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Pastimes : True Confessions -- Admit it -- you bought that stock -- Ignore unavailable to you. Want to Upgrade?

To: re3 who wrote (766)	4/5/2008 8:01:19 AM
From: Real Man	Read Replies (4) \| Respond to of 990

Canada, eh? The meltdown is global. Yes, I am very concerned. The Fed is extremely scared. What are they so scared of? I think we know. 50% of the Fed balance sheet is lent out, up from about 10% this January. Fed balance sheet is not enough to forestall trillions of real losses from the housing meltdown. All stocks are not without risk, including gold stocks. Safety first. Physical gold and silver is my main holding, by far. I have been accumulating SOME SA gold stocks from ZERO. Some risk, so what? They are very cheap at POG=900. I am concerned that derivatives will inevitably cause a domino effect once one big player or many small players (hedge funds) blow up and default on their contracts. The effect on derivatives from many smaller players blowing up will be the same as from large player blowing up, just more gradual. -g- The end of this type seems inevitable, because derivatives have been growing exponentially, and these markets can't grow to infinity. 11 Trillion REAL VALUE (500 Trillion notional, but who cares about that) is completely INSANE. Offloading risk onto the system under assumption that the Fed will always save it? Yeah! Systemic risk is enormous. The Fed will soon be out of ammo. What happens then? 1) A meltdown 2) Monetization on a grand scale, leading to hyperinflation. Can they monetize out of derivatives? NO. Why not? Cause derivatives either have to grow exponentially much faster than new money is created or collapse. This is a Ponzi scheme. 3) both? I pick (3), although the degree, the relative weight of (1) and (2) depends on what the Fed and others will do. If Bear almost toppled the system, this is NOT a joke. Here is TED spread. While the spread has come down since mid - March, it reached the levels higher than in 1987 market crash 3 times. It is turning up again. bloomberg.com