The Fed is getting destroyed...massive bond losses

[StarDust9182]

Quote from piezoe:

I did not understand this. Debt holders should do well under a deflation. They will be paid in dollars worth more in purchasing power than the dollars lent. This raises the effective interest rate on fixed rate loans and should only harm those in debt. I thought that's the primary reason a country with large personal and government debt can not tolerate deflation. Am I wrong?

Equity is supposedly an increase due to adding value of some kind to a product ( or service). Debt is a promise to pay and a stream of payments (income). That stream and the promise has no real economic value other than faith. When the ponzi music stops, real economic value will become apparent quickly to you. Gold is not it.

Derivatives. Money is a derivative of essential needs. You can't do anything (eat drink, live in) with gold essentially. A bet on gold is a bet on the restart of the same monetary system of control and theft by those in control. Control of money is simply the bargain made 10000 years ago (safety for theft) when Daniel Quinn said our society changed.

We need to repair that bargain soon to a new society - perhaps equality, altrustic and no central command ( the weak point). Put down our fear and pickup the strength of helping others. The internet gives us the ability to move to that or the ability to suffer decades of more abuse. We will see what comes.

 

[StarDust9182]

Quote from piezoe:

Isn't the relative purchasing power of a currency relative to the currencies of trading partners the only thing that really matters in a global economy of fiat currencies? On that basis it would seem that the U.S. is doing OK. Not great, but OK. We seem to be able to deflate our currency competitively with that of our trading partners. So far anyway. But of course if we fail to produce anything of value to the rest of world we will be in "deep doo doo." I bought some beef steaks the other day. Had to take out a short term loan at the bank to do it, low interest though. I don't think we should buy a single one of those new F-35s from Lockheed, but they should sell like hotcakes in the middle east and elsewhere. Let's do it. Of course we'll have to cut of all "foreign aid" to keep from buying any ourselves.

Relative currencies can also hide inflation and deflation. That is something many people don't seem to undertand. It is OK to cheat your own countrymen but foreigners don't accept that taxation and theft for safety bargain so easily. I don't think one world currency will work either since then math and not politics will rule.

 

[StarDust9182]

Quote from pikachu9:

The UK lost its reserve currency status without too much of a negative impact. I don't see a need for becoming a "Prepper."
It will be okay to keep the puppy

When the UK lost it, the US picked it up. The US had the bigger guns.
China and Asia can pick it up from the US now, but this time they don't have the bigger guns (yet). That is concerning to me. If Russia, India, and China get together ...... oh my.

 

[trilogic]

Quote from StarDust9182:

When the UK lost it, the US picked it up. The US had the bigger guns.
China and Asia can pick it up from the US now, but this time they don't have the bigger guns (yet). That is concerning to me. If Russia, India, and China get together ...... oh my.

What's the trade? Big ideas and thoughts but no real point?

Gold off all time highs

Spread brent wti off of 25

Es soaring

Et is just chatter really? A feel good site to pronounce others political points wrong and technical analysis whither again no real trade

 

[Maverick74]

Quote from piezoe:

Well that's certainly the conventional wisdom and was true in the time of Babylon and up until the 1970s at least. I don't think it is correct thinking anymore however. Currencies are no longer tied directly to a hard asset such as gold, and economies are no longer insular.

If you want to protect the living standards in the U.S. you'll have to fix the public schools, and bring defense and medical costs in line with the other industrialized countries. There is more than enough money in the U.S. economy to re-build a strong middle class, it is just in the wrong places. Entitlements have nothing to do with economic problems in the U.S. They represent large pots of the money belonging to the countries citizens and as such are attractive to thieves. It's far easier for politicians to rob entitlements, surreptitiously of course, never directly, than to stand up to their masters in the medical and defense industries.

This has nothing to do with Gold. When you devalue money, you are essentially devaluing faith in the entire financial system altogether. This has serious repercussions. If you think we can destroy our currency and go on living our way of life as if nothing has happened then what you are saying is that money has no value right now. If you have faith now in what what the money in your wallet can buy then why would you have the same faith if it was proven that our currency was not a currency after all. It was simply an investment. An investment no longer has any value.

You see, when I talk about devaluing a currency. I'm not talking about devaluing it against gold or silver. I'm talking about a basket of essential goods and services. We are seeing that right now with the cost of healthcare, education, healthy food, real estate, medicine, drugs, etc. All the things you need to survive and prosper suddenly need a lot more of those green pieces of paper in your wallet. So sure, the dollar and the Euro may drop together netting out to zero net change and guys like you will be happy. But try paying for your kids college education when it costs 750k for 4 years. Or that anti-biotic you need to save your life and suddenly it went from $30 to 30k. Or trying buying a home in a safe area where your kids and wife will be safe when the entry cost is 10 million. What about going to grocery store and you see your normal $150 bill is now 5k. But hey, the USD/EUR is still 1.30 so you you should happy as peaches. Right?

 

[Maverick74]

Quote from trilogic:

What's the trade? Big ideas and thoughts but no real point?

Gold off all time highs

Spread brent wti off of 25

Es soaring

Et is just chatter really? A feel good site to pronounce others political points wrong and technical analysis whither again no real trade

What are you asking? A trade for the day, the week, the month, the year? Nobody here is going to time this. Are you asking for a trade to put into your IRA for 30 years that could have a 100 to 1 payoff. I'll give you trades but here's the deal, there are an infinite number of time frames. Without defining that or your risk levels, then talk about trades is useless. There are guys here who bet on the end of the world by shorting the spoos and the cover when they are two ticks in the money.

 

[trilogic]

Quote from Maverick74:

What are you asking? A trade for the day, the week, the month, the year? Nobody here is going to time this. Are you asking for a trade to put into your IRA for 30 years that could have a 100 to 1 payoff. I'll give you trades but here's the deal, there are an infinite number of time frames. Without defining that or your risk levels, then talk about trades is useless. There are guys here who bet on the end of the world by shorting the spoos and the cover when they are two ticks in the money.

Hi

time frame six months or so I am really interested in the TI BRNT spread however the currencies may blow any other reasoning for shorting ti and buy bbrnt

Near term I like some nat gas bear spreads

I would love to hear a bullish gold spread rather than outright rolling

 

[StarDust9182]

Quote from trilogic:

........

Et is just chatter really? A feel good site to pronounce others political points wrong and technical analysis whither again no real trade

Sometimes, it is good to frame the bigger picture and sometimes it is good to focus in on specifics for trading. Different ideas are good to help firm up your own ideas. There are some very intelligent people on this site with which to compare your own trades and thinking. I appreciate their comments even (and particularly) when they disagree with me. I am not sure who is forcing you to read this far? Tell them to let you do other things!

In a balanced market, the trades will be easy to spot and you will not have to read them from ET (believe it or not). Trade with reality (which ever side you think that to be) against common belief at the correct time.

How do you know when you are wrong in your convictions? You need to know the other side. Some of my best trades occurred (uranium for example) when a group of traders were on one side and I was on the other side. Just one or two of those will allow you to retire at 50 or you can scalp ticks and retire early well. Or you can continue to look for the magic trade that some smart fellow (it won't be me) posts on ET.

 

[trilogic]

Quote from StarDust9182:

Sometimes, it is good to frame the bigger picture and sometimes it is good to focus in on specifics for trading. Different ideas are good to help firm up your own ideas. There are some very intelligent people on this site with which to compare your own trades and thinking. I appreciate their comments even (and particularly) when they disagree with me. I am not sure who is forcing you to read this far? Tell them to let you do other things!

In a balanced market, the trades will be easy to spot and you will not have to read them from ET (believe it or not). Trade with reality (which ever side you think that to be) against common belief at the correct time.

How do you know when you are wrong in your convictions? You need to know the other side. Some of my best trades occurred (uranium for example) when a group of traders were on one side and I was on the other side. Just one or two of those will allow you to retire at 50 or you can scalp ticks and retire early well. Or you can continue to look for the magic trade that some smart fellow (it won't be me) posts on ET.

Thnx agree with your points except scalping no idea hoe its done today was locals stealing front running and brokering all st the same time but that has all but gone

 

[denner]

Quote from Maverick74:

This has nothing to do with Gold. When you devalue money, you are essentially devaluing faith in the entire financial system altogether. This has serious repercussions. If you think we can destroy our currency and go on living our way of life as if nothing has happened then what you are saying is that money has no value right now. If you have faith now in what what the money in your wallet can buy then why would you have the same faith if it was proven that our currency was not a currency after all. It was simply an investment. An investment no longer has any value.

You see, when I talk about devaluing a currency. I'm not talking about devaluing it against gold or silver. I'm talking about a basket of essential goods and services. We are seeing that right now with the cost of healthcare, education, healthy food, real estate, medicine, drugs, etc. All the things you need to survive and prosper suddenly need a lot more of those green pieces of paper in your wallet. So sure, the dollar and the Euro may drop together netting out to zero net change and guys like you will be happy. But try paying for your kids college education when it costs 750k for 4 years. Or that anti-biotic you need to save your life and suddenly it went from $30 to 30k. Or trying buying a home in a safe area where your kids and wife will be safe when the entry cost is 10 million. What about going to grocery store and you see your normal $150 bill is now 5k. But hey, the USD/EUR is still 1.30 so you you should happy as peaches. Right?

You are absolutely correct...but guys like Piezoe and an assortment of other aging baby boomers are perfectly ok with devaluing the currency just enough for them to live comfortably for the next twenty years (until they die off). Just dump all the problems on the next generation; let them worry about how to afford a college education, let them worry about how they are going to buy a house in a good neighborhood, etc, etc...

Just let these boomers have their artificially inflated stock prices until they need to sell all their holdings.