Re: TJ's Blog -
You may have your new bubble asset class - Web 2.0 dot coms.
As for your shorts on Retail, Housing and Financials, I would consider protective buy stops on part of those posistions.
If "THEY" want to put them up for the election or just to keep confidence up for the US/China/Japan co-prosperity scheme, "THEY" can and will do so, at least for a few weeks.
>>>"I am holding off on doing same with paper gold and gold shares, for I fear that the officialdom, a concert, by intent or by coincidence of interest, can keep the fiat money inflation game going for another 5 years, or 10, or 15."<<<
I agree with this. I also think the devaluations/revaluations will be managed to minimize damage and panic, at least the first one. That "transistion management" may include ways to make it difficult to profit from the event. That "profitterring" actually means investors trying to preserve purchasing power in the face of fiat money.
One way to both forestall the "profittering" would to artificially put the prices of commodities up beyond normal supply and demand prices by artificial restrictions on supply.
These higher prices reduce the spending power of the fiat money, and direct capital to the commodity sectors.
This also limits the profitability of the manufacturing and retail sector, the major employers in almost any industrial economy.
After devaluation, the purchasing power of consumers wages and savings will have dropped. This can lead to a spiral of decreasing consumption and employment.
So the production restrictions are removed, lowering commodity prices sharply.
After devaluation, the lower prices more closely match the new lower purchasing power, so UNIT consumption can increase, resulting in more employment.
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Restricting production of many commodities is very easy, look at various drilling and production restrictions in the oil industry, environmental regulations in mining, tarriffs, quotas, etc.
I think this may already be occuring.
The sharp drop in gasoline prices will help retail sales and seasonal employment, counter the slow down from higher mortgage interest and the end of refinancing. |
