Financial topics

[Higgenbotham]

The Russell 2000 is making record highs after hours right now. I'm shorting a small amount. Probably too early.

I'm using the -1x ETF and am only 5% short unleveraged.

[vincecate]

1. The fact that adjoining territories sell goods for dorrals and accumulate dorrals to purchase assets that pay interest;
2. The fact that the population in the territory must pay taxes in dorrals; and
3. The fact that loans in the territory and adjoining territories are made in dorrals, which creates some demand for dorrals anytime an expansion goes into reverse.

If there is a rise in the interest rate, surely the mortgages are worth less and that can be calculated. However, I don't believe that directly correlates with the value of dorrals due to these other factors.

1) The other territories don't need to keep using dorrals or accumulating dorrals.
2) Once the government thinks they can print all the dorrals they want, without problem, they start spending more than twice what they
get in taxes. So it is no longer possible to use taxes to withdraw dorrals from the market and hence support the demand.
3) Adjoining territories can default on their loans. Part of what happened to the Fed in the 1930s was that Germany and others defaulted.

But in my model, can you see how backing the dollar with 30 year dollar denominated bonds is just backing the dollar with the future value of the dollar? If people start to believe the future value of the dollar will go down (inflation) then the bonds go down faster, and the Fed does not really have enough assets to "back the dollar" any more. So backing the dollar with the future value of the dollar is not really any better than not backing the dollar, in the long run. See it? This is why when bonds crash the dollar will crash. This is how it all comes to an end.

[aeden]

We were the first to provide exposure to a digital asset through a regulated wrapper,
and our goal is to ensure that we lead the market in whatever future product we bring forward as well. t

[Higgenbotham]

1. The fact that adjoining territories sell goods for dorrals and accumulate dorrals to purchase assets that pay interest;
2. The fact that the population in the territory must pay taxes in dorrals; and
3. The fact that loans in the territory and adjoining territories are made in dorrals, which creates some demand for dorrals anytime an expansion goes into reverse.

If there is a rise in the interest rate, surely the mortgages are worth less and that can be calculated. However, I don't believe that directly correlates with the value of dorrals due to these other factors.

1) The other territories don't need to keep using dorrals or accumulating dorrals.
2) Once the government thinks they can print all the dorrals they want, without problem, they start spending more than twice what they
get in taxes. So it is no longer possible to use taxes to withdraw dorrals from the market and hence support the demand.
3) Adjoining territories can default on their loans. Part of what happened to the Fed in the 1930s was that Germany and others defaulted.

1) The other territories don't need to keep using dorrals or accumulating dorrals.

Correct, they don't need to keep using dorrals. In 1968, France could have said if you renege on your agreement to redeem dollars for gold, we will no longer accept a trade imbalance. And I'm not saying that's way out there and not possible. Well, I think John would say Generation Dynamics theory would have made it essentially impossible because France would not have made that decision at that time in the cycle. But it's certainly not a decision that would have hurt France in a serious way. France may have gone through a recession due to the reduction of exports to the US.

2) Once the government thinks they can print all the dorrals they want, without problem, they start spending more than twice what they
get in taxes. So it is no longer possible to use taxes to withdraw dorrals from the market and hence support the demand.

The US is basically at that point where it really believes either it can print all the dorrals it wants with impunity or that is the best option and at the point where its tax revenue no longer is as supportive to the value of the dollar as it once was.

3) Adjoining territories can default on their loans. Part of what happened to the Fed in the 1930s was that Germany and others defaulted.

They can, and default would imply that there is not a scramble for dollars for those loans. Though it would also imply less assets on somebody's balance sheet and a potential disorderly unwinding.


I think the other issues of importance are:

1. There are more interlocking derivatives than there were in 2008.
2. There is more debt, especially private market debt and within that corporate debt, and a lot more zombie companies than existed in 2008 (zombie companies increasing exponentially). The focus seems to be on the government debt, but the private debt seems to be more the issue, and the poorer quality of the private debt, especially the corporate debt.

[Higgenbotham]

But in my model, can you see how backing the dollar with 30 year dollar denominated bonds is just backing the dollar with the future value of the dollar? If people start to believe the future value of the dollar will go down (inflation) then the bonds go down faster, and the Fed does not really have enough assets to "back the dollar" any more. So backing the dollar with the future value of the dollar is not really any better than not backing the dollar, in the long run. See it? This is why when bonds crash the dollar will crash. This is how it all comes to an end.

Let's say the dollar is no longer the world reserve currency. In other words, the post WWII nation state system exists basically as constructed, but no longer as a system that allows for the accumulation of dollar assets as central bank reserves in other nation states. To me, that's improbable because I believe if things get to that point, they are going further than that due to war or some other reason. But let's say it happens.

Then I think the value of the dollar will go down a lot as you say. The US economy would have to get some productive capacity and some things it can sell to the world to turn things around, as well as tax revenue from that. A lot of observers say that the trade imbalance is overstated because the US sells a lot of services to the world that aren't accounted for in the balance of trade. I don't believe that. I think there would be a tremendous amount of work to do and things would never get back to what they were in the 1950s and 1960s when, as I described, there was an employment office and help wanted sign in front of nearly every manufacturing plant and true full employment in the US.

[aeden]

true
As you queried since 1968 fiat was in the works for organs.

https://prophecyupdate.blogspot.com/202 ... on-in.html

The Fabian communist's ran into a military that negated vote fraud.
https://www.brookings.edu/wp-content/up ... liding.pdf

[Higgenbotham]

I think the other issues of importance are:

1. There are more interlocking derivatives than there were in 2008.

Like many things, this is debatable. After 2008, notional values were still going up, but there is no recent data on this. Notional values would be stated in the hundreds of trillions. Data since about 2014 is published on a net basis and shows net exposure decreasing. My limited understanding of this would be that every derivative has a counterparty and netting depends on counterparties being able to pay.

[Higgenbotham]

We may be in the home stretch of the stock market bubble. I stopped short term trading today and have just started to think about going short.

In surveying the mood of participants this morning, it came to mind that recent stock market tops have been preceded by wild projections, the craziest I can recall being something like S&P 8800. I haven't seen anything like that yet. We may need to see that. I'm seeing preliminary signs of the long term permabulls getting more excited and active, but they are not in a frenzy as of yet.

The permabulls are starting to go into their active phase tonight. They are calling out higher numbers but not stupid high numbers yet.

[aeden]

The zero reserve policy document is at the Federal reserve.
The chain of custodial stewardship is the derivatives you seek
from the sanctioned product from Toronto and Frankfurt.
It was issued in 2008.

[richard5za]

** 11-Mar-2021 World View: Math is racist

> My experience is that most people struggle with math and math
> logic; I'm not including calculus in this comment but I mean less
> advanced e.g. advanced arithmetic.
> .

Forget calculus. Most college graduates today are too stupid to
do even fourth grade math, because they've been taking women's studies
or sociology or equivalent courses that teach you to be stupid.
In fact, most of them can't do second grade math.

For example: "Jack bought a tv set for $237.99. Jane bought a tv set
that was 27% less expensive. How much did Jane pay?"

That's a fairly simple fourth grade percentage problem, but it's
completely inscrutable to idiots like AOC and other college graduates
today.

That's why they're calling math "racist"." Because they're idiots.

Interesting take on maths.
We learn maths by doing it. My dad was a math teacher and taught us that. Even my sisters all of whom are very right brain got distinctions in maths school leaving exams. So math is some teaching and lots of discipline: Do it again and again until its second nature and you'll be math competent. Some people of course have an extraordinary ability e.g. Higg
So the logic on how you get to "math is racist"is totally beyond my comprehension!! The diligent students/people are racist and the lazy ones not?? Goodness me!
To give you a smile for today: I remember at university the math exam papers used to say "Answer all questions". One of my friends was reading history and for the final exams the exam paper would say "Answer 3 of the following 25 questions"!!