Consider_this

Country Default Risk

One scenario that didn't seem possible before all these crisis started seems to yell out from this chart now.

What happens if all the govt defaults?

It doesn't even have to be "all countries" to cause the govt-credit market to seize up in general.

All the countries look terrible now, so this is not that far fetched.

Plus, with global trade linking economies know, As each country fails, it'll pull it's economic neighbor, whether trading partner, creditor, partner or what not, down.

This has never happened before, so I *am* describing a black swan event.

But consider the consequence if it does happen. I can't begin to fathom this bottomless pit.

Forget gold or silver, if this happens, we're talking about military might being the ultimate valuation/currency of any country. i.e. 1 unit of firepower = 1 bag of rice or something like that. Exactly what was used during cavemen periods.

What have we done!

Cheapest Valuations in Decades Will Trump Panic Selling

Too many "buy" articles out there. Look at what yahoo, marketwatch, seekingalpha is publishing.

Too many knife catcher. The proper contrarian play would only occur when nobody wants to talk about it, not when you have so many bottom callers writing articles like this.

Wait 3 years, perhaps we can talk then. (Japan's deflation was 18 years, so a wait of 3 years from now, DOW's high in Mar still being 14000+, is pretty aggressive! Maybe should even wait 5-8 years!)

Another Bloodbath?

gabe:

What is the fundamental driver for US growth in your upcoming boom?

Until you can answer that question, what you've described is only market psychology guesses.

1. Consumers are tapped out.
2. Housing as a growth engine is done, we've miraculously build so much houses that demand will be sated for a long time. Boomers are past their prime home-owning demographic peak and is going to downsize/cash-out going forward and act as a net drag on home values.
3. Export as a solution is completely toast. Rest of the world is in turmoil and cannot import our products with their demand nor buying power.
4. Debt as a money-infusing mechanism is done. We'll be lucky if it doesn't blow up in our face, let alone provide an engine for growth. A cousin of debt is the mandatory govt obligations (aka Social Security, Medicare) is also going to become a net drain on resources from the economy.
5. Boomers are moving more and more into sunset years, and that engine of net demand gain is becoming more a net demand drain.

Until you solve the fundamental economics problem, everything else is just building castle in the air.

Another Bloodbath?

With the above happening in real time.

I hear things like:

Equities/Gold/House/Ha... Asset is King.

all the time!

Unless there's mass delusion out there or I'm not invited to smoke something great.

What gives? (beyond random hope)

Another Bloodbath?

Gold is down to $666, broke the critical 700 level that is support for a long time. This bodes ill for anyone. Whole market is down. Budgets are tight. Jobs are scarce.

Demand of finished goods dropped off a cliff. Ask any car/bestbuy/home/furni... driver/gasoline dealer.

This is the clearest indication that we're running headlong into a deflation.

And then fed's money lending/giving spree is getting stuck inside banks (shoring up balance sheet), recycled right back into buying treasuries, and fighting a losing battle with the amount of money currently evaporated by the deleveraging event.

Fed print about 2 trillion so far, which on it's own sounds like a lot. But the market's deleveraging lost more then 4 already (and perhaps 10 times that still not "reported" or in the pipelines).

Sounds like a losing battle to me.

Emerging Markets Infrastructure Is Booming

Check out hlsyf.ob as an infrastructure play. It is a play on high speed rail build out, subway buildout, nuclear buildout, wind power controls and industrial automation.