yup, LOL...
Posted on 08/27/2014 5:07:06 PM PDT by SkyPilot
Edited on 08/27/2014 5:09:23 PM PDT by Admin Moderator. [history]
Markets could soon face a fall of up to 60 percent, two experts told CNBC on Wednesday.
A jolt to international confidence in central banks will lead to a 30 to 60 percent market decline, David Tice, president of Tice Capital and founder of the Prudent Bear Fund, told CNBC's "Power Lunch." When this happens, he said, markets will face a "period of extreme turmoil."
(Excerpt) Read more at cnbc.com ...
I will continue to invest in gold, silver, lead, copper and brass.
Well, ince the only ones holding stocks are the banks and those were bought with Fed funny money, I imagine no one will notice. The old question about the tree in the forest comes to mind...
Actually ..... the reality is that since the repeal of Glass Steagall and the creation of 401ks, Roth IRAs and other assorted Wall St. flavorings, and the ability to direct required contributions to a menu of stocks and indices offered by financial services such as Fidelity and others that are joined at the hip via leveraged accounts with Fed Member Investment Banks, the stock market must be floated higher and higher to pacify the growing aged population of retirees or soon to be retirees.
In other words, the original purpose of stock exchanges has been supplanted by social policies that steer the Fed to concoct pathways to capital markets for its preferred members and the result is a bubble in stocks.
There is also the necessity to keep the lid from blowing off on interest rates which would otherwise throw the federal government into a downward spiral of chaos. Low interest rates spur 401k managers to allocate a portion of their aggregate portfolios to stocks and/or encourage account holders to do the same.
As was posted years ago by this poster with other Freepers, the purpose of these bubbles is to:
1. Pacify the senior demographic
2. Keep the Federal government solvent.
Other ancillary purposes involve creating an inflationary environment by design to extinguish toxic debt left that remains from the subprime collapse.
I personally do not believe the currency is so much at risk as is the destruction of free market dynamics which are practically irrelevant these days. In other words the ‘market’ is not a market, it is a rigged flow process driven by Fed policy. What are the consequences if a false market without a free supply-demand dynamic? Of course there will be some specks of supply-demand dynamic here and there but they are mere ripples compared to the waves caused by the Fed Reserve’s enormous money engines.
Destruction of supply-demand volatility is the result of allowing a centrally planned economy. This puts the USA on the fringe of socialists-fascists who believe that it is government that makes things work. What does the USA look like without free markets?
The stock market ceased to be a symbol of free market capitalism many years ago. It is rigged by Fed policy and by clever tech traps such as HFT flash trading and dark pools. In short, it is today a farce.
What is relevant to the dynamics of the policy today is the national debt that the Fed itself holds. This debt is much much higher than that held by foreign governments or domestic entities. And the Fed if it is inclined can just ‘delete it’. The only US debt that must be paid are on notes to foreign and domestic entities (non-federal government debt). More than 10% of the fed govt budget goes to debt service and with higher interest rates that 10% would explode.
So what are the consequences of a Federal Reserve hitting the delete button on US Debt that it holds? This would be an engineered US bankruptcy with discharging all debts held by the Fed Reserve to the United States. Would there be a devaluation? I don’t think much. That’s the good news. Of course the prestige of the USA as a free market wonder of the world would be take a hit. But today academics and politicians are inclined to throw their hands in the air and express a general sentiment “who gives a frick?” because they and we don’t know the consequences, yet.
The real consequence is what is called the moral hazard. And that is in the eye of the beholder. We don’t know where we are going, we are in uncharted waters. But one thing is certain, if the USA becomes a second rate nation with no force of attraction, the currency will collapse.
yup, LOL...
Wait till the revision comes out tomorrow. GDP - 3 percent recalculation factor will be.......
YOu need a slight correction to go higher. Corrections last only a year or so.
But a correction of up to 60 percent--well, that is the very sort of thing that one might expect of someone running "the Prudent Bear Fund"...
Absolutely.
Finally someone with a lucid analysis of why stocks are such a farce. They have replaced defined pension plans, and Washington has borrowed so much money to pay for entitlements that we cannot afford to have that slice of our Federal expenditures called "interest" to take up most of the budget.
So we are in a Catch-22, and not in a humorous way.
As to the second part of your brilliant post, the Fed could "delete" the debt, but that would come at a HUGE price for this country. Liberty would be absolutely dead. Other nations would extract a massive price from us as well, and our sovereignty would be destroyed.
Perhaps that is what will happen.
7-8000 is about where things “should” be. Everything else is government deficit spending. That stops, the already popped bubble deflates. Again.
Can’t keep spending money we don’t have.
Not going to happen while Obama is in office. The powers that be behind the scenes will make sure of that.
“The Harbinger...”
September 13, 2015
Elul 29 (End of the 7th year Shemittah cycle)
Y2k
Crash 1999
Crash 2000
this would be a chance to buy.
"This chart from Morningstar shows the performance of the fund over the last ten years, with $10,000 invested in the fund worth $5,340 today. In contrast, $10,000 invested in the S&P 500 over the same period would be worth $22,244 today."
The old joke is that economists have predicted 25 out of the last 10 recessions...
1994 was about the time I started cashing in my old E bonds. Just looked like they were going to turn into krap and pretty much have. I used most of the money to buy more guns and they have done way better.
But here’s my question: If this whole zero interest rate thing with the Fed “buying” all the US gummint debt is such a flaming good idea why didn’t they do it back in the Carter high interest rate years?. Those double digit rates hurt us for over a decade and this bubble started just at the time that rates got back to normal in the late 90’s? Huh? Why? It is indeed time to be on your financial toes.
It’s all a part of the Federal Reserve - induced business cycle. Can we really expect a stable economy if credit is so stupidly easy to obtain, and dent is so stupidly hard to collect?
It’s a disgrace that very few politicians even discuss abolishing the Fed. Nixon’s termination of the Bretton Woods system puts him in contention for the worst Presidents ever (only topped by treasonous Democrats since and including Wilson). Even Reagan seemed to grudgingly accept it once he settled in to his Presidency (if Nixon could do what he did, surely Reagan could have abolished it).
This type of stuff is put out to test the waters and gauge complacency.
Generally you do the opposite of what people like him recommend.
Proof that one should never bet against the Fed. ; )
Gold is staying below $1300 an ounce, silver less than $20.
Doesn’t sound like Germany in 1923 just yet.
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