are we in a recession?
- Thread starter brokerboy
- Start date
I think most of us in this thread agree on where these sick SOB's are taking not just the US but the Western industrialized (for now!) world. Anyone with opinions of time frames? When does the panic start to set in? When do guys with families realize that having a decent job or even a good job might not protect them from the storm that is gathering?
When does the man in the street begin to realize the enormity of the scam?
When does the man in the street begin to realize the enormity of the scam?
How would we know? The government LIES ABOUT EVERYTHING!
"Perfect" = what? Like my grandma's snatch?
No, I'm not. You don't understand the ECB and FED operate under different charters. As far as QE and it's affect on equity/commodity prices, you'd have to be blind not see the correlation. Pull a chart, note the start and end dates. Anyway, believe whatever you want. The market only goes up from here. Maybe we sell off 10-15%, doesn't matter. All your concerns are irrelevant. I don't mean to be rude, but you need to understand the fundamental relationship between monetization/credit growth and asset prices. That's the key to investing. Good luck.
Bill Gross said 5-10 years, but caveats any treasury capitulation could happen in a matter of days. At the current rate of deficit spending, that's around 145-190 Debt-to-GDP. I think that's far too rosey. Volatility will pick-up in 2 years, at the latest 3 years (~130 debt to GDP). That's where the markets kicked in for Greece, Spain and Italy. As for Japan, we're not them. Roubini noted, Japan is a net creditor nation (total value of foreign securities is larger than it's outstanding debt). US is net debtor. Also, while the deficit is in decline, QE3 was ramped up. It's six or one half dozen. Look at the new QE (500 billion, per year) + ~4 trillion FED balance sheet. The Government could run up the deficit by another 500 Billion (1.7 Trillion, per year), eliminate QE3, and it would have the SAME EFFECT on the USD. 75% of all Treasury debt is now "purchased" by the FED anyway. The point here, and sorry because this is long winded, QE was ramped up to get the paper deficit down. Because it's a hotbutton issue for Washington. But the quantity of monetization has remained about the same (~1.2 - 1.4 Trillion per year).
The panic sets in after Treasuries collapse and the FED intervenes with emergency buying. Rates will stay low, but the dollar will collapse. Again, it could be bad. Maybe 40-60% devaluations against oil, commodities, agricultural products, Chinese Yuan, within the first month. Import prices and food prices could easily double within a few weeks. That month, unemployment will spike. We'll see it in the first NFP >500k jobs lost. Next, month, we could see numbers well over a 1 million. I wouldn't doubt for a second, the BLS will fudge the numbers to calm the markets, but it will be a major, Depression at the point. 1 month in, the bottom 20% won't have enuff to eat. 3 months in, there could be well over 10 million jobs lost, with the bottom 50% going hungry. It will be chaos, at that point. All the while, the FED will continue to debase, so in the end, we could see 400-500-600 dollar oil. Anybodies guess. I expect we're short around 20-25% GDP. Perhaps higher. That translates to at least, 26 million jobs lost. Whether the BLS reports it or not, payrolls will hemorrhage jobs in the multi-millions, per month. It will be a major, major, inflationary depression.
As for plans and family, I work hard so i can bail my family out. Everyone except my dad is ignorant to the situation. I wouldn't want to be anywhere in the UNited States. I'm in the process of buying some rural property up here in Ontario (farmland). If I earn enough, God Willing, I will buy some farmland in South America. How about you man?
This would take me a lot of time to answer and I have to go.
The deficit and QE are propping up US GDP.
Look up the GDP calculation and factor in the deficit + QE x the fiscal multiplier. That's how much debt the US needs to finance it's current GDP.
No, we can't export our way out of this until the US and Chinese labor costs are roughly on par, with each other (3 dollars an hour). Until that happens, Chindia will continue it's stranglehold over global industrial production.