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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: russwinter who wrote (77890)1/19/2007 12:54:40 PM
From: Real Man  Read Replies (1) of 110194
 
"And a 10.85 VIX on a synthetic power keg is about as natural as 1989 Soviet Union economics."

Well, after 1989 in Soviet Union came 1990, 1991, and 1992
hyperinflation. 1989 was surreal - you could walk into a store
in Moscow (which was much better off than other regions of the
country),
and find nothing there, except a salesman selling it - nothing,
that is. A salesman working in a store with completely
empty shelves. Nothing at all, in the whole store. That's
when money is really overpriced relative to goods.
I was thinking: why would he come to work?
The answer is, in a socialist system he was paid for just
going to work.

After 1992-1993 hyperinflation, the stores were full, but
nobody could afford to buy anything. It's not fun
now to see some totally empty shelves at a local Wallmart...,
but it is certainly less surreal than 1989 Soviet Union.

I have no guess as to how things will proceed from here.
Synthetic market is being supported via futures by a single
powerful entity. So, there are 2 possible scenarios. Scenario #1
- the entity is overpowered by the market forces in a market
that wants to go down. Then we'll have a crash similar to 1929
or worse. Scenario #2 - the entity is the Fed, which can
create money from thin air and can't be overpowered by the
market. Then at some point the confidence in the dollar will
evaporate, and we'll have a currency nightmare.
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