Financial topics

[wvbill]

I know I keep saying this, but the insanity keeps getting worse every
day. How can these people be more insane every day than they were
the day before?

John

They are unable to think beyond their horizon, as GD points out.

It certainly is amazing... You really have to keep your head on straight to not get caught up in the herd mentality...

I agree with Gerald Celente. This game is getting so perverse that the guy on the street is beginning to figure it out. Soon he will rebel.

Just glanced at CNBC -- I always have it muted, can't stand to listen to them -- they flashed: "59% of population feel 2010 will be better than 2009." It's hard for me to believe that number. I think they must know down deep its only wishful thinking. Soon reality will sink in.

Everyone is thinking as if March was the bottom. They, then conclude that things must get better... A big shock is coming...

Bill

[gerald]

I know I keep saying this, but the insanity keeps getting worse every
day. How can these people be more insane every day than they were
the day before?

John

They are unable to think beyond their horizon, as GD points out.

It certainly is amazing... You really have to keep your head on straight to not get caught up in the herd mentality...

I agree with Gerald Celente. This game is getting so perverse that the guy on the street is beginning to figure it out. Soon he will rebel.

Just glanced at CNBC -- I always have it muted, can't stand to listen to them -- they flashed: "59% of population feel 2010 will be better than 2009." It's hard for me to believe that number. I think they must know down deep its only wishful thinking. Soon reality will sink in.

Everyone is thinking as if March was the bottom. They, then conclude that things must get better... A big shock is coming...

Bill

From a different perspective, and yes this may sound way out, but if you think about what is going on, I guess it makes about as much sense as anything else.

And John, I think you said, or words to the effect, watching the CNBC is like watching loony toons, well things may get even loonier, IF there is ANY truth to the following. I hope not.

The following is gleaned from a Half Past Human report, dated 12/5/09--58 pages


Half Past Human in general looks for trends in the collective conscious.
They theorise that human society is interconnected at a higher level and to the universe, and that there is a bleed through of this into the Internet data ( word ) traffic ( across different languages). Specific explanation of data gathering and analysis is not given since it is proprietary.
They state the work is based on data accumulation, analysis, and interpretation , which they admit is open to question and various forms of interpretation.
They also state that these forecasts are not prophecies or predictions, since, knowledge of potential events can lead to their fruition, alteration, or prevention. They claim no accuracy and suggest that a reader who is faint of heart should not read the report, they also state that humanity has a propensity to believe what is printed, because it is printed, regardless of validity. Humanity also has a greater tendency to believe the negative.

Having tried to qualify the "comments" in the report I shall mention only a few which may have an influence on finance. Also realize this is MY simplistic stating /and /or understanding of some of their comments, and should NOT be taken as their in depth comments. The following is generally for the years 2010 and 2011.

It is probably also wise to consider the following as STRICTLY entertainment.

Some background information --

global gathering of transmitted data -- for military use
http://en.wikipedia.org/wiki/Echelon_(s ... elligence)


magnetism -- and its effect on plants
http://www.buzzle.com/articles/the-effe ... rowth.html

collective conscious
http://www.consciousape.com/discussion- ... key-phenom

Therefore the following--

Dwindling food crops will occur globally, as the extremes of weather/climate make them selves felt, influenced by solar and magnetic changes.

There will be a decay in global markets with huge impacts on social order ( China for example ) And another global financial crisis in March. The financial and central banking areas will continue to get more chaotic and dysfunctional as the year progresses ( caused buy systemic rot in the financial system, (caused by human activity) these events will be exacerbated by extreme weather episodes (natural non human influenced by some fundamental change in the solar system)

The above leading to possible riots due to hunger and shortages of edible commodities escalating to irrational behavior against those in authority. And the largely ineffectual responses of central governments.

In the USA, a sudden wave of poverty occurs as wealth is destroyed by the above, causing a collapse of entitlement and pension programs, this leads to unpleasantness at the federal level.

A new electrics will make is way into public awareness and the realization that universities have been producing a false education.

A global transformation and paradigm shift in understanding of what we are and our relation to the larger non terrestrial environment.

There is much more in their report, but the above is provided as material for a "mind game" of "what if"
for your amusement,. --- I have not mentioned some of the nasty stuff.

[jwfid]

Hi everyone,

Although Sprott Asset Management is probably recommending gold, I think this paper they wrote is super scary if true:
http://www.zerohedge.com/article/sprott ... naccounted

Joe

[gerald]

Hi everyone,

Although Sprott Asset Management is probably recommending gold, I think this paper they wrote is super scary if true:
http://www.zerohedge.com/article/sprott ... naccounted

Joe

Just for a laugh, in the Half Past Human report (mentioned in my above comments) they talk about a scam involving gold plated Tungsten bars sold as solid gold.

[wvbill]

Just for a laugh, in the Half Past Human report (mentioned in my above comments) they talk about a scam involving gold plated Tungsten bars sold as solid gold.

I can't remember where, but in the last week, I have read more then one commentator saying that there may be fake gold bars out there...

Why not, everything "out there" is a scam these days. If/when all the scams and corruption get eliminated (after the collapse) what will be left?

Sooo much has to change... Its why I believe there must be a collapse of gigantic magnitude.

Bill

[mannfm11]

Jlak, the monetary base stuff is laughable. There is $55 trillion, give or take a few trillion in debt in the US alone. The entire GDP of the US was maybe $300 billion in 1929 for one. Second, what so many keep talking about in monetary base means absolutely nothing other than the banking system needed some liquidity, as they couldn't sell a damn thing to pay each other. The first $1 trillion that is supposed to be there has been gone for years to Russia and Mexico in the form of currency in the matress. The truth they won't tell you is the money and banking everyone including myself took in college is a bunch of nonsense and means nothing. The banking system owes about every dime of that monetary base you mention and the real base is maybe 1/2 of what is reported on the books of the Fed. The S&P 500 is 150% of the 1929 top right now and the debt burden in the US private sector is about double 1929. Steve Keen, in an interview with Max Keiser, makes it clear that to expand the money supply the 10 times everyone seems to think is automatic would have to expand the debt basse that much more. Can you think of $9 billion in good loans to be made out there? And if so, what $9 trillion that could be paid at this time won't be paid as a result. When it is all looked at in the realm that all the cash that was the Fed liabilities hasn't been in the banks for years, you will realize there are no reserves.

John, I have been trying to follow a guy named Michael Hudson I found on Steve Keens site. Upon the death of Paul Samuelson, Krugman and he got into a spat over a paper Hudson wrote in 1970 upon Samuelson winning the Nobel Prize. Hudson pretty much said that giving a Nobel Prize for Economics was a justification of the rent class policies of the past 40 years and that economics as practiced in the modern sense is not based on empirical observations, but instead on assumptions. In this article he mentions a book that I believe will expand on the tenents of "The Bubble that Broke the World". Hudson has been around the block a time or two and I sense he could be one of the 2 or 3 top economists in the world in regard to how we solve the current crisis that is sure to engulf the world in depression and maybe war if the problems aren't solved. http://neweconomicperspectives.blogspot ... ugman.html

[mannfm11]

John, your housing post is greatly appreciated, as you are right on again. Here in Dallas, the housing depression lasted for a good 7 or 8 years before things cleared out and there was growth demand here. The trend line doesn't take into consideration the deflation that is going to occur as people are squeezed to pay down debts and work in an environment of non-expansion. The problems in economy and housing we face are either not understood or are ignored. I sense that the new buyers are going to be from the same pool as the excessive percentage of home owners that got us in this mess in the first place. Also, the foreclosures are being bought by speculators who might be paying cash, but I would imagine are borrowing from somewhere. I talked to a guy back in February last year who managed a lot of property for a large concern. They had already loaded up on property in Las Vegas, which has continued to collapse. If the occupancy doesn't come to those properties, either those properties or others with more debt against them will continue to depress the market. I believe the trend itself was part of the bubble, the inflation of credit and will itself deflate. The idea we go on the other side of the trend has a lot of plausibility and the more they prop the market, the worse the result will be.

[OLD1953]

The fake gold scams come around every time there is a major jump in the price of gold. Gold is itself in a bubble now, and there will be major problems with the metal in the not very distant future. One huge one is that fractional reserve selling (to coin a phrase) is apparently taking place on the commodity exchanges, and there isn't enough gold available to cover the sales if everyone demanded gold. If the exchanges collapse, it will take a huge amount of the shine off gold as the "safe" store of value. Will they? Good question, wish I knew the answer.

The stock market bubble is apparently largely due to the nearly zero rates of interest paid by banks now. Millions of retirees, unable to face dipping into capital and cutting back their lifestyles, are throwing everything into the markets. My brother is one of them. This is obviously an unstable situation, ripe for a stampede to the exit at the first major scare. The lucky few will make it out, the rest will have losses of 70 or 80%, if not worse. The plan for the bank rescue amounts to "give them guaranteed profits and let them pay out nothing". A real downer for the public.

The latest data I have on oil shows nothing good. I have great trouble believing in a wholesale conversion to LNG as transportation fuel for ground transport, and that's a huge proportion of the projected increase in "oil" for the future. Given some of the comments I've read, apparently most just look at the top line on the charts of projected growth and say "it's an increase". Given that this assumes discoveries of conventional oil fields capable of replacing old fields at the rate equivalent to loss of production will be discovered (a very controversial assumption) plus an increase in conventional production from improved technology (point: Saudi Aramco boasts they can get every possible recoverable drop right now - and how do you get more than that?) plus increases from production of tar sands and shales (incredibly polluting) and you get some idea of what oil is up against. The optimists say it will be fine, as long as we get a third of a trillion per year invested in increased production for at least the next twenty years, and after that we'll have shortfalls anyhow. And where is all that money coming from? The oil companies aren't THAT rich.

Every economic boom in the US in modern times was preceded by low oil prices. We aren't getting low oil prices any more, unless WWIII kills half the human race.

How you get anything good out of the facts today, I don't know. But I surely do see a lot of happy smiling faces on MSNBC and Fox.

[Hesiod]

Hi John, I have been reading your Blog for about a year and a half now, and I've got to say thank you for your time and energy. I tell all my friends and family about your Blog...anyways, I read an interesting article today written by Paul Krugman finally sounding the trumpet stating China is effectively helping unemployment stay high in depressed economies by keeping their trade surplus artificially high. I feel more and more economists this year will be tooting that same horn.
Sooner than later those mercantilist policies are going to make the depressed nations of the west act.
http://www.nytimes.com/2010/01/01/opini ... ugman.html

[MarshAviator]

Plenty More Downside to Come

Relying on the valuation methodology made famous by Yale professor Robert Shiller, author of the prescient bestseller Irrational Exuberance, along with some analysis of his own, Doug Short, publisher of dshort.com, raises the question that many bulls seem to be ignoring (or avoiding): "Is the Stock Market Cheap?":

http://www.financialarmageddon.com/2010 ... ageddon%29

Looks like others agree with John's perspective on earnings and valuations.
Look out below.