about. There’s no debasement of currencies because of government money-printing when prices aren’t bloating. When investors can own shares in profitable companies that have doubled in four years and pay fat dividends, why would you hold gold? The last thing any sane person can imagine is hyper-inflation.

Ditto for systemic collapse. If no major banks have failed and no countries gone bankrupt through the travails since 2009, then it’s obvious this will probably won’t happen. The US is unarguably stronger each month while Europe stabilizes. Central banks have tightened their grip on global finances, and when China spanks North Korea because the US asks, you know the rules have changed.

So in the absence of inflation or chaos, why hold gold? It pays nothing. It’s speculation. It’s a gamble against the dark side. It is pure emotion. Bought on worry or greed. Sold in fear or disgust.

Some say Monday’s stock drop is proof the wheels have come off everything. Not so.

US stock markets were (as I’ve told you more than once) ready for a correction. Falling commodity prices and a terrorist attack were enough to get it rolling. In Toronto, where the market’s dominated by miners and energy companies, the bloodletting was predictable. Some formerly impressive companies, like Barrick, may well not survive what’s just happened.

Financial markets which got ahead of themselves will probably retreat to their moving averages, before advancing again. Like last year (11% correction) or the one before (a 20% decline). So long as companies are making money, interest rates are cheap and America creeps forward, there’s no reason to keep your cash in a can in the backyard.

But neither is there reason for complacency.

Trillions of dollars have been spent on stimulus, and yet no economies are surging ahead wildly. News from China that growth had slowed was enough this week to set in a motion a chain of events ending in precious metals panic. Wages and salaries are frozen in time. Money’s as cheap as it will ever get, and yet demand for loans is waning. Real estate’s big recovery in the US still has prices far below 2005 levels. And in Canada we daily chronicle the wobble and descent of housing.

Without the central banks, the money-printing, the quantitative easing and the stimulus programs, we’d be in the grasp of a deflationary spiral. Wages and prices decline, followed by jobs and houses, then lower wages and prices. In this world nobody needs gold. They need assets which, like stocks or REITs or preferreds or even bonds, generate income. And they need money. With deflation, cash becomes more valuable. As that happens, stuff – oil, cars, copper, silver, real estate and gold – becomes less valuable.

This is the pattern you should have been expecting. Commodities get hammered. Volatility barely rises. Money flees dead assets. While Mr & Mrs Front Porch watch CNN and think about Nine Eleven.

From here, I will not even speculate on where gold bottoms or how long the margin-fueled hangover keeps stock values depressed. We don’t know if this is a pivotal moment or just a riveting interlude. But I do know we’ve been handed a lesson.

Remember what matters.

http://www.greaterfool.ca April 15th, 2013
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Ramblings and Useless Predictions About the Future

Postby admin » Mon Apr 15, 2013 4:39 am

I call this topic Useless Predictions About the Future because that is how I feel about those who try to "foretell" what is yet to come in the financial game.

However, having met and talked to several people now, who are so tuned in to things financial, and so able to connect dots that most people do not even see, I have to say I am impressed by the ability of some people to "see over and beyond the horizon". At very least some of them are able to think out the moves, like a chess master might be able to do, and to discuss and disclose some of those possible moves.

Having said all that I still think that following the predictions of others is a fairly useless exercise, as it takes away personal responsibility for ones actions, and can (and often does) lead to great disappointment.

I write down this short set of thoughts not in any attempt to influence, advice, counsel or recommend action by any. I write down these thought only because they are of interest to myself, to be able to return to them in years time and see what actually happened.

Prediction #1, April 15th, 2013.

Preamble: As we are at a point where the economy has suffered one of the greatest blows in history, the near collapse of the entire financial and banking system as we know it, triggered by rampant speculation in "weapons of mass financial destruction" (Warren Buffet quote) and toxic securitized products such as sub-prime mortgage investments.

As Central banks in the US and around the world have recently engaged in massive "pushing on a string" efforts involving virtual flooding of the world with newly minted or printed money in an effort to prevent financial collapse of the system itself.

My expectation is that there will be both good news and bad news:

The good news is that total systemic collapse has been prevented at this time.

The bad news is that it has been done at the cost of near total collapse of trust in the system itself, and the honesty of the system, as many consumers have gotten the impression that our financial system is one of "winner steal all", with no consequences for dishonesty.

The other bad news is that the economic rescue has only rescued "the system", and prevented its collapse, which admittedly would have been painful. Perhaps not as painful as what might some from the medicine it took to save the patient. Namely that our economy has been decimated by the toxic investments and the destroyed economy, destroyed trust.

I believe that this has caused North America, specifically the US, to find itself in what I am calling an economic depression, not based on principles of economics, but on principles of social and economic observation. Economists can call it something technical but I am saying that in some years to come, we will be looking back and calling it a second great depression. Today the "D" word is not politically acceptable and not available to a media which may be owned by corporate interests.

This leads me to prediction #2

I believe that the printing of what seem like trillions in currency, as "medicine" to save our financial system from collapse, will have an effect which will give us inflation. From today's economic depression to another ten or twenty lost years in North America. Lost years in that the economy and social fabric may just limp along rather unhappily, and with what might feel rather unfair to most, while bankers and politicians party on like it is 1994, to quote the song.

Followed by tomorrow, where inflation turns to hyper-inflation as a result of the "heroic efforts" by Central bankers to save our system.

That being said, is the cure going to be worse than the original sickness would have been? I think so, but that is just another useless speculation on my part. I think that the pain which could be to come, will probably be longer, certainly more unfair, and cause much greater harm to society than if the collapse would have been allowed to occur in 2008, and the cleanup undertaken immediately. Ultimately, I think we will look back and learn that economic bubbles should always be allowed to burst, rather than "treating them". Additionally, we may then know that allowing Central bankers to "run" our system is a bit "like giving whiskey and car keys to teenage boys", to borrow a quote from P.J. O'Rourke. I fear that this "medicinal" approach to keeping the patient alive is going to feel like intensive chemotherapy for years and years.....and years.

Future images from America? OK, this might be too bleak, but you have to fall in love with this smile.........

Again, this is just a stab at seeing over the horizon and that should not be forgotten. Do not invest any money or emotional energy in predictions about the future, unless they are your very own.
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