My top 10 reasons as to why a world depression will not occur

[Andrew_A]

Well I have mentioned that world finance scares me, but quoting articles like this does nothing about telling people how to profit, or protect their present positions. Also a lot of sites alerting us to all the fun and games going on normally have a vested interest in selling something, usually precious metals.

I read a wonderful article recently about the Roman gold denarius, it's declining gold content through the final years of the empire and lessons to be drawn from the Roman Empire and how it relates to the present US empire and the USD, at the end of the article which basically preached the dangers of fiat currency the recommendation was to buy T Bonds which was a bizarre suggestion considering the tone of the article until you worked out that the author was selling such investments for profit himself.

There were people on the other side of the billions lost by the Amaranth hedge fund collapse who were quite happy with the situation, just that they don't make the news.

If there is a country you want to be in at the moment I would say it's a politically secure country with heaps of resources in the ground, can you think of any nearby that fit that criteria? I look around at the moment and wonder if we have ever had it this good financially? Certainly there will be heaps of opportunity amidst any chaos as well, perhaps it's not an ideal era for the buy and hold non diversified investor coming up, but you won't really know till much later anyhow.

 

[gigigoodyear]

ooops...are we there yet???

You forgot about the big huge elephant sitting in our lounge room...the credit derivatives financial bubble.

This has to some extent already impacted global real estate and we can now see the bursting of this bubble in this area.

If you recall, Buffet called them "weapons of financial mass destruction" and he should know, he tried unwinding quite a few of them from some company he bought.

It is not a matter of if but WHEN it will implode taking the global banking and financial system with it!!! It just takes one hedge fund collapsing to get the ball rolling in the daisy chain and.....(can anyone spell depression???)

To Pitt St...I hate to say I told you so from a gloom and doomer. The credit derivatives explosions we are now seeing in US, Britain, France, Germany, Australia etc. are the start of something major in the seriously over leveraged financial markets.

 

[Andrew_A]

To Pitt St...I hate to say I told you so from a gloom and doomer. The credit derivatives explosions we are now seeing in US, Britain, France, Germany, Australia etc. are the start of something major in the seriously over leveraged financial markets.

Isn't it the case that a rain dancer will never fail if they just dance long enough?

Also it will only be obvious in hindsight whether it's a blip in an upwards trend we are in or the start of some bear market.. dunno.

How much to bet, where to bet it and with what plan gets you some real $$, otherwise it's all idle speculation.

 

[gigigoodyear]

Isn't it the case that a rain dancer will never fail if they just dance long enough?

Well informed people could see this coming a mile away and have shorted the market accordingly making billions. They just used their common sense. If only sheeple looked around them once in a while instead of gorging on the lush green grass.

Also it will only be obvious in hindsight whether it's a blip in an upwards trend we are in or the start of some bear market.. dunno.

How much to bet, where to bet it and with what plan gets you some real $$, otherwise it's all idle speculation.

Oh gee, it's all over the business news. US Fed and ECB desperately trying to reinflate and injecting billions of dollars in their markets. Here comes hyperinflation. Do you always make silly bets like this after the horse has bolted from the stables? Silly pumpkin!

 

[Sunfish]

You missed one Gigi. From CNN today:

LATIN AMERICAN MARKETS: Latin America Slides As U.S. Subprime Troubles Spread

And how anyone could think this cannot flow over into RE has got me beat. But you 'n me are just chicken littles. LOL

 

[Andrew_A]

Well informed people could see this coming a mile away and have shorted the market accordingly making billions. They just used their common sense. If only sheeple looked around them once in a while instead of gorging on the lush green grass.



Oh gee, it's all over the business news. US Fed and ECB desperately trying to reinflate and injecting billions of dollars in their markets. Here comes hyperinflation. Do you always make silly bets like this after the horse has bolted from the stables? Silly pumpkin!

All I'm saying is watch for the DOW to make new highs....

And when it will I will say... Told ya!

 

[gigigoodyear]

All I'm saying is watch for the DOW to make new highs....

And when it will I will say... Told ya!

Of course DOW will be making new highs in US dollars (but not in other currencies) if the US Fed is going to inject billions of $ to save the economy and hyperinflate. Even the Zimbabwe stockmarket is making new highs everyday after the government has pumped loads of money into the economy. Silly sausage!

 

[Andrew_A]

Of course DOW will be making new highs in US dollars (but not in other currencies) if the US Fed is going to inject billions of $ to save the economy and hyperinflate. Even the Zimbabwe stockmarket is making new highs everyday after the government has pumped loads of money into the economy. Silly sausage!

So what are well informed people investing in now?

 

[Andrew_A]

All I'm saying is watch for the DOW to make new highs....

And when it will I will say... Told ya!

The point I was trying to make being..

Such a statement has no value for an investor, what does it mean? Do you buy Dow stocks? How much would you buy and when would you sell? The falls might be drastic before the highs arrive. And... Highs will eventually arrive, just like rain arrives for the rain dancer.. Doesn't help you make money but might make you feel better!

And of course you will be vindicated if you predict major shocks in our financial system, I enjoy idle speculation too much as well, just that I consider to turn around and say 'Told ya!' to PS when they actually do is ... well a bit silly..

later

 

[BoatBoy]

So what are well informed people investing in now?

Look out mate, you'll be a silly watermelon next

Dave

 

[Andrew_A]

Look out mate, you'll be a silly watermelon next

Dave

I'm content with silly sausage.

On a completely unrelated matter.. My 5 yr old niece recently told me... I don't like mushrooms.. they are my least favourite fruit

 

[Sunfish]

So what are well informed people investing in now?

You could do a lot worse than precious metals. They are nobody else's debt obligation.

 

[gigigoodyear]

The point I was trying to make being..

Such a statement has no value for an investor, what does it mean? Do you buy Dow stocks? How much would you buy and when would you sell? The falls might be drastic before the highs arrive. And... Highs will eventually arrive, just like rain arrives for the rain dancer.. Doesn't help you make money but might make you feel better!

And of course you will be vindicated if you predict major shocks in our financial system, I enjoy idle speculation too much as well, just that I consider to turn around and say 'Told ya!' to PS when they actually do is ... well a bit silly..

later

It's not speculation, here are the facts and it is coming in fast from all parts of the globe if you keep abreast of the news. Here is the latest, Reserve Bank of Australia has just pumped $4.95 billion dollars to try to prop up the stockmarket (Alan Kohler report, ABC Business News). In other parts of the world, injections of cash are Europe (94.8 billion Euros), US ($24 billion), Japan (1 trillion yen), Canada (C$1.6 billion). Ooops, hyperinflation....can we now have a discussion on what will happen next with these big money injections rather than if the scenario is just speculation or not?

 

[Shirley]

(QUOTE: Reserve Bank of Australia has just pumped $4.95 billion dollars to try to prop up the stockmarket)

Can someone explain to me when the RB does this, where does the money actuall go? Do they buy shares? How do they prop up the market?

Thanks

From a Novice who knows very little about the stock market but a reasonable amount about the property market (at least in my own town)!

 

[gigigoodyear]

(QUOTE: Reserve Bank of Australia has just pumped $4.95 billion dollars to try to prop up the stockmarket)

Can someone explain to me when the RB does this, where does the money actuall go? Do they buy shares? How do they prop up the market?

Thanks

From a Novice who knows very little about the stock market but a reasonable amount about the property market (at least in my own town)!

Stocks have been sold off recently because (a) yen carry trade unwinding (b) hedge funds and other firms around the world need to raise cash quickly because of margin calls. The RBA may have bought or monetised the subprime debt of hedge funds in Australia (whom we may or may not know about) and reduced the need for these hedge funds to sell stocks to pay back margin calls. Of course, depending on how RBA releases the money and credit, they may not be able to control where this money will go to as investors may forsake the stockmarket and go into physical commodities and precious metals instead. I suggest continuing to troll the business news headlines to find out which investment class it may be going to.

 

[gigigoodyear]

Stocks have been sold off recently because (a) yen carry trade unwinding (b) hedge funds and other firms around the world need to raise cash quickly because of margin calls. The RBA may have bought or monetised the subprime debt of hedge funds in Australia (whom we may or may not know about) and reduced the need for these hedge funds to sell stocks to pay back margin calls. Of course, depending on how RBA releases the money and credit, they may not be able to control where this money will go to as investors may forsake the stockmarket and go into physical commodities and precious metals instead. I suggest continuing to troll the business news headlines to find out which investment class it may be going to.

oops...Margin calls should have been "redemptions" from investors.

 

[Andrew_A]

No depression yet!

Hmm.. Just read the title of this thread again..

And you have to say Pitt St is spot on so far.

Pity he has withdrawn himself from these paper fights to make money in the real world, doesn't know what he is missing I reckon

 

[gigigoodyear]

depression

Hmm.. Just read the title of this thread again..

And you have to say Pitt St is spot on so far.

Pity he has withdrawn himself from these paper fights to make money in the real world, doesn't know what he is missing I reckon

So if early indicators are telling you that the global economy may be heading towards a real slow down and credit crunch and then hyperinflation, you will just ignore it and wait until the middle of a hyperinflationary depression to take an investment position? Silly waterm...oh someone's used it already.

 

[gigigoodyear]

big kahuna

Dear CIGAs,

This is the BIG KAHUNA!!!

World Central Banks are admitting to a $300 billion liquidity injection, so it must be much higher. This type of injection over what has now been three days is so unprecedented that it is not because a few hedge funds have gone broke.

This is a full blown meltdown in OTC derivatives.

This is certain because of the worldwide liquidity injection by almost every major and some minor nations. That is also unprecedented.

This injection of liquidity will reverberate around the globe for years to come as inflationary and dollar damaging beyond your wildest imagination. This is so big that there has to be many financial institutions in big trouble.
http://www.jsmineset.com/home.asp

 

[Andrew_A]

Just how big is 300 BN compared to a derivatives market of half a quadrillion?

Better to admit you don't have any idea what those numbers actually mean in reality and invest anyway.

I've already taken my investment position. Long Australian residential property, with a small but highly leveraged and aggressive position in derivatives If you have hyperinflation you want to be as bigger debtor as you can manage, and if you have deflation you will have egg on your face.

Fess up... You know nothing... like me.. Actually it's a liberating thought once you embrace it. Everything is much clearer and makes more sense in hindsight.