Posted on 07/11/2008 4:18:12 PM PDT by politicket
“Deflation is nasty but it can’t result in inflation. I’m really struggling with trying to decide where we are heading — net deflation or net inflation. But some very bright people are convinced that deflation is going to win.”
I believe you might be right...
Deflation might take place if the market is allowed to work...
The Fed won’t allow it...
The Fed will let the money presses hum...
Why does that read as if you plan on acquiescing in such a diabolical scheme?
The market will drop on the next trading day, but I think the panic would be greater if the takeover was announded on a weekday. Doing the change over the weekend should cause less of a panic, allowing investors more time to analyze the situation.
Personally, I'm in favor of 24/7 trading, but under the current system, this takeover was best announced on Friday after trading closed.
BWAHAHAHAHA!! i agree..... politicket sounds truthful, confident, and knowledgeable..... yet creepy, and end of times-ish all at the same time. HEHE!
Let’s face reality...
Gonna bite some in the butt.
Time to plant that rooftop garden?
It won't be easy...pulling off those solar panels. :(
I would think it would depend what kind of stocks you are in. If we see inflation and your money is in cash, your money becomes less valuable. If it is indirectly invested in hard commodities, it will probably keep up with inflation much better. I have stock in a gold mining company, a Canadian oil and gas trust, a timber REIT, and a coal partnership, for example.
OK, so things are turning to sh**. Creating panic doesn’t help them. Telling people all the banks are about to fail is a sure way to stir up panic withdrawals in a self-fulfilling prophesy of runs on the banks.
Golly gee willikers, I guess what I read in the New York Times is true.
Don't confuse private companies like Lehman with federally sponsored US Government corporations. There is an implicit guarantee that the US Gubmint, backed by their printing press, will not let a US Government sponsored corporation go out of business.***
***This applies only to the bond holders of FNMA and FHLMC. Not the common stock holders.
Probably a lot. Which is why it's VERY smart to diversify your funds offshore. Spread it around, and use the exchange rates to your favor.
Note that the Shanghai stock exchange has lost 50% THIS YEAR, yet the economy in China is still roaring along (and will continue to do so). Emerging markets either emerge and grow quick or slow, but the fundamental truth is they grow.
A collapse in the US will shut them down right quick, but I doubt we'll collapse. We'll probably sputter to a slower pace, and start deflating (a la Japan in the 90s). That will slow down China and India from blistering 10% paces to 5-6% paces, but that's still healthy when your own economy is doing -2% to 1%.
For the cost of a single round trip ticket to Hong Kong, you can be diversified in 10 currencies, and move your funds between them as needed. And access your funds from anywhere in the world.
I'm sorry, I don't think you've responded at all, unless you consider that a meaninful development of your assertions.
If I'm an imbecile, shouldn't you enlighten me?
I’d say the ‘immediate cause” was a major brokerage house downgrading the share price target from $1 to $0 after they determined there would be no shareholder equity left once writedowns were complete, despite their statement that they did not mean to imply that that meant the bank would become insolvent immediately.
Land: they don’t grow it any more.
I agree with you that land is the best investment in the long term and once in a while in the short term!
I live in the 'burbs, and do some vegetable gardening, but it wouldn't be nearly enough for survival mode, especially without water utilities.
IIRC, it was T. Jefferson that thought we'd be better off remaining an agrarian society, and George Patton who thought farmers make the best warriors. These were greats who knew their history.
In the event of an economic meltdown, I'd bet they look prophetic.
My mother's parents, who survived the Great Depression on a shoestring, worked incredibly hard on their gardening and canning, even late into their 80's. I think they knew history, too.
If we do suffer a great collapse, it will be a separation of the chaff from the wheat. Those with strong survival instinct, both good and evil, will survive.
Rural people, farmers, those who are tough and independent, who know how to defend themselves, and have prepared.
Just imagine how a Great Depression will play out now, with such a monstrous dependent class. Cities would be looted and burned to the ground.
Well, no -- the rub was stated very clearly by former Treasury Sec. John Snow via Bloomberg today. Fannie and Freddie were run like federally guaranteed hedge funds. Those cronies of Clinton should start getting grilled.
“”””But I am also reading quite a few articles form some seemingly bright financial people who are posing the serious possibility that net deflation and demand destruction is going to be unstoppable. Inflation should not exist if property values fall 60%, 25% of businesses close their doors, their is wholesale slaughter with bank failures, and if unemployment soars.
Deflation is nasty but it can’t result in inflation. I’m really struggling with trying to decide where we are heading — net deflation or net inflation. But some very bright people are convinced that deflation is going to win.””””
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Here’s the way some others that are equally bright are reading the inflation/deflation scenario.
In the global economy, the devaluation of the US$, which is 30% in the last several years, and some say has another 30% to go, down that is.......causes the other currencies to become stronger, especially now in resource rich countries that are stable, witness the Aussie $ and the Canada Loonie. The Euro is plenty stronger as well, but that will not last. So stronger currencies are able to buy goods cheaper than US citizens whose currency is devaluing, rapidly. Add to that growing economies such as China, Vietnam, India, Brazil, where oil and other goods are subsidized by the government. These subsidies cut the risk of “demand destruction” in those countries at the same time we have it here, witness gas consumption down on the order of 5% year over year here, but demand up worldwide. I believe the US will take a back seat in how much our economy drives the global economy. Then as the Fed and Congress issue more and more bailouts with funny money, the US$ devalues further and the cycle continues.
It is not a pretty picture. Add to that the $60 Trillion in unfunded SS and Medicare obligations and..........well......I see no way out of it.
” and George Patton who thought farmers make the best warriors.”
So did Oliver Cromwell...
What does political correctness have to do with bank failures? The banks weren’t forced to lend to anybody.
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