they will in the end just wipe all the paper money debt and start over,if everyone is broke,we will barter,and the banks are out of biz, they lied on top of lies and that will be the only solution,the king has no clothes ,he just hasn't been forced to admit it..who's going to pay who with what
are we in a recession?
- Thread starter brokerboy
- Start date
You mentioned specifically a 40-60% devaluation against the Yuan. Don't you think that's enough devaluation? Not to mention the cost of chinese labor is actually rapidly rising (especially due to their internal inflation, which we in part export to them)?
Did you know that there's now a chopstick factory in Georgia because... it's actually cheaper to export that to the far east? (http://www.economist.com/node/21525961)
These statements have nothing to do with what I said.
Read ..."Patriots" a novel of survival in the comming collapse. written by James Wesley Rawles...his blog is www.survivalblog.com.
People here become extremely bearish because it makes them feel smart. they feel they understand something no one else does.
Dig a little deeper into this whole song and dance about market returns and QE. Each round of QE ended with weak equities, which kept a relatively stable bid because various Fed mouthpieces would float the rumor of further QE iterations. Each round of QE has had less impact (we've got the numbers to prove this), as the amount of debt relative to gdp output continues to move in the wrong direction.
So we've reached some sort of endgame with this latest annoucnement a month ago. i.e. indefinite monetary easing...until whenever...Meanwhile, the backdrop for what is SUPPOSED to drive equity prices continues to weaken.
Basically, going all in on risk assets is just going all in on Fed omnipotence and nothing more. You literally have to hold your nose and ignore the stench of collapsing margins, soaring input costs and reduced end user demand and put all ye faith in Bullet Ben.
I don't think it's anywhere as close to cut and dry as you continue to imply in this sort of risk free call option that is the equity markets.
My fear is that Romney if elected might seek the serious devaluation route to cancel the debt to the trash bin. This would create hyperinflation for a while and bankrupt majority of American households but end if it all $16Trillion of debt will be out the window. Romney calls himself turnaround specialist and such guys seek to get rid of low performing assets and clean out the shop of them in order to focus on the core operating business. He has taken hard decisions in business world and would love to take those in political side too. His big ego wants his name to go into the history as the guy who got US ridden all its debts and started fresh from the debt shackles.
Also, Romney might go after illegal immigrants which are 20 million in the US. After chasing even 10 million of them out, he will push unemployed Americans to those low paying jobs that common American refuses to do today. Turning around companies is not easy and turning around country's heavily debt burdened economy is 10x less easy but hard decisions are in cards if under Romney directives.
This might mean that Romney hard decisions can:
Result 100% in Hyperinflation, Assets devastation for common folks
Result 75% in Economic Chaos and quick but painful depression
Result 50% in civil war type scenario
Result 25% in World War III (Chinese won't like $2Trillion 'IOU' loss)
It's a free world, mang. Seriously, when have risk assets maintained their value - or declined - under aggressive monetary easing? Care to name a few examples? To my knowledge, there are none. You guys are focused way too much on the micro picture. Yes, it's shit. But when Mugabe sent Zimbabwe into the dumpster looking for their next meal, the ZSE went parabolic. The marginal return on QE, in terms of equity performance is in decline, but so what? If it weakens further, just more reason to further stimulate or hike up the deficit. That's all they can do , and that's all they will do. Think about the alternative: a deflationary depression, which the FED and Treasury collectively spent, what? 10 Trillion over the past 4 years trying to avoid? Yet suddenly, they're about to throw in the towel, and send the banks, who own their asses, to chapter 11? Does that make any sense?
Just to clarify, I have zero faith in the Feds "omnipotence". I have 100% faith in the laws of economics. It's all about the money supply. Ben is no Volker. Lets not kid ourselves. The QE will never ever end until we get a recovery, or the dollar implodes. That's a guarantee.
Ya, I've got him bookmarked. Thanks for the reminder.
There's no easy decisions at this point, and whoever wins is going to be faced with either a massive depression - inflationary or deflationary. You're completely right to extrapolate beyond the economics, as the domestic chaos and soverign creditor fallout will send shockwaves through the social, political and foreign landscape. This is why people in the know are advocating to GTFO. Chances are, like you mentioned, it won't be a quick 18 month nail biter, and then back to normalcy. Americans will get turned upside down, marital law, all types draconian legislation, riots, crime waves, more printing after that then who knows what. As far as Romney, he's a shitbag. I don't trust either of these guys. Our fates are sealed, as far as im concerned.