excellent post, lp.
I do think that one day it will all end very badly, despite the world not wanting it to happen. eventually, no force trying to prevent it will be bigger than the markets. I don't know when that is going to happen, but my WAG is that it is starting to unwind now.
My guess (worth what you paid for it) is that not everything is going to go down. I call it deflation because I think the money supply will be shrinking as people start hoarding cash and saving, but most people will call it stagflation. As I believe several people here have discussed, the cost of a lot of things will be going up, things people have to have. Energy is one, health care another. Things that have been bought on credit and that people can do without (or with what they have) will go down. Housing, cars, electronics, clothes, etc. to name the obvious ones. Wages won't be going up, jobs will be disappearing, as the cycle feeds on itself. Gold, as russwinter so eloquently put it, is the only currency that is not someone else's liability, and should explode in value, even more so relatively speaking.
My WAG is that the stock market deterioration of the last two months will historically be seen in a similar light to 1931. It will be a relentless down after an enormous sucker's rally that will cause great despair. It forecasts very rough times ahead. Like Homestake Mining then, gold will flourish. |
