Great Depression II (2000-201?)

[BloodTrader]

Quote from andrasnm:

People who are too self-absorbed to notice - this is it! Your grand-father has lived through it so you shall.

What so many people fail to consider fully, or at all, is the tremendous impact that environmental problems and human overpopulation are going to have. We have been so successful at staving off disaster that we think it can go on forever. It's kind of like having a market PE of 100 and saying it's OK because it is different this time. We can stretch it out for quite a while, but that will only make the subsequent problems more severe.

No big deal for an old guy like me, but my grandkids are going to have a tough slog and, like most Americans they are soft.

m

 

[ratboy88]

is there info similar to this that breaks down the fallacies in the govt. unemployment numbers??? i know real unemployment is higher than the 5.6% they are touting. seems like they only count those that are collecting benefits and not those who have fallen off. i've heard the real rate is appx 11%.

 

[gamalruach]

Quote from andrasnm:

People who are too self-absorbed to notice - this is it! Your grand-father has lived through it so you shall.

I have an old friend who has lived through the depression I as well as the WWII in Europe. He 79 and a self-employed plumer and metal sculptor. He is poor (get's social security) and still has to work for a living. He told me this; he - as poor as he is, he still HAS EVRYTHING. A VCR, TV, 2 phones, car etc etc. This is the same for the general US. When the multi's start squeezing us we just don't buy any more goods.

The official BS of percentage of application for unemployment benefits is a statistical lie. The jobs are not created and there are exported to the lowest bidder meanwhile bleeding off the domestic tax base plus the US Treasury.
The US is saturated and consumer confidence is bad (no matter the sad/pathetic economist trying to say otherwise)

It is a vicious circle and if you are employed or a small business you have a true reason to be paranoid - you are next!
The next big one hitting the US may come next year surely will put us over the brink and by than the dollar will likely be worth 30-40% less.

The giant snake started to eat it's own tail... It is only matter of time when it chokes.

When the dust settles we shall have a new world order albeit a little different as the neo-con politico's predict..
Futures traders however can profit from knowing what is coming.

Short the dollar, gold is a buy, so is crude oil, eventually bonds will come around and rates will go up, and up....most hard assets are a buy.
When things will unfold as I suspect the stock market will sell off. As we surely have negative growth after the generous tax giveaway wares off we shall have some political ramifications i.e. change in US social policies.
As inflation and hard asset inflation pressures will elevate the treasury bond yields so will corporate bankrupcies elevate the corporate bond yields.
This undoubtedly means the end of the real estate bubble in California. Rates are everything to construction and real estate market.

My futures trend predictor so far has worked well. Knowing the macro economics and picking on trends early can make you wealthy enough not to care about my predictions.

andrasnm: What you're pointing out is probably likely to occur with two exceptions.

1) The time frame may be a little later than you indicate.

2) The structure of the reasons for the Great Depression II may be different than you stated.

Otherwise, shorting the dollar is probably a good choice.

However, this econimic meltdown will effect other countries/currencies as well so going both long and short, long and short EUR/USD is a better trade plan.

Perhaps this is exactly what Warren Buffett and George Soros see happening that is why they are shorting the dollar.

I am beginning to think the GDII will be triggered by Middle East events and will be a snowball effect similar to the Asian Currency crisis, only, this time the USA/USD will sucked down to Hell before this too sorts itself out.

In terms of effect it will go Middle East (Arabic/Islamic terrorism) > USA/USD > Japan/JPY-China/yuan > EUR and so forth.

It will definitely be a dominoes effect.

A key element is debt replacing true structural growth and strength.

Cheers!

Sam

 

[illiquid]

Probably a more likely scenario will be that US remains in a stagnant period because of our enormous public and personal debt levels, yet other parts of the world may continue to grow strongly -- most likely Japan + China, and perhaps even India further down the line. Eventually the huge population levels in Asia will surpass America in terms of total consumption level and contribution to world growth, and our troubles by then may not be the disaster to the world we all now imagine. JMO on the brighter side of things

 

[gamalruach]

Quote from illiquid:

Probably a more likely scenario will be that US remains in a stagnant period because of our enormous public and personal debt levels, yet other parts of the world may continue to grow strongly -- most likely Japan + China, and perhaps even India further down the line. Eventually the huge population levels in Asia will surpass America in terms of total consumption level and contribution to world growth, and our troubles by then may not be the disaster to the world we all now imagine. JMO on the brighter side of things

illiquid: The problem with Japan, as I understand it, is that its banks buy shares of public companies out of the Nikkei.

You know what happened when US banks once did that. Stock market crash 1929/Great Depression.

gsr

 

[illiquid]

Quote from gamalruach:

illiquid: The problem with Japan, as I understand it, is that its banks buy shares of public companies out of the Nikkei.

gsr

Cross ownership between banks and other corporations has always been a problem, but with foreign appetites for Japanese equities growing, they may be able to unload those shares onto willing buyers -- it's an old issue that has long since been priced into the Nikkei by now imo.

 

[gamalruach]

Quote from jstanton:

There is much denial here, obviously. The worst disaster that can ever befall a culture based on capitalism is economic depression. It is such an unmitigated disaster that we have done an historically masterful job at totally denying its reality. We have passed laws against it (National Industrial Recovery Act of 1933 and the The Social Security Act of 1935). We have renamed it (severe economic downturn). We have successfully delayed it (lowering interest rates and printing up money simultaneously). We have convinced ourselves it is acceptable to borrow against it – even though that makes its ultimate effects even worse (relaxing credit and actively encouraging a refinance mania in the face of a mounting immoral deficit). And we have finally managed to jargon ourselves around it. The whole happy parade is led by Wall Street talking heads who are, in fact, nearly all paid lackeys of firms that make their money on a robust market (manufactured or not) and plenty of gullible investors that suck up their every confident word and literally bet the farm on charged and/or refinanced laptops.

Depression is inevitable because of the historic and mind-boggling debt, because of the total lack of fiscal integrity, restraint and control of the government and because everyone has lied to so many people for so long, no one knows the truth anymore and certainly no one believes anyone else, particularly about the new paradigm economy of instant gratification. Our culture is propped up on toothpicks and our in-basket is loaded down with tons and tons of debt, all of it about to be called in. In case you have not heard, there are funny popping sounds emanating from just beneath where we are all comfortably seated enjoying our lattes and cappuccinos at our favorite hi-tech computer bars.

I am fairly certain that Alan Greenspan probably knows what is ultimately coming down. Regardless of what his detractors may say about him, Greenspan is truly an economic genius and has masterfully delayed disaster and using tricks of monetary manipulation that should win him some historic prize one day, many generations from now. Unfortunately, his genius will probably end up turning against him while he lives. He has not saved us from depression, he has only staved it off and ultimately, made it worse. When the coming depression happens, it will almost certainly be pinned on him and, almost without question named after him! Why? Because the rest of the jolly liars will need a scapegoat, and it will either happen on his watch or shortly thereafter. One day sooner than later, Greenspan (if he is as smart as I believe him to be) will simply disappear, leaving them and the freezing Emperor of the economy standing out on the street all alone and fully exposed with the snow blowing up into uncomfortable places. When they finally figure it out, they are all going to be livid. And when they announce, as they will, that Alan Greenspan has left the building, get ready to hunker down.

What is next? Get ready for a triple punch soon and make your plans accordingly.

Punch one: watch for the markets to slide to new lows this summer and particularly this fall. This will cascade into four linked effects: the dollar will tumble as the Euro will mount a real challenge as the world currency of choice, convincingly displacing the dollar. Gold will soar, approaching $800 to $1000 mark within a year or two. (You heard it here first.) International confidence will begin to fail resulting in loss of significant foreign investments and our international debts could be called in at ever increasing levels. Forget the bond markets (snore). Wait till you witness the inevitable, predictable and powerful political effect of the declining economy in the November elections. The administration’s only hope for survival or even circumventing a massacre at the polls will be leveraging the Greenspan genius and delaying the inevitable market convulsion this fall.

Punch two: the government will have to begin printing money in unprecedented volume by the coming, long hot summer of 2005. A new administration, emboldened by its mandate to “fix the economy” will naively respond to the evolving crisis by reversing the Bush tax cuts and raising them even beyond previous levels. This will only exacerbate the economic dilemma, of course. Eventually, interest rates will spike considerably higher than even on Carter’s watch. Inevitably, jobs will be lost and productivity will spiral down the government’s fiscal toilet as the economy cannot possibly sustain the stress. Perot’s ‘great sucking sound’ will emanate not from our southern border, but from Wall Street itself.

Punch three: As the tax base implodes, as the debt is called in and as the deficit spikes through the stratosphere, somebody somewhere will finally declare the Emperor the pervert that he is. He will then sit on Wall Street in sackcloths and ashes, but it will be way too late. It already is.

One of my Internet heroes, Jim Puplava, has been publicly calling the Emperor a pervert for over a decade. He has mounted an interesting theory that while all this economic insanity is hanging over our heads that it is conceivable that the nation could be hit with an unpredictable event that he calls a Rouge Wave or a “ten sigma event” that would either trigger an uncontrolled economic meltdown or make an ongoing economic disaster even worse. Such an occasion could be a terrorist attack on par with or worse than 911, or an international incident of such magnitude that it would inevitably adversely affect every civilized nation’s economy. Such rogue waves, Jim writes, are totally unpredictable and play on the weaknesses already inherit in the world’s invariably linked financial systems, weakened by historic excesses and apalling debt.

So what do we do now?

Don’t worry, be happy.

Hey – everybody else is! What is going to happen has already been set into motion anyway. We are all seated comfortably and in style on the great fiscal ship Titanic. Night is falling. The air is festive. We are feeling our great and lofty positions as the band plays on and the great ship sails off into history. Why, not even God Himself could sink this greatest economic juggernaut in the history of mankind! Oh by the way, we have just been handed our latest assignment: re-arrange the deck chairs and get ready for tomorrow’s next big boom.

Until then… It’s the depression, moron. Deal with it now or deal with it later. And, oh by the way, if you thought the half-time at the Superbowl was lewd, don’t tune into Moneyline, whatever you do. The Emperor is a mainstay and they don’t just do headshots.

Dennis Chamberland

dennis@chamberland.us

"convincingly displacing the dollar."

Nothing will ever replace the dollar and if you traded forex you'd know that. Price differential may kick in, but no one well be convinced EUR is replacing USD. EUR is struggling to keep itself from imploading.

"the government will have to begin printing money in unprecedented volume by the coming, long hot summer of 2005."

The government will NEVER print money like that.

"He will then sit on Wall Street in sackcloths and ashes, but it will be way too late."

No one will EVER sit on Wall Street in sackcloth and ashes.

Dennis, are you some kind of an economist/analyst? Because you certainly are not a trader.

Sam

 

[illiquid]

Quote from gamalruach:

"convincingly displacing the dollar."

Nothing will ever replace the dollar and if you traded forex you'd know that.

Sam

I'd think experience trading in any market would lead one to conclude that any weakness/strength of a market can go much further than previously imaginable -- especially currencies. Any number of events can contribute to the dollar plunging sharply (e.g. nuclear terrorism), and even a further global sentiment shift away from the dollar (OPEC officially pricing oil in euros or other basket) would eat away at the "reserve currency" premium the dollar still holds.

Just because you've survived a few trades without stops doesn't mean the market will always snap back to prior ranges -- be careful out there!

 

[gamalruach]

Quote from illiquid:

I'd think experience trading in any market would lead one to conclude that any weakness/strength of a market can go much further than previously imaginable -- especially currencies. Any number of events can contribute to the dollar plunging sharply (e.g. nuclear terrorism), and even a further global sentiment shift away from the dollar (OPEC officially pricing oil in euros or other basket) would eat away at the "reserve currency" premium the dollar still holds.

Just because you've survived a few trades without stops doesn't mean the market will always snap back to prior ranges -- be careful out there!

illiquid, don't be a dumbass, alright?

whathisname made a statement that the EUR will replace the USD.

it's utter ignorance. He stated it because he doesn't trade jack cheese.

Analysts/economists, even many desk traders, don't know what time of day it is when it comes to trading, currencies or otherwise. The statistics of 99% of traders getting bagged in the markets would indicate that very few people do know anything.

I did say that, should those events happen that you depicted, the USD will have a differential price movement, yes, even a severe one, but the USD won't be replaced as that guy said: Only screaming mimis would state that.

And, as far me "surviving a few trades without stops" you still don't get it. "Be careful out there"?? Buddy, you don't NEED to be anything "out there" when you know what you are doing, and WHY you are doing it, and when.

Lemme give you an example, alright?

On yet another EU rate cut rumor, EUR/USD fell to a new floor of 1.2074 last Friday. It fell from 1.2363, nearly 300 point vertical drop. I opened only long trades all the way to the bottom - and closed each one a winner making profit - no losses - using no stop losses.

At the bottom most traders would place a long trade there, but most traders lose. What did I do? Based on probability I opened a short position. Even one of my trading buddies was yelling at me to "open only long trades!" I knew it was going to go straight up, but I did what I wanted to do. I didn't do what the market dictated to do.

At around 10AM, later that morning, I closed the trade with a huge profit. Again, I used no stops.

So pls, don't indicate that I don't know what I am doing.

Most (loser) traders run to avoid trading nightmares, well, I AM the nightmare of trading.

Thank you,

Sam

 

[ertrader1]

Most (loser) traders run to avoid trading nightmares, well, I AM the nightmare of trading.

Thank you,

Sam


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