Invest in canned vegetables.
They could make you rich some day, if not you can always eat them.
I see a technical projection to 1900 on the S&P (roughly), and if history is any example, if it happens, it will happen mind bogglingly fast.
And the turn around will look like the one in March 09. Very Abrupt, and perhaps a lot more extreme.
Of course, if something goes wrong with the Fukushima operations in the near future (I'd rather not see it), that would likely change everything.
Exactly, the labor participation rate is the truth. And it hasn't moved in five years enough to speak of.
Here's my point of view.
The fact that the economy is still not self sustainable tells me something isn't working right with the plan, as it were.
I think we were closer to self sustaining as of last spring. What's happening, is the QE is choking the consumer at this point.
This is why I turned bearish this late spring, it's what I'm seeing in the real numbers.
Real numbers, like the actual labor participation rate, vs. the fake "jobs created". Or the real inflation rate (avg.%10 per year for five years, %15 this past year).
The FED doesn't see it, nor did they see the housing market bubble in recent history.
In a fractional reserve system, your deposits are utilized by the banks to generate profits, traditionally from lending (but less from lending and more from gambling these days).
This process "increases the money supply"....it multiplies the current supply of money.
Because credit demand from traditional sources (business start ups and individuals) has been low, the FED essentially fills the void with QE. In other words, the major source of credit demand right now is the government borrowing from the FED.
Most of the "money created" sits in reserves on banks balance sheets, so in theory, they can stand the "stress" of mass withdrawal of savings.
One thing that the media isn't talking about, is the chain of collaterization in which these reserves are being gambled with.
The banks show reserves on their balance sheets. They are also bundling their low or non performing "assets" into "securities", which they "flip" to the FED (borrow against), and gamble with the proceeds.
When they do this, it cleans up the balance sheet, as the junk part of their portfolios aren't showing up as junk, it's showing up as a security in reserve, not rated.
This is the derivative crisis that some are warning about, that few understand.
It's not so much of a hedge as it is trading two time frames.
When you see a pull back stalling out, and you just know it's going back up as usual, you get long for the short term.
The short position is counter trend. To trade counter trend, you go slow and easy. By the time the trend changes you're ready to profit handsomely.
Since we don't know when the trend will change, that time frame is not defined, but we know it's not the immediate time frame. Expect to take some losses on the way. But when it comes, especially if it is a big sudden move that sustains for a while, you'll be glad you kept a line on that side of the boat.
This is how I learned to position trade, it takes patience and planning. These are the types of levels where you want to start getting ready if you haven't already.
In the shorter time frame, the focus has to stay on the current trend...easier said than done if you're a skeptic like me, but it makes money.
We saw congress and the president back off of Syria....not because of Putin so much, but for the opinion poles showed something.
My opinion of the president would be so much greater, if he actually were to admit ACA needs to be completely redone, and suggests it's repeal.
Let a guy dream.
The same reason they don't talk about Fukushima as much as they should.
Something happened over here in the U.S.A. and I don't like what I'm seeing.
We need to take our country back.
Sorry, I meant "when you see a big red candle give up ground and leave a shadow...."
Buying after seeing this has been a very high percentage trade lately, 100% in the past few weeks.
I think it's likely, but let me give you some pointers here. I said this last summer as well.
The market could continue going up longer than we think it should. The only way to be ready for the turn around (that should but may never come) is to scale in to a position that can make you profits in the event that the market does turn down, without risking a large portion of you're trading funds.
While you build that position, be open to shorter term trades to the long side, when we see these down moves, and they run out of momentum, and you see the big red candle give up ground and leave a candle, make some money going long. Take some of that profit and get cheap insurance with at least 3 months in time value.
In the case of a dollar collapse, it's going to go "to the moon", and the way to win on that is with leverage.
And as far as being hypothetical, consider that QE will either end at some point or continue forever.
Those are the two possibilities.
So, those hypotheticals, are the possible outcomes.
OK, let's ask this
Where will the U.S.D. and stock markets be if we lose either one?
Or, what happens if we continue to borrow and print?
Sure, no one knows for certain, but there are some warning signs.
Unless history fails to repeat it'self, we're headed the wrong way.
Where would the U.S. dollar be without QE?
Where would the dollar be without reserve currency status?
Which is more important in the long run?
Surely, the stock market would give up a lot of ground if QE were to end. But the dollar would strengthen. Which in the long run is better than losing reserve currency status.
Without reserve currency status, the stock market would go parabolic, without returning any real gains, because what ever cashing in stocks now could buy in dollar terms, would be the same or less after the parabolic move.
I like to see the stock market "strong", but only when it's for real.
So for those of you who think I'm an idiot fear monger, try to understand, what I see when I look at the current approach we're taking.
This is not unprecedented, other than the magnitude....we're doing what others have done before, only on a massive scale, concerning debt and printing.
If you're truly bullish, and want to see long term prosperity in the U.S.A, you would understand that a period of deflation now would be better than to continue faking a good economy.
They know how to inflate bubbles. They don't know when to exit.
The "recovery" won't happen BECAUSE of QE at this point.
And btw, don't try telling me the economy is getting better, if it were, the FED would have started tapering by now.
5 years of the most aggressive QE in our history, with a debt that has tripled in that same time frame, and we haven't even gotten to a place where we don't need stimulus?
Stimulus has been the problem, not the answer, for some time now.
No, it indicates a lack of appetite for the debt. The interest rate I'm talking about is the real interest rate of the treasuries.
You're talking about the interest rate that will remain at -.25, the one the FED determines.
Probably the best question anyone could ask themselves right now.
When the economy is getting stronger, and you see rising interest rates, it means good things are on the horizon.
When interest rates rise in the face of a central bank that is desperately trying to keep them down, it's not a good thing.
It should be of concern that the FED is not yet willing to even cut back on QE, let alone stop cold turkey. Not that the FED has a stellar track record of recognizing when enough easy monetary policy is enough, because they clearly don't.
Rant aside, interest rates are coming up, and the FED is not easing. Not good.
The only way you can think the economy is much better now than it was in 2008 is if you delude yourself.
QE may have prevented an implosion of the banking system, for a while, and if your to believe the manipulated data with the new calculations, go ahead and bite right into it all.
The TBTF banks are in a deeper pile of shitbags now than they were then, if you don't believe me, just wait and see.
Don't be silly.
They would mandate one meal of beans daily is all.
Nothing too drastic.