Hello Pezz, To be Jay on a weekend, I am definitely finding the current time difficult to navigate.
On the one hand I think the US financial-scape is a disaster in waiting.
Even though I believe in DUEED (Dollar Up Everything Else Down), I cannot simply load up on Dollars and dump on Gold. That would be foolish.
On the other hand, everything else appears to be poised to go down further, eventually engulfing real estate, all to be brought about by natural (EDIT: to be read as ‘for sure’) developments in a debt-ed US requiring more debt and/or more printing.
Any respite from fall is likely false comfort, and any rise perhaps deceiving.
This past week we got a peek at what DUEED tastes like, and … well, you know … it did not feel like a tea party. [EDIT: yes, I am all mixed up, peeking at a taste and then feeling it].
Mr. Greenspan wants J6P not only to manage his housing equity through the use of adjustable rate mortgage refis, but also wants J6P to treat his savings as a hedge fund.
“Friday the 13th”, and “Freddy is Back” will pale against the coming thriller saga of “Engulf and Devour of J6P”
And so we must play the macabre game, here are the rules achamchen.com , here is the script achamchen.com (done in November 2002), and we are still going here achamchen.com , waiting for few more head lines Message 15421566 .
I am as afraid as ever, but am willing to be amused while being afraid. We have no choice.
I often ask myself a question, if I was at the end of the beginning of this time journey achamchen.com , what should be my moves?
My answer is I do not know, because even if one was absolute sure of the script, one cannot know the choreography and so screw up massively during the performance in any case, except more smartly, knowing why things are screwing up the way they are.
So, we may be wise dead men instead of stupid dead men ;0)
This week a welcomed cyber visitor (EDIT: thanks to PQL in N.America) left me with this frame of figuring – a Richter Scale of wealth.
The scale looks like this and argues that wealth distribution is regressing to a feudal state.
(10) 500 Billion USD - Theoretical maximum wealth as % of world GDP (Ghengis Khan, Caesar)
(9) 50 Billion USD - Emperor Class (Gates, Buffet, Rockefeller, JP Morgan)
(8) 5 Billion USD - King Class (top 100 Forbes)
(7) 500 Million - Duke Class (major option holders of large corporations, top rock stars, Oprah, Hollywood moguls)
(6) 50 Million - Baron, Minor Nobility Class (Millionaires. No Lear jet or castles but nice house in San Diego, ski condo in Vale. Pro athletes, run of the mill money managers on Wall Street, run of the mill movie star, entrepreneurs.)
(5) 5 Million - Guild Class (doctors, lawyers, stock brokers, small businesses, lower end pro athletes. okay house, kid at UCLA, Porsche Boxter)
(4) 500 Thousand - Peasant Class (90% of US population below this level. J6P. Excessive leverage. Mc House with Mc Mortgage. Worried and Stressed.)
(3) 50 Thousand - Serf Class (working poor. leverage)
(2) 5 Thousand - Peon Class (social assistance, students, most of the developing world below this level. emerging middle class in China and India)
(1) 5 Hundred - Slave Class (homeless in the US, 70% of world population at this level or less)
The thinking is that the groups in Level 3 and 4 have lost ground for 30 years and getting increasingly irritable at their political masters.
Historically head chopping follows.
I think the Guild class, folks in the USD 5 mm-10 mm range, is getting mighty nervous as well, or ought to, because at zero real rate and asset value unsupported by cash flow in many goodies, 5-10 mm can get fritted away pretty fast, and as it does so, causing bad decisions in other areas and investments, fritting away faster.
The way events are trending, the only thing worth true money is continuing exogenous (to the portfolio) cash flow, not portfolio assets, because spending portfolio may be a one way trip.
Dare I whisper the words Dissipation, Confiscation, Redistribution, Evaporation, Repudiation, and leading on to Revolution?
So, the script will play out, except going beyond what our imagination can even begin to comprehend at this happy interim.
And the technical charts will at some point show bloody heads on sticks off headless shoulders next to a gentry cups near Aristocratic saucers. Not exactly pretty.
For some, a foreign journey may be called for, in person or via activities/assets, once in so many generations, to seek out new worlds and wider (but uncertain) horizons.
Chugs, Jay |
