By: mentawaisurf
11/11/2009
11:26 am Yahoo! Profile:
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2008 is not the same as 2010 will be. I agree absolutely lasty. It will be much worse.
Most the world's outstanding debt is denominated in USD. It will need to be either paid back or defaulted on during the great unwinding to come. Commodities are priced in USD, so a stronger greenback makes them more expensive when translated into other currencies. The carry trade unwind will see a surging USD that will cause a crash in commodities. This rush back to the USD will see all asset bubbles burst around the world. This is deflation. |
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By: lasty49
11/11/2009
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No no no.
it's priced in USD not necessarily traded in.
Thats the sophistication of today's market.
Yes there is USD debt of which a large sum is owned by foreign investors.
The question remains will it be a debt swap for assets.
Ask yourself a simple question why invest and repatrate foreign debt when the country is on it's last legs.
2008 is not the same as 2010 will be. |
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By: glh40
11/11/2009
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I found this comment Interesting from the Indian finance minister this week after they purchased of 200T of the Shiny stuff.
As he swapped his country’s dollars for hard assets, India’s finance minister was blunt: The economies of the U.S. and Europe have “collapsed.” India was doing what it could to prepare for the coming meltdown....whoa... have you purchased your shiny for the coming meltdown ?? as talked about by those in the know...IMF gave GOLD for the coming Meltdown ..I've spelt it out for you ...you have No excuse now ;) |
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By: firefly_au
10/11/2009
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Hi All :)
I read an article in the Fin Review at lunch today that you may find interesting!
It seems the J_a_p_anese are now the largest investors in US treasury Bonds. The reason stated was that the US government is judged to be in between a rock and a hard place and has to face the same of deflation that has gripped J_a_pan for more than a decade.
It seems when this occurred equities and property returned -ve 64% and treasury bonds returned +ve 90% for that decade. This is why they are now buying the bonds.
Interesting, if deflation takes hold treasury bonds look to be the goods it seems.
BYE :) |
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By: glh40
10/11/2009
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>>> I don't think we'll have to wait too much longer now...<<<your right there menta ;)
The trap door is about to be OPENED UP WIDE on the US Dollar as G20 are nothing but PAPER Tigers... IMF have agreed to debauch the Greenback further...the dollar carry trade, i.e. Wall Street, got the green light from the Fed ....So expect WWide Devaluations they will come all of a sudden and will Shock you...The Weimar Republic went to infinity and their Currency went to ZERO (winners got a whole LOT of NOTHING)...as I mentioned previously a New high in Gold would be attained by the middle of this month ...Done
The pride and the arrogance of these bankers will be their undoing ....nothing left but DEBT |
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By: mentawaisurf
10/11/2009
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| Time will tell Jade. And I don't think we'll have to wait too much longer now... |
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By: jadeshangrila
10/11/2009
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The only thing going for the USD is that it is the bench mark currency where things are traded in. It is a currency supported by debt where people owe USD for assets bought in USD- crude oil, debt papers, nickel etc. That is why when there is deleveraging the USD goes up in value as individuals are force to buy USD to pay off their debt and it comes down in value when the reverse happens. In the last GFC American hedge funds were forced to sell their foreign stock holdings to pay off their debt in USD making it surge in value.
How much more foreign assets is left to sell is a good question as well if a nother crisis emerges? It's demand is not supported by it's export due to it's lingering deficit. With the decoupling of the Asian economies due to increase in domestic demand in those countries and countries seeking for a new bench mark currency, the value of the USD is under treat. |
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By: mentawaisurf
10/11/2009
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Yes Jade, the USD has become the key for all asset classes. Only there is no equilibrium here with virtually everyone betting on inflation and a collapse of the dollar. With practically all investors on the same side of the boat (ie. trillions borrowed to short the dollar and invest in assets all over the world) as the trade becomes too crowded the boat almost capsizes, so everyone will run to the other side of the boat. All the asset bubbles will then crash as the carry-trade unravels and the USD surges. This is deflation.
Let's not forget: when everyone is thinking the same, no one is thinking. |
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By: jadeshangrila
10/11/2009
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| Menta, when the unwinding happens American dollar will just collapse under a whole lot of treasury dumping as America get further into debt. While this is on the way expect wild swings in the markets- stocks, commodities and money of course. The economy is trying to get into equilibrium with debt and money on one side stocks and other assets on the other. |
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By: mentawaisurf
10/11/2009
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Hi Jade, it's true that our share market has already priced in a strong V-shaped recovery that would keep our commodities in demand. Now that's a bold bet. As Roubini said, "the US dollar will suddenly reverse, bursting this bubble in the biggest coordinated asset bust ever".
The bigger the bubble grows, the harder the market will fall. This great unwinding from the mother-of-all carry trades will hit Australia (shares, commodities and our dollar) harder than any other country. |
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By: jadeshangrila
10/11/2009
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| Menta, social economic mood of society is manipulated by government, so you can expect the governments of the world to try it's best to steer the global economy out of recession, which ever method possible. More bears trap and shot today. That's the social mood for the day. It's just man made money and all can be created and manipulated as necessary for the well being of the economy. When oil and resources run out and there is no alternatives, should we worry. |
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By: mentawaisurf
10/11/2009
11:42 am Yahoo! Profile:
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A prelude of the changing social mood;
World revolts against capitalism
http://money.ninemsn.com.au/article.aspx?id=928712
"The financial system is not bound by laws of supply and demand in the same way as industrial economies. In finance, fear and confidence rule decisions." When those emotions turn, so does the entire order;
http://www.elliottwave.com/freeupdates/archives/20 09/11/09/Hello-Optimism-We-ve-Been-Waiting.aspx |
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By: jaymarcel
10/11/2009
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| Keep it up ang I enjoyed the link, also its the first finacially (part) factual show I've managed to get the girlfriend to watch. |
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By: ang101000
9/11/2009
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...and I still can't spell or type :) currant=current
Given that I am wearing a suit and work for one of the big corporations, what you expect from me?
Strictly corporate-mainstream stuff that I am paid to push (: |
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By: mentawaisurf
9/11/2009
4:36 pm Yahoo! Profile:
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China opens casino - everyone bets on black!
China's dotcom bust to come...
http://au.biz.yahoo.com/091108/33/29mmn.html |
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By: mentawaisurf
9/11/2009
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| Not too much of the mainstream pls Ang. After all it's the mainstream that has led (and is leading) people astray :) |
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By: ang101000
9/11/2009
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Thank you Menta for watching the (some) of the movies and not calling me a crackpot. I hope you didn't miss the problems with the currant monetary system and money creation (Part I and II). Although it is a bit 'different' presentation of the system, I think, it does have some interesting points.
Well, I will try to stay mainstream and post 'ordinary' links from now on. |
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By: mentawaisurf
9/11/2009
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| Very interesting Ang. Peter Joseph's interviews about Zeitgeist supports the social behavioural field of socionomics. After decades of a great optimism (expressed clearly by the great bull market in credit and therefore assets), the collective mood of the herd is changing. That is why this current turning point is so momentous and why deflation is so rare. |
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By: almurrie1@y7mail.com
9/11/2009
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I mentioned in the past that this whole debacle was engineered to eliminate any banks that were outside the Reserve Banking umbrella. ie private banks and upstart credit unions/ mutual funds that had become banks. Looks like they are succeeding with hundreds of US banks going belly up, so the flawed Reserve Banking System is here to stay.
I would say Prime Minister Brown's days are numbered now he is supporting a Tobin tax on all bank transactions. Banks made accountable! How dare he.
It would eliminate the shenanigans that occur with currency etc trades overnight.
Not much point in making 1% if it all goes in a 1% transaction tax.
I would support this and it should stop the insane volatilty in the markets. No more rush to BUY BUY BUY, and the SELL SELL SELL by anyone, if it means that of the 1.1% profit, 1% goes in tax!
Al |
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By: ang101000
9/11/2009
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Menta,
don't be so sure that next time it will be different. There is no will and no incentive to change. Watch the video that I have posted the link to on Keens prediction this morning.
We are incapable for drastic change, we are conditioned to follow the norms, traditions and social institutions. |
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By: mentawaisurf
9/11/2009
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| Hi Ang, amid the struggling economy and a cascade of defaults on loans it will indeed be a matter of survival. Only now the too big to fall institutions are even bigger and carry even more risk than before. And next time they need a taxpayer bailout it won't come easy or quick enough for all to be saved (as mentioned previously on the Greed post). |
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By: ang101000
9/11/2009
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Menta,
The 'small' banks can't compete with the big ones and are being taken over or shut down. Is is called 'economics of scale' and 'market power consolidation' or if you prefer banking Darvinism - the survival of the fittest. Isn't that what free market is all about? It is perverse given that taxpayers saved the Too Big To Fall institutions. |
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By: ang101000
9/11/2009
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Menta,
The 'small' banks can't compete with the big ones and are being taken over or shut down. Is is called 'economics of scale' and 'market power consolidation' at work or if you prefer banking Darvinism - the survival of the fittest. Isn't that what free market is all about? It is ironic given that taxpayers saved the Too Big To Fall banks. |
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By: mentawaisurf
9/11/2009
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Regulators shut banks in 5 states; marks 120 US bank failures this year
Friday November 6, 2009
Regulators on Friday shut banks in Georgia, Michigan, Minnesota, Missouri, and California, bringing the number of bank failures this year to 120 amid the struggling economy and a cascade of defaults on loans.
The 120 failures this year compare with 25 last year and three in 2007.
http://finance.yahoo.com/news/Banks-in-Ga-Mich-Min n-Mo-apf-3282864371.html?x=0&sec=topStories&pos=1& asset=&ccode=
I thought the worst was over and that the banking crisis was last years news? |
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By: lasty49
9/11/2009
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Follow the trend folks.
Unemployment in the US wasnt good yet the Markets finished higher.
That doesnt indicate to me that the market is long.
Lots of top pickers and stop outs.
Prechters can call the US dollar higher but yields are against him.
Until there is a valid reason to change the trend remains intact. |
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