Deflation isn’t the only type of depression…get ready!
Posted by MC on Sep 29, 2009
As we know, we did in fact almost have a proper (and IMO much needed) bear deflation period. It was SOOOO close. But as the US goes…so does the entire world economy more less. If we have a full deflationary depression so will the other countries. If some manage to show strength their exports will be too expensive and they’ll end up battered eventually. This is the power the Bretton Woods brought to our table here in the US. With essentially everything “pegged” to our currency we have absolute power. A power we have abused horribly. Or should I say the rich bankers coerced us to abuse? We are merely puppets on a string.
In our recent recession the US wealth AND foreign wealth stepped in heavy. Compared to recent pricing (TA wise) we were at a bargain prices on many things. I must ask though, FA wise can you stand behind the US and it’s balance sheet? I’ve never done a real balance sheet and I’d be interested to see what some come up with since I have no formal training. Bottom line for me is this…buying because you HAVE to is far different that buying because you WANT to.
Setting TA and FA aside, here’s the reason IMO why foreigners are buying shit up here. In part like we said…everything is “pegged” to the US and they don’t wanna crash along with us. But also with the newly flooded money supply practically EVERYTHING (staple of life wise) will shoot up in value. We have far more dollars chasing the same goods. They don’t want to have USD on hand, they want to have goods that people will buy with the USD. If you save now you are a fool. USD will be losing ground in terms of spending power. INVESTING is far different than saving on something lame like a CD or bank instrument. I know this…but how many others do?
FAR MORE DOLLARS!!!
As an example of buying because you HAVE to…
I am out of the tech loop since I was let go last year. I didn’t know Intel built a US campus. I bet Intel bought here in the US for a few big reasons…and IMO quality of labor is NOT one. Appreciation of the property would be a major reason I would assume. Also, they have an interest or stake in the fire. WE are the people buying their computer chips and if we collapse so does their market. Again, it’s out of necessity not desire IMO.
Inflation can and will continue to create and transfer MASSIVE amounts of paper wealth. The concern I have is the wealth flows from those that do all the work (middle class) into the hands of those that do nothing (wealthy). And what the middle class will eventually be left with will be worthless paper assets (401k, mutual funds etc…) I understand the biz are the ones taking risk and they need to profit, but after taxes etc… we are slaves to the system. We as consumers are so debt strapped we NEED these jobs and we NEED the pay rates to continue rising just to cover interest and inflated costs of living. Everybody is strapped with leveraged liabilities in the US and our nest eggs are trapped in fictional paper assets…that is a concern of EPIC proportions to me.
Are service jobs really worth $30+ an hour? I guess technically we could be paid $1,000 an hour and something like a loaf of bread could be $100. If they can continue to raise wages in pace with inflation then the bubble could grow and grow and grow in theory. Sure is becoming a slippery slope if ya ask me.
Please watch this video
Posted by MC on Sep 21, 2009
http://www.chrismartenson.com/sites/all/themes/cm/cm-crashcourse.php?height=560&width=760
GI Joe said it best…knowing if half the battle.
This is a GREAT video series I highly urge you to watch.
Local Hometown Hero
Posted by MC on Sep 11, 2009
[youtube]UOLa8uwBRD4[/youtube]
A hometown hero here in Buffalo, NY. Older story but it’s hits close to home because I know him and his brothers personally. This is a true American hero, not Paris Hilton or the other idiots that are so closely followed and worshiped. Wanna mold yourself after a true hero, here’s your man. He didn’t do anything a normal citizen couldn’t have done…BUT HE WAS THE ONE THAT ACTED! Cars were driving by and would have let this guy die. It’s a VERY fine line between hero and hethan. We can ALL be heroes to many people on many different levels if we just do the right thing.
Way to go Jeremy! 
Has housing showed us it’s hand???
Posted by MC on Sep 3, 2009
Go there! USE IT!
What you can do is type in a city or for our purposes a state. Now look at the left column and compare the # of houses sold (believe it shows the last 6 months) to the # that are currently on the market. Most big markets through the plummet up till about a year ago were 1 sold for every 3-4 on the market. Things have handily reversed. So overall you now have about 4 houses sold for every 1 that is on the market currently. If ya ask me, that would likely signal the bottom in housing has been solidified.
Could all that be 1st time buyers using Obama’s gift money? IMO no way…4:1 can’t be all brand new homeowners. Some of the lift may be from that, but either way the point is housing is turning and churning again big time. Who cares about why, this is America and people asking the most questions and flinching the most tend to be late to the party or get left behind entirely. Define your data and go with the data, not what your feeling.
Some will say interest rates will go up and that’s bad. Interest rates rising should make people on the sidelines ACT! They have been stalking for better rates and procrastinating for quite some time. If the rates go up they are VERY likely to act and stop bargain hunting IMO.
Just another tool in the shed so to speak. GL
