Thork

On the notion of Investing
« on: May 25, 2015, 06:04:22 PM »
Since 9/11 and the 2008 economic crash, I have become quite the skeptic and I now question everything.
Then stop worrying about earth's shape and prepare for the crash of 2015. Its going to be much worse.

Monetary policy since 2008 has been a disaster. The market was flooded with liquidity from central banks across the world and interest rates were lowered to 0%. This has caused huge asset bubbles and mal investment. The S&P 500, FTSE100, Dax and pretty much every stock exchange are at record levels and the underlying economy is not there to support those prices. The P/E ratios are ridiculous. Real estate valuations are similar. This is because 0% interest causes investors/banks to make poor decisions. If you can borrow at 0%, when you work out your profit/investment you are dividing by 0!

You can't invest in bonds, guilts and government treasuries. You get next to no return. If you had bought bonds in the last 5 years you would have lost wealth based on inflation. You can't buy commodities because they are inversely proportional to stock values which go up unless a crash occurs. So all the funny money has driven bubbles in stocks and real estate.

But now there are harbingers. The UK just had the first ever month of deflation in 60 years. US unemployment is rising again. The central banks need to act to stop another crash. But they have painted themselves into a corner. If they print more money, they can't monetise it because no one wants government bonds at 0%. And they can't raise interest rates because that will trigger a real estate collapse as people can not afford interest payments on mortgages they got out at 10:1 of annul wage. So they default, that lowers the housing price and starts the panic. Investors will want out of property and fire sale assets to protect wealth pushing more people into negative equity on high mortgages. That bubble will pop. Central bank failure to do anything, will cause a huge issue to the stock market that is overheating. Something like a Greek default could be a trigger. The crash will be from record levels to the lowest of the low.

The end of the financial world is upon us. This could be the death of the dollar as its value crumbles overnight and international holders look to get rid of it. A system based on exponential debt, will collapse when there is no one left willing to monetise more of it.

In short, buy commodities, sell stocks, rent don't own a house til after the crash and stock up on shotgun bullets and tinned food.

« Last Edit: May 25, 2015, 06:07:23 PM by Dr David Thork »

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Offline junker

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Re: On the notion of Investing
« Reply #1 on: May 25, 2015, 08:13:49 PM »
Thork, I split and moved your post as it had nothing to do with FET.
« Last Edit: May 25, 2015, 08:29:44 PM by junker »

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Offline Rushy

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Re: On the notion of Investing
« Reply #2 on: May 25, 2015, 09:47:38 PM »
I'm simply amazed that Thork has managed to not be homeless at this point. How does someone this financially retarded survive? The UK must have one hell of a welfare system.

Thork

Re: On the notion of Investing
« Reply #3 on: May 27, 2015, 08:57:58 PM »
How are bitcoins doing?

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Offline Rushy

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Re: On the notion of Investing
« Reply #4 on: May 27, 2015, 11:17:13 PM »
How are bitcoins doing?

I sold them all at 850 after paying 63 for them. You keep bringing this up as if I haven't told you many times before.

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Offline Fortuna

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Re: On the notion of Investing
« Reply #5 on: May 28, 2015, 12:01:47 AM »


One of these would be infinitely more useful than a shotgun. It's easier to reload, compact, 100x as accurate, has as much stopping power as a shotgun at range and up close, and you can hunt with it without getting buckshot in your food.
« Last Edit: May 28, 2015, 12:03:53 AM by Hollocron »

Re: On the notion of Investing
« Reply #6 on: May 28, 2015, 12:57:03 AM »
In short, buy commodities, sell stocks, rent don't own a house til after the crash and stock up on shotgun bullets and tinned food.

If you actually believed that your economy was in imminent danger of collapse, then this would be really terrible advice.  You'd be much better off owning a farm; you certainly wouldn't want to be renting property in a population center.

Also, how would buying commodities help you in the event of 'the end of the financial world'?
I have visited from prestigious research institutions of the highest caliber, to which only our administrator holds with confidence.

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Offline Fortuna

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Re: On the notion of Investing
« Reply #7 on: May 28, 2015, 12:58:25 AM »
Because Thork just likes to try to rustle jimmies. I'd have thought everyone would know this by now.

Saddam Hussein

Re: On the notion of Investing
« Reply #8 on: December 22, 2015, 02:26:28 PM »
Man, the crash of 2015 sure hit us hard.

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Offline spoon

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Re: On the notion of Investing
« Reply #9 on: December 23, 2015, 04:33:17 PM »
Man, the crash of 2015 sure hit us hard.
You speak too soon, American spending at Christmas time could literally break the world economy at any moment.
inb4 Blanko spoons a literally pizza

Offline model 29

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Re: On the notion of Investing
« Reply #10 on: December 25, 2015, 04:26:34 PM »
I spent about $35 for gifts and zero on decorations.  TAKE THAT WORLD ECONOMY!

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Offline Hoppy

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Re: On the notion of Investing
« Reply #11 on: December 25, 2015, 11:18:21 PM »
Man, the crash of 2015 sure hit us hard.
Amazing, you've been waiting since May to necro. Lol
God is real.

Re: On the notion of Investing
« Reply #12 on: December 26, 2015, 09:58:22 AM »



Let us calculate the upper bound of the national debt bubble:

It has been projected that “mandatory” federal spending on programs such as Social Security, Medicaid and Medicare plus interest on the national debt will exceed total federal revenue by the year 2025.  That is before a single dollar is spent on the U.S. military, homeland security, paying federal workers or building any roads and bridges.

If a government is given $1,000,000 as the total amount of currency in circulation, and is charged $100,000 as fee for borrowing the money (interest), then obviously that government will NEVER be able to pay back the amount of money it has been loaned.


Peter Schiff has calculated even lower bounds, in conjunction with possible interest rate hikes:

The Fed is expected to buy nearly 90% of new Treasury bonds in 2013, according to Bloomberg. This is a tremendous subsidy that has kept 10-year Treasury yields below 1.95% on average this year so far. Last year, with 10-year yields averaging 1.8%, the Treasury spent $360 billion on interest payments alone. That represented nearly 10% of all expenditures.

Let’s assume a Fed tightening causes these rates to triple – not unreasonable for a government facing over 100% debt-to-GDP. If these rates triple by 2015, and another $2 trillion or so is added to the debt, then interest would make up over 30% of annual federal expenditures. Just interest. Then, there are principal repayments, Medicare/Medicaid, Social Security, the Armed Forces, and all the other entitlements for which the Treasury is responsible.


While Congress and the media have focused on the $85 billion in annual cuts earmarked in the "Sequester," an increase of Treasury yields to 5% (3% higher than current levels) on the $16 trillion in outstanding government debt would translate to $480 billion per year of increased interest payments. Such an increase would force a tough choice between raising taxes, cutting domestic spending or reducing interest payments sent abroad for debt service. If foreign creditors begin to doubt that America has the resolve to make the hard choices, they may refuse to roll-over maturing obligations, forcing the government to actually repay principal.  With trillions maturing each year, actual repayment is mathematically impossible.

Currently (2013) the Federal Government counts more than $16 trillion in funded obligations. Over the next 10 years we are expected to add another $10 trillion or more. At no point in the foreseeable future are we expected to approach balance in our annual budget. All of our future bills are expected to be paid by future borrowing on a massive scale. Anyone with an ounce of integrity would have to plan for the possibility that an ever increasing debt rollover is a limited prospect.


Of course, there is only one question left to ask: at what point will any further rate hike cause the bond/derivative bubble to implode?
« Last Edit: December 26, 2015, 10:16:17 AM by sandokhan »

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Offline Rushy

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Re: On the notion of Investing
« Reply #13 on: December 26, 2015, 02:54:31 PM »
You understand as much about economics as you do about any other topic; which is so little that you have to copy and paste other people's writing into your own posts.

Re: On the notion of Investing
« Reply #14 on: December 26, 2015, 04:17:44 PM »
You understand as much about economics as you do about any other topic.

Exactly.

Here is my global logarithm formula, the dream of some of the best mathematicians for the past 300 years:



My Advanced Flat Earth Theory thread has received over 239,000 views; if you, Rushy, were to open your own thread on the subject, how many views you think you will receive?


Now, let us get back to the subject.

For those who do know economics, the Fu-Xia shadow rate is an extraordinary tool which can be used to understand what is going on:



The interest rate curve reflecting the period 2008-2015 has an extraordinary analogy to the political/military events which took place during the same interval.

Therefore, an increase in the fed interest rate means that they are anticipating a very different set of events.

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Offline Rushy

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Re: On the notion of Investing
« Reply #15 on: December 26, 2015, 04:24:04 PM »
It's interesting that someone who speaks about mass media is simultaneously swayed so easily by whatever the popular topic at any given time is.

You're essentially another Thork.

Re: On the notion of Investing
« Reply #16 on: December 26, 2015, 07:11:55 PM »
Back in 1997, an extraordinary work was published, At The Crest Of The Tidal Wave (which I highly recommend to anybody studying finances), by Robert Prechter.

In it, he predicted that the end of the Grand Supercycle should occur somewhere in the period 2002-2003.

What Prechter did not understand is that behind the world of finances lies another realm, that of astronomy.

Since the great events such as the Blood Moon Tetrad were to occur in the period 2014-2015, it is obvious that the end of the Grand Supercycle was to come at least 12 years later.
« Last Edit: December 26, 2015, 10:35:12 PM by sandokhan »

Re: On the notion of Investing
« Reply #17 on: February 23, 2016, 06:52:46 AM »
http://forum.tfes.org/index.php?topic=3243.msg84639#msg84639 (higher inflation coming)

You understand as much about economics as you do about any other topic.

"New inflation data from the Labor Department showed that the core consumer price index (CPI) rose in January at a 2.2 % annualized rate, the highest in more than 4 years, well past the 2.0% benchmark."


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Offline Rushy

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Re: On the notion of Investing
« Reply #18 on: February 23, 2016, 01:25:01 PM »
Levee has managed to continuously be wrong so many times he is frightened to post his own words now.

Re: On the notion of Investing
« Reply #19 on: February 23, 2016, 02:01:06 PM »
So far, I've been right about the Middle East, politics and inflation. Oil is next.