I want to take this discussion to a WHOLE NEW LEVEL. It’s just sad that TB is withering and wilting. HELP me out here folks!

As a preface, derivatives are one of the biggest components of this exponential bubble…in fact they will probably be at the root of the demise of trading as we know it. The speed at which they have grown the money supply and shifted “wealth” is staggering. The extreme greed involved is likely to collapse this economy one day.

Anyhow, the topic at hand was where did that wealth go???
The big money cashed out on top which guaranteed the money supply from that vehicle would shrink. They took their profits and hold it in cash it would seem. Don’t believe for 1 second that their profit was lost…the big boys are too smart and controlling for that to happen. The game is rigged…flat out. That’s why everything is sinking…liquidation and removal of investments + profits, now leaving the rest of us with reduced profit, no profit or even losses putting us in the red. Anyone with a 401k can attest to the damages taking place.

There was a true reduction of money supply…but it wasn’t damaging to the real big players because they got out with massive profits. The damage as always is felt by the middle class and other working class citizens. We carry the load on our shoulders and suffer the losses so the fat cats can live lavish.

So I guess what I’m saying is “money supply” and profit are 2 different things. The markets money supply was greatly diminished but there was absolute profit taken and booked…in massive amounts. OIL, GOLD, SILVER, DOW…all had biiiiig profits at stake and all were liquidated. Big volume up high shows the profit was taken in droves. Think of a chart…big volume starting a bull and big volume ending it…what goes on in between is mostly retail and insignificant in relation to the big boys profit (though they do flip and keep the ball rolling). Ask yourself if you created the 2003 bottom and sold at the end of last year in MASSIVE amounts of volume…what would your profits be?

In fact I’ll go a step further…the bear market though driven by fundamental damage was triggered by liquidation popping the bull bubble. The selling of holdings for EXTREME profits is what essentially caused the bear. Bull markets start when massive amounts of money come into the market, and the bear market begins when that money is removed. The reason for removal with profit though is always a fundamental one if you think about it. They cause the markets to soar knocking things all out of wack valuation wise…THEY CREATE THE FUNDAMENTAL ISSUES. This ensures a constant cycle of boom and bust. They continue the cycle causing an exponential bubble as they re-invest base capital along with their big profits each time. Look at a lifetime DJI chart below. I prefer NON LOG because it really illustrates the exponential aspect to a greater degree.

It’s tough to grasp overall, especially because people in general don’t like to think about the markets as a ponzi scheme…but they essentially are, and a VERY lopsided one. One that we are told to count on to retire…and to invest in all throughout our careers. All along with the expectation it will continue to appreciate and make us rich by the time we retire. It’s up to people to learn about this stuff themselves and then trade/invest WITH the pros to ensure they don’t fall into the trap. Do NOT just dump into the 401k blindly and expect everything to work out allowing you retire worry free! After all it’s YOUR retirement not anybody elses…manage your nest egg accordingly.

…Random thought…
Deflation in relation to housing value is another can of worms. That artificially inflated portion of the money supply WAS lost. Still somehow the lending execs cashed out with handsome rewards…bastards.

…Back to the scheduled program…
Now the fact is they usually shift profit into hard assets after they liquidate in the paper markets. Here they seem to be liquidating EVERYTHING at the same time…which makes me wonder how big of an event this is going to be when all is said and done.

My main question is where is that profit going as the money doesn’t just evaporate. Did they raise the cash to pay their credit swap defaults (one thought as to why they need cash so badly). Who benefits by that exchange if it is in fact where the cash is going. And again were is that money going in the end, and when? When and where they put that money will be the next boom. Look for signs of their re-investing and follow their lead. This is a GREAT time to be looking for a new turning point in the markets, if you know what to look for.

From:

http://www.tradersbase.com/forum/trading-psychology-money-management/814-where-did-all-wealth-go.html

Please feel free to sign up and discuss this further with me.

Kind of an interesting view. On a lifetime yearly chart the last monster bull run didn’t even flinch, nor did it retrace even to 50% on the Y2K “crash”. I guess the question is how do fundamentals make this exponential market rise look? IS the market overbought up here, or is there still room for growth after such a big long run? We did break the range and have tested the prior swing level, though we aren’t even half way through the year so the test means little till it’s closed.

Another thought that made me LOL was the consolidation from 1965 through about 1983. All this talk of the market returns x% per year. And the 401k hype that you put in x% of your check and you’ll retire a millionaire. Who the hell are they fooling…well how about most of working class America. I mean of course it all depends on where you began investing, and where you cash out, and everything in between. But the pipe dream of the market always giving gains is anything but a guarantee, there’s a 20 year span that might not have done much for your nest egg. Ask those that tried to retire after the Y2K started it’s down move. How many put off retirement cause they were down so far that the simply couldn’t afford to retire at that point.

How many ran and sold in ‘87? That looks like not even a blip on this view of the market. The market is bigger than most of us think about, myself included. All it takes is a gander at something like this chart to really make you think about your daytrades or even swing trades. We get excited on some of these 50 point gaps, but in the bigger picture its a tick. You can do this on ANY timeframe, and this is why it’s important to roll back and look at the bigger picture. All good traders seem to use multiple time frames, and this is partially why. This is the equivalent of living on the ground all your life, and you finally take a plane ride and see things from 10,000 feet. You realize how small a speck you and your house is, and how little your life means in the grand scheme.

Enough of my ramblings, just wanted to provoke some thoughts and discussions.

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