Posted on 12/30/2009 6:51:14 AM PST by blam
'We're On The Path For Fireworks In 2010'
by: Prieur du Plessis
December 29, 2009
Many commentators have over the past few days churned out lists of 2010 predictions. Although never one to produce best and worst lists at the turn of the year, Richard Russell, 85-year-old doyen of newsletter writers and author of the Dow Theory Letters, did express a major concern, as quoted below:
I’m thinking that we’re on the path for fireworks in 2010. The reason I say that is because the federal deficits are running into the trillions of dollars. The roll-over of debt coming up in the next two years defies comprehension. For instance, in the next two years the U.S. must roll over $2.5 trillion. Worldwide, banks during the coming two years will have to roll over $7 trillion. On top of that commercial real estate in the U.S. has $750 billion to roll over.
Whether all this debt can be successfully rolled over is doubtful, but one thing is clear - interest rates will go up. This will have an immediate impact on housing. Nobody can negotiate a mortgage now - and worse, nobody has the money to buy a house for cash.
In the face of the deflationary events described above, the Fed will have to create a massive torrent of money. This should be highly inflationary - on top of the forces of deflation and semi-depression. Thus the base will be set for an inflationary depression, during which time the very viability of the dollar will come under suspicion.
[snip]
Stay strong!
We’ve kept our business in ‘slow roll’ mode since the election.
The math never lies. The government has done nothing but extend and pretend which will not solve this debt crisis.
from the article you posted...
“there will be foreign exchange controls, and once we have those, your alternatives will be severely circumscribed.”
Could you elaborate?
Sorry, no. I'm a retired chip-maker and mostly post these articles to gain insight from others too.
Someone will probably be along shortly with an answer.
Ever since going all in on the market in March, I’ve looked for the right time to get out. My analysis says its time to get out then I read FR and there is too much worry to quit. I finally quit today even though my FR worry indicator is still very bullish.
What is the VIX?
“there will be foreign exchange controls, and once we have those, your alternatives will be severely circumscribed.”
I guess you won’t be able to invest in foreign stocks. It might also be hard to vacation abroad. If it comes to it, you might not be able to emigrate without losing your shirt.
bookmark
http://www.investopedia.com/terms/v/vix.asp
Funny part is, my best friend Bob - who also owns a store....and STILL likes Obama said - in the same sentence - that his “business was down 25% over last Christmas” but “things are better for people than they were last year”.
I TRIED to show him the absurdity of his contradictory statements.... but, as I’ve said 1,000 times before - Liberalism is a religion - NOT a philosophy.
We are shutting down the brick & mortar store and are going to try to up our web presence a bit (I have been slightly remiss in that area - only so much time in a day) Our long-term goal is to relocate to either Miami or St. Thomas and re-open there as our products are perfectly suited to “tropical spending” and cruise ship customers...
What’s a vacation like?
Funny....I remember when I USED to get one - before we started our business.
Funniest part is, I make everything we sell myself....so I work out of my basement. My friends from my previous employer just think “He doesn’t do anything - he’s just home all day”.....yeah
I start at about 6AM and go until about 8:30 pm......and I fall farther behind every damn day.....
See the article in post #2 for a complete defination:
"The Volatility Index (Chicago Options: ^VIX), also called VIX or fear index, measures how concerned options traders are that prices will drop. As with all sentiment indicators, the value of the VIX lies in its contrarian application. For the first time since August 2008, the VIX has now dropped below 20; a reading that has foreshadowed trouble in the past."
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