Post: #101

You are in Finland?

Well you are not using the Euro if I remember correctly. So that is good.

Also, I am not sure how big your soverign fund/reserves are. I think Denmark is the one with the all that crazy oil income (well before recent prices). I think it depends on how strong your country is doing and if it is swimming in debt.

I think it is very hard to predict these outcomes. I know that is not the ideal piece of news.

Best is to stack cash and manage your expenses.

In crisis, you can find a way to survive. People have been doing it forever. I don't mean that in a flip way. I just mean, people can find a way to survive any tough situation. Not having debt is a good thing. If you have cash, you may be able to buy shit cheap as people sell stuff to raise cash.

Post: #102

Inflation and deflation hedge with nickel coins

One idea that I have seen recommended over the last few years, was to have some rolls of nickels stored away. The idea is that in a deflation, the nickels will retain the face value of $0.05 USD, no matter how low the value of the metal content in the coins go. On the other hand, the metal content is about near or above the face value of the coin, so in hyperinflation, the coins would retain their purchasing power. The idea was to have a small amount of them (like maybe $100 USD worth) so that in an emergency with deflation or inflation, you would have something so you would not starve.

Here is where you can check the value of the metal content of coins:
http://www.coinflation.com/
This lists the metal value of US coins. Until recently, the US nickel metal coin value was above the face value of the coin.

Post: #103

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Post: #104

(09-02-2015 03:01 PM)EvanWilson Wrote:  Inflation and deflation hedge with nickel coins

One idea that I have seen recommended over the last few years, was to have some rolls of nickels stored away. The idea is that in a deflation, the nickels will retain the face value of $0.05 USD, no matter how low the value of the metal content in the coins go. On the other hand, the metal content is about near or above the face value of the coin, so in hyperinflation, the coins would retain their purchasing power. The idea was to have a small amount of them (like maybe $100 USD worth) so that in an emergency with deflation or inflation, you would have something so you would not starve.

Here is where you can check the value of the metal content of coins:
http://www.coinflation.com/
This lists the metal value of US coins. Until recently, the US nickel metal coin value was above the face value of the coin.

Only works in an inflationary environment since the market value of the metal is greater than the face value.

In a deflationary environment, the face value of a nickel would be greater than the market value of the metal contained therein.

Post: #105

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Post: #106

(09-14-2015 04:23 PM)Dan Woolf Wrote:  I have a bad feeling about this. Chinese dropped -2,67% again.

I'm going to the store tomorrow to stock up for a month.

Some paper wealth will vanish, but there won't be a Mad Max scenario. And if there is, you'd better stock up for a few decades/centuries.

Post: #107

If the Fed is stupid enough to raise rates this year, then watch out.

Expect a big drop in the stock market, followed by a recession.

Post: #108

(09-14-2015 06:43 PM)Easy E Wrote:  If the Fed is stupid enough to raise rates this year, then watch out.

Expect a big drop in the stock market, followed by a recession.

Current surveys of business economists tell us that less than a third think there will be a rate hike this week.

But despite recent negativity - lower manufacturing output and lower consumer confidence and weak jobs report (not to add hectoring from the IMF and World Bank "Don't do It!") - my sneaky suspicions are that the Fed will do their long delayed one-quarter point rate hike.

Why? Reports are that the FOMC has been closely divided; secondly, I suspect that some will think the consequences of a rate hike are already priced in by the market" (and it's 'yes' and 'no' of course - the issue is how strong is this mixture?); and finally, I think that the Fed will decide that their credibility is on the line.

In other words, the US is still the strongest economy in the world right now. India (and another country? I forget...oh, UK!), have been hiking rates. If the US Fed can't now, then it puts their longer-term judgement to shame, since they've been making noises of this for about a year, and nothing has happed that's signalled 'recession,' except a lot of other things in the world economy.

The August pull-back was clearly all about China's economy, its opaqueness, and the need to reprice the risk there because of obvious commodities markets weakness: China simply cannot be said to be strong with continuing declining prices in commods!

What scares me more than a USD interest rate hike is that GDP forecasts of China have gone from 7% this year to only 6.8%. That's just optimistic, methinks.

My suspicisions - based on nothing more than peanut gallery observations - is that the rate hike is coming this weak to steer a moderate course towards a very gentle re-normalization of interest rates. The next hike then might come next spring - or summer, given the history of 1st qtr plummeting in US GDP.

To answer Easy E, if that's all it takes to tank the US - one minor raise of one-quarter percent - then the US was already headed into recession. And the FOMC is gonna look hard at the data, and say that that isn't observable in the available data.

In other words, I'm thinking that the turnaround by bus econs last month - to spin towards no rate hike in September - was too transitory to be meaningful. These herds don't know.

If so, then the dollar will stay on course for Euro parity this winter (or spring, Feb-Mar), and then there will also be more pain coming for emerging market nations, whose repayments in US dollars are linked to the interest rate.

And thus, there will be some more downside for EMs this winter, until a turnaround. But likelwise, this will be good news for India and the UK, taking off pressure for them to keep raising their rates. A rate rise for the dollar will be anti-inflationary and beneficial for these uptrending markets, too.

Just my 2 cents.

Post: #109

Everyone is saying got out, or bought the dip now waiting.

Anyone having a strong opinion and some reasons on what the SP500 will be at on New Year's Day?

Post: #110

(09-14-2015 07:26 PM)Travesty Wrote:  Everyone is saying got out, or bought the dip now waiting.

Anyone having a strong opinion and some reasons on what the SP500 will be at on New Year's Day?

If there is a rate hike this week, the action will be choppy the rest of the year. Like last year, there may be a run up in the market in November, followed by a choppy sell off in December until earnings season and reality test results come in.

But it all depends on data like earnings and perceptions forward into the new year. Will there be greater economic optimism for Winter and Spring? Or Not?

There are so many structural problems withthe US economiy now, I'm thinking that positive trends may well show up in some EMs (but not the most battered ones like Brazil) before they do in the US. Maybe Mexico or Russia will be better?

Post: #111

Orson, keep the powder dry or bet in advance of the fed? Curious what your plan is. Thanks.

Post: #112

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Post: #113

This is the Titanic.

http://carlicahn.com/

Click past the agreement 15 minute clip with his thoughts.

This feels exactly like 2008, without the innocence and the stakes are much higher.

Post: #114

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Post: #115

(10-18-2015 10:59 AM)Dan Woolf Wrote:  Any updates?

Much to my disappointment, it seems that irrationality was able to be maintained for now.

The next big event coming is the debt ceiling when in November the federal government runs out of cash. We have another old thread for that buried somewhere

Post: #116

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Post: #117

I cashed out at the start of this year and looking to re-enter the stock market. Historically strong gains follow in a year that declines 25% (with exception of Great Depression). Is this a cyclical correction or something more serious?

Post: #118

(10-18-2015 11:08 AM)The Beast1 Wrote:  

(10-18-2015 10:59 AM)Dan Woolf Wrote:  Any updates?

Much to my disappointment, it seems that irrationality was able to be maintained for now.

The next big event coming is the debt ceiling when in November the federal government runs out of cash. We have another old thread for that buried somewhere

On top of which, there's also the Oct 26/27 meeting of the FOMC to decide whether to raise the Fed Funds Rate (virtual certainty that they will not), as well as the possibility of a US government shutdown in November, plus another FOMC meeting in December. A lot of major milestones are coming up in the next few months.

Post: #119

There's going to be another US government shutdown like the last time? You could forgive these morons for forgetting such an event happened 10-15 years ago but it wasn't even two years ago!!

Post: #120

My plan right now is to short oil (because of impending recession and Iran oil reentering the market), and go long on the USD (which usually spike during emerging market recessions) as well as VIX (as a hedge on the instance that the Fed hikes before New Year's Eve, as well as the possibility of another debt ceiling/government shutdown crisis.)

As for the when the Fed will actually do liftoff, think of it this way:

Goldman Sachs (which at this point basically is the Federal Reserve) says no hike until March 2016. The first rule of this 'recovery' is that what GS wants, GS gets.
By March 2016, the Fed won't hike because it'll be election time - no way the globalists will undermine Hillary's coronation by deliberately imploding Wall Street.
By November 2016, the US will be in a recession - and the question will be one of NIRP or QE∞.

Extend and pretend all the way down.

Post: #121

(10-18-2015 04:33 PM)Foolsgo1d Wrote:  There's going to be another US government shutdown like the last time? You could forgive these morons for forgetting such an event happened 10-15 years ago but it wasn't even two years ago!!

Probably not.

The spending agreement actually ran out Oct 1st, but what happened behind the scenes is that a deal was made for Boehner to resign as speaker of the conservatives in congress would keep the government open.

Boehner's still there now so anything could happen.

Post: #122

I'm not affected by the stock market because I'm in an investment group that makes money. They started out with £100 and turned it into £1000 in one year and now they've got £21,000 in their account. It provides much higher interest than a savings account. If enough people put their money into the investment society, everyone in it will be well off. The group pays more money in trading fees than they do in losses because the person who runs it is a professional. It's best to join if you have lots of money but anyone can join it.

China is becoming a superpower because they keep buying loads of US currency and selling it for a cheap price, undercutting it, so that the richest country in the world loses money, and there's nothing they can do about it. Also China has much lower debts.

Because the government keeps printing more money devaluing the currency so people's spending power is less, the minimum wage is much less than what it was in the 1960s, so people can't spend as much, so the economy does worse. The reason why the government keeps printing more money which is thievery, is to pay off debts and inconspicuously increase taxes without people noticing as the percentage you pay stays the same.

Quote:Question: Why do we have inflation?
OK, so the cost of living keeps going up, and then your employer will give you a pay rise every so often to keep up with the cost of living. Why do they do that? Why not just leave all the prices as they are, then leave wages as they are?

Answer
Because the banks are releasing more money into circulation than they should. And then there is very well concealed reason behind it and that is to increase taxes without people complaining. Money that are issued as a loan by banks for example actually have no real value when issued. Only way the money can get a real value is if they are covered by actual work. So people have to work to pay them back and create the value of money that they borrowed. But when banks inject money into market that are not covered, suddenly people have higher buying power with no work behind them. And if the people have higher buying power with no effort at all, suppliers must counter this by increasing their prices so they make the same amount of money than before. Else they would not be profitable And thus inflation is born.

And then there is the tax issue with inflation. If you get raise of 20% by inflation the problem that arises with this raise is the fact that you actually have same amount of money as before the inflation, but the tax base increases. So let's say your standard payout is 100$ for ease of our math. If you the say the tax was 20% then you would pay 20$ tax. Now imagine you get raise because we have inflation. The raise is 30%. So you now make 130$. But the income tax you pay now is 26$. Some people may now say that the tax is the same as before. That is true, but all prices rise because of inflation and in the end you have marginaly less buying power than before. It is so small difference that you won't even notice. But add 30 years to that and the difference will show. But then it will be too late.

https://answers.yahoo.com/question/index...406AAOeI3g

So if people's spending power is less and more of their money is going to the government, that's less money for corporations. The private sector creates wealth and the public sector destroys wealth, and they're destroying more wealth every day. The only reason why the rich is getting "richer" is because they're stealing market share from the middle class.

When the industrial revolution happened, billions of poor people were lifted out of poverty thanks to trains and cars to get to work, advances in agriculture and computer technology. People got rich due to innovation and people collectively increasing their intelligence. Now what we're seeing is a new type of capitalism where money is shifted from the poor and middle class to the rich.

In the 90s Kodak was the biggest technology company with hundreds of employees, but now Instagram gets acquired for 1 billion despite having 13 employees.
In the 90s people brought music and record labels would pay bands to go on tour as sales were so high, but now we have Spotify which pays people hardly anything giving all music for $10 a month.
America used to have hundreds of media companies on tv, radio and magazines, but now it's just six.

I'm questioning whether this news matters as the successful traders will still be successful traders and the rich will still be rich. Same shit different day.

What we're seeing is the end stages of capitalism, where it's like crabs in a bucket, they pull the other one down when one tries to escape, that type of cannibalism. The rich know all this, that this growth cannot realistically go on forever but they're trying to prolong it for as long as they can by cutting wages, jobs, work conditions while snapping up smaller companies buying them out and expanding into new markets with aggressive marketing campaigns.

Post: #123

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Post: #124

(11-30-2015 05:41 AM)Dan Woolf Wrote:  So, they are saying that the euro might collapse in the next few weeks. What should I do with my cash savings that are in euros?

That obviously depends whether you believe what "they" are saying. If you do believe it, then you should obviously cash out your Euro position. You can do that either the old fashioned way by going to a currency exchange and buying physical USD or by opening up an account with a forex broker and going short Euro. With the latter option, you will be getting a far better spread and will not be paying commission. Furthermore, if you're so confident that the Euro is going to collapse within a matter of weeks, you can leverage up 100x and become a millionaire when the "collapse" occurs.

Now, is the Euro actually going to collapse in the next few weeks? Nobody knows, least of all those who would go out of their way to tell you. The safe answer though is "no."

Post: #125

(11-30-2015 05:41 AM)Dan Woolf Wrote:  So, they are saying that the euro might collapse in the next few weeks. What should I do with my cash savings that are in euros?

You could open an account with xe.com and convert your EURs to USDs. That would be a cheap way of safely protecting your wealth.

Or you could open a FOREX account and short the euro.

However, i'm more curious where you heard about this information. Can you shed some light on this position?