Wednesday, January 4, 2012

BANK RUNS AND CONSTANT QE


Just sit back and watch as the ECB and FED balance sheets expand beyond Goodyear Blimp status. QE will continue as it has since QE2 ended. It just isn't being called QE.....at least not yet. What we are undergoing now is continual coordinated QE with the resource rich nations caught in a quandary. Can they endure the imported inflation as the developed pigpens print to infinity? Instead the move away from the dollar will continue as it loses its reserve status with incremental swap agreements between major trading nations continue to arise. Japan/China/Russia/Brazil are just the beginning as they struggle for dominance with the Western powers and their fiat monopoly. This will not end well as we continue our depreciation wars to keep our GDPs positive. The tradeoff for now is a slowly boiling stagflation. As we lose CONfidence in the value of our currency then the velocity of money that Joe and others have referred to will begin to increase rapidly as the holders of the dollar cannot wait to get rid of the dying currency. Bank holiday and devaluation will be called or a new currency instituted. It may seem relatively benign for some of us but in many countries food comprises 70% of a family's budget and you've already seen just how destablizing can be in these countries. The Arab spring is about economics. The inequity of the classes...make NO mistake. It is coming here too so don't get too apathetic about this issue. For now we are talking printing and printing means that eventually there will be inflation so prepare. It won't be immediately but once velocity picks up then it will be fast. My best guess 2-3 years.




I still believe the miners will have a washout and become oversold on the weekly so those of you holding some cash still just be patient. Those of you with your cores, hang on or go to physical and forgetaboutit.






21 comments:

  1. Pms showed relative strength today. Loaded up on gbg as it lagged the miner bounce....I hope a washout comes.

    sean

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  2. Hi Sheeps,

    I have some AUQ. It tried to break thru resistance yesterday (8.50ish) and failed. Today, got to 8.53 & failed. I think once it punches through, it could get to 9 quickly.

    Today on my way to work, I heard on the radio that Kodak might announce bankruptcy. I am from a Kodak family. If I get a chance this weekend, I will write about it.

    Bill

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  3. Please write on it Doc.....I remember in the 70s driving past very large Kodac plants out east and wondering WTF they did in those plant and how monsterous they were....and sheeps....can't count on the next big leg down but I'm ready to hit it if they do it.....

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  4. Funny how Gold and stocks both shrugged off this DXY move.

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  5. Well stocks shrugged it off long enough for the market to close I mean :) Pretty mild close but the DXY was already rip-roaring. Gold though still seems unconcerned.

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  6. makes you believe it has further to run before they pull it back

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  7. Good Morning!

    Would like to hear the Koday story Doc.

    Despite the fact Iran Tensions eased, the dollar strength and better UI numbers PM still resilient.

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  8. Kli & Sheeps,

    I should have time this weekend to write it.

    AUQ touches 8.50'ish again, and....fails.

    Hopefully 0 for 3 is not a strike out.

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  9. oh doc....dont get too impatient...i would let them flush it for one more big add.....yum yum yum........and then just sit back

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  10. Another push to either side of 1300 is doable before a pullback. Holding off on any shorts until another brutal squeeze, or any position for that matter. This is the last year for getting things in order so I will try and minimize the number of paper positions to an amount I can afford to lose.

    New roof up and gutters almost done. Realize emergency water supply needs addressing when the nearby main was shut off for a short while.

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  11. save rain water from the down spouts. one good rain fills up a 100 gallon tank from one face
    of a roof.
    I have been using rain water to quench green house starters all winter....

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  12. red went to a ag feed store and bot a 80 gal polyurethane storage vesses for 40 bucks last year....keep it in the attic in case

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  13. kliguy38...so glad to see you start up here again. You are one of the posters at TF's I always read.

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  14. Might wanna grab some reasonably priced hiking/military-type water filters too just in case you ever feel the need to drink that rainwater as well (given the taste of the tap water around here I should probably be using morethan a Brita filter already).

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  15. If not on a budget, reverse osmosis systems are pretty neat and a VERY thorough filtration method.

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  16. thanks Morla, already use a Brita or Pur canister to filter the drinking and cooking water. Got a temporary 32 gallon plastic trash kept clean of trash. The reverse osmosis or filter system is on the list, but the first priority is getting water when it is shut off. The grandfathered well on the property needs repairs and electricity. Will get the 80 gal Kli storage vessels and the tub storage container you can get from cheaper than dirt or Amazon. Plus have to build back up a rotating supply of at least 10 gallons of bottled drinking water. Solar Panels and deep cycle batteries later this summer. Very basic things we take for granted when the infrastructure was kept in repair, things are falling apart more often now.

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  17. For anyone taken completely off-guard by a water shortage, don't flush your toilets, that tank will bankroll a couple days for you to try and figure something out :)

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  18. Also if you have or can generate electricity the dehumidifier might be a good friend in a pinch.

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  19. all of you on water YOU must have storage ...save Plastic containers like with diet green tea Arizona brand buy the tea at walgreens or walmart for 2.50 a gallon

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