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Originally posted by: BillyBuckeye. . . The Fed keeps printing more money and USA credit is horrible.
I fear the continued rise in gas prices will tip the very fragile US economy over into a dramatic downward spiral.
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Originally posted by: BAGIANT
It's not going to be too long before the market collapses. I'm getting ready to short the market as we speak.
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Originally posted by: jatki99
I'm with everything posted above. I'm ready to short pretty soon,but i dont think we've quite crested yet.
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Originally posted by: INdianapaddler
Wall Street is up about 44 points as of this post. But according to some, this is just the run-up to the coming crash-and-burn.
Holy-Moly ! And INdianapaddler claims DonDiego spreads gloom-and-doom!
The US economy is, in fact, not in good shape. One should consider the understated inflation numbers, the understated unemployment numbers, the record numbers of those on welfare, food stamps, Medicaid, and unemployment, . . . and lots of other things to realize this.
The crisis of 2008/2009 was primarily caused by excessive debt. To correct this, the US Government has created, . . . ever more debt. And the Congress has passed ever more expensive programs, . . . which it cannot pay for, . . . so one should expect, . . . umm, dare DonDiego say it, . . . ever more debt.
What is one to do?
Well, in 2007 DonDiego came to believe that the housing implosion was inevitable. He read the right analysts. For about 15 months he sold most of his stocks, as he has documented elsewhere in this Forum. The 15% or so which he kept fell during the 2008/2009 crash, . . . a lot. The one stock which he retained most of fell to 95-cents.
After the bottom in early 2009 DonDiego started buying back in. Among the first things he bought was more of the one stock he had kept throughout the collapse; in fact, he bought a lot more as it rose. Today it hit an all-time high of $10. And he owns a lot. A whole lot!
But the question remains, what is one to do now?
Things are not so clear. And some things are unprecedented, . . . like just yesterday, the Chairman of the Federal Reserve gave the first news conference ever for a Chairman of the Federal Reserve. And he said, . . . as everyone waited to call their stock brokers or hit their sell buttons, . . . . or maybe buy buttons, . . . anyway, he said that he'd continue the current policy.
Whew! Actually he couldn't say anything else.
Here's Mr. Bernanke's dilemma:
__If he stops or slows buying US Treasury Bonds interest rates will rise, and the economy will slow from where it is, . . . and it is none too strong now. (n.b. Interest rates will rise because there are not enough buyers at current rates to make up for the roughly $130-billion in bonds which the treasury is buying every month right now.)
__If he buys more or lowers interest rates, inflation will increase. Food and gasoline already reflect significant inflation; a significant increase would soon lead to an ever-more recognizable decrease in the citizens' standard of living. No one wants that.
So the policy remains muddle on, . . . and hope. And the market did little.
OK, things are not so clear, . . . so what is one to do now?
DonDiego is watching and waiting. Some of his stock holdings have recently begun to decline. DonDiego doesn't expect to sell at every peak, or maybe even any peak . . . but at some point he'll decide that he believes the peak has passed for some stocks and begin to sell. Maybe slowly like in 2007, maybe faster, as some posters above suggest they will. It all depends what happens and how DonDiego interprets what happens. But he is nervous. (He is most unlikely to sell short; that is a bet with no inherent loss-limit he has always chosen not to make.)
DonDiego suspects if the Government must choose, . . . if in fact it still can choose, . . . it will choose higher inflation over deflation.There's lots of reasons, . . . among them simple hubris - Mr. Bernanke believes he can control inflation.
And there's some advice DonDiego read, maybe 30 years ago or so. Somebody wrote that because the Germans had suffered through an inflationary depression, they'd never do so again if they could do otherwise; they'd prefer to suffer deflation. And, likewise, he wrote that because the Americans had suffered through a deflationary depression, they'd never do so again if they could do otherwise; they'd prefer to suffer inflation.
Perhaps the reader and DonDiego shall find out.
DonDiego says: "Be alert !"