Posted on 02/20/2010 7:14:51 AM PST by blam
Global Stock Markets And General Economics 2010, When Hope Turns To Fear
Stock-Markets / Financial Markets 2010
Feb 20, 2010 - 06:47 AM
By: Ty Andros
"Paper money eventually returns to its intrinsic value ZERO" - Voltaire 1729
The greatest hoax and fraud in history perpetrated by public serpents, crony capitalists and their central bank and bankster masters continues to fall to its demise. Ever since Breton Woods ii changed semi-sound money into iou's and promises to pay, this inevitable moment has loomed large. As Ponzi finance fails, so do all the investments which underpin it. This is the greatest reversion in asset prices, mal-investments, to their real values -- reflecting their ability to produce wealth rather than the constant debasement of the currency in which they are denominated.
Now is not the time to hide or stick your heads in the sand with your investments as your paper currencies and bonds are BURNING. They will fall victim to the central bank printing presses and morally and fiscally BANKRUPT politicians in the social welfare states of the developed world.
Volatility is set to expand once again, both up and down in many markets and VOLATILITY can be opportunity for investors. You must learn how to restore the functions of money, implement investments (absolute return alternative investments) that have the potential to thrive in up and down markets and seek the INDIRECT exchange, as outlined by Von Mises. CASH is no refuge and neither are bonds.
The broad public is still asleep at the wheel, duped by the "politically correct progressive" main street media, central banks, public serpents and the governments in which they have misplaced their trust.
They are impoverished by inflation as a policy of government rather than the production of wealth on which their societies rose. The "something for nothings" will eat and destroy the foundations upon which their formally capitalist economies produced rising middle classes, borrow until they can borrow no more and eat their most productive citizens and businesses until they COLLAPSE under the weight of the people who vote for a living rather than work for one.
The initial bounce in markets and economies off the March 2009 lows is mostly OVER and, as you shall see, last month's TECHNICAL action in many markets spells trouble dead ahead. Almost universal bullishness as the year began is under relentless assault and will remain so. The "when hope turns to fear" moment is at hand. Markets will zoom all over the place to PRICE in the collapsing social welfare states and their unpayable liabilities.
Greece is just the next canary in the coal mine and will be repeated over and over again until the Big Daddies at the Bank of England, Federal Reserve, Japanese, European, and Swiss central banks join their Greek brethren. This picture is clearly seen THROUGHOUT the developed world as politicians and their special interest elites have PAPERED over poor economic and financial decisions for DECADES.
Now these POOR decisions and STRUCTURAL issues are pushing them to the final economic demise. The game is up; Darwin is at the door; it is now: produce more than you consume and be globally competitive or fall to your demise. Unfortunately, our leaders believe they can repeal the laws of nature and they themselves are GODs, when in fact they are strong-armed dictators.
Look no further than the latest budget proposal from the chief executive of the United States. After expanding government by 50 percent with the 789 billion dollar government expansion bill, misnamed stimulus (to fool the public), it now calls for an expansion of government of 1 percent per year as a percentage of GDP. Government as a percentage of GDP is leaping higher and by 2012 is projected to climb from 20 percent when the progressives took over in 2008, to 25 percent today to 30 percent in 2012.
Take a look at this recent chart (www.wsj.com) of federal spending versus household income. It goes back to 1970, just before Breton Woods II initiated the acceleration of government and unsound money (money that could be printed out of thin air or lent into existence.) Next to it I set the chart of household income properly adjusted for inflation from www.shadowstats.com:
This is PRECISELY why incomes and the US economy have evaporated, this is the true picture of what public serpents, banksters, crony capitalists and central banks have done to FLEECE the sheeple they claim to serve. The only one served is them; the broad public and private sectors are ROBBED!
Now they are expanding the government budgets by another 50 percent, as they are never satisfied and have no moral underpinnings. This is a picture of creeping socialism and the DEATH of capitalism, also know as producing more for less which creates expanding wealth and rising middle classes.
Debt-to-GDP will be become much higher as economic growth will continue to crumble under their harsh grip. Total federal, state and local taxes now CONSUME 40 percent of GDP and this is climbing vertically as the predators REFUSE to cut spending like every rational business or person in the world is currently doing.
This is a fairy tale of borrowing and spending with no provision for private-sector economic and income growth other than projecting it to grow 3 to 4 percent. In fact, the public serpents plan to lay 2 trillion dollars of new taxes on the private sector in the next 5 years. Small private businesses are the target of these new and economically-devastating new levies.
That is no recipe for growth; it is a recipe for economic disaster. It is a perfect implementation of Saul Alinsky's "rules for radicals" and the cloward-piven.com strategy all rolled into one.
"The more corrupt the state, the more it legislates." - Tacitus
[snip]
Well this is just great. So what am I supposed to do while my stocks, bonds and cash dwindle to nothing in value?
It just occurred to me that it’s possible to get something for nothing, as long as you’ve got someone else who is going to get nothing for something.
I wish I knew. It's a serious question. Maybe some Freeper Investment Gurus will jump in and give us some advice. The threat is hyper-inflation, at least IMHO. Is it time to start buying real estate? Gold? Silver? Commodities?
“Gold? Silver? Commodities?”
Yes, and lead...
I would suggest a very small farm 10-20 acres with some water, learn to grow veggies, hopefully you can start this spring for this years harvest.
I'm assuming you are serious. Or at least series. And this could be hugh.
Is a nickel worth more that $.05?
What will you do when the government calls in the nickels?
Or do you think we will have steel nickels and steel pennies? (BTW, we had steel pennies in 1943. I have some.)
Oh, I’m serious. Did you know that $2000 of nickels weighs 430 pounds? It looks pretty impressive too. It is a source of endless amusement for anyone who sees it. And a nickel has a current melt value of 5.3 cents. Hard to steal significant quantities too. And no matter what happens, it will always be worth a nickel - you can spend it anytime.
This summed it up for me: I went into a nearby coin store just looking around and mentioned to the owner that I had a $10 roll of silver (pre-1964) quarters. Without a blink he said “I’ll give you a hundred bucks for it.” That’s what we’ve come to now, $10 in real money is worth $100 of the feds current monopoly money. And the worst is yet to come...
>And stop laughing at me.
I won't even start, but hope the others do. This is reminiscent of when I was laughed at for suggesting saving silver coins in 1964. Sold a bunch in the 1970s run up and ended up selling $52 face for $1,000+. Hoping for the same with the lowly 5c piece, which already has a melt value of .053 and we haven't even started to collapse yet.
If nickel keeps rising, watch for articles about the "shortage" of and the "hoarding" of nickels and how we need a new base metal for that coin. We'll soon have aluminum coinage like some other countries.
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