Mr.G

Deflation Changes the Rules

"See, cash is king, but what's cash? Most of us don't keep it in our mattresses. It's not gold, because that goes down in times of deflation."

I beg to differ you can buy more commodities with gold at 880.00 today than when it was a 1000.00 - more gas- more oil -more corn- more copper - yes the price of gold has gone down but its cash value has increased when compared to all commodities - thats the best cash

Stock Market to Bernanke: Hints Aren't Good Enough

tim dont be surprised if by friday markets arent open for trading and bank branches are temporararily closed w/ limited atm withdrawals - the last rate cut did absolutely nothing except increase the spread - this new global one will do the same - (lets see how long it takes the street to figure this out) - I expect the fed and the treasury will stop time(close themarkets) and catch up and fix some of the very screwed up fundamentals in the market - they will stack the deck so that when the market reopens it will climb instead of dive -it will then remain in a much smaller volatility range or channel for a very very long time -but stabilisation is much better than the rapid declines we have seen -

Is the End of the Crisis Near?

what you dont realize is that when inflation does turn its head on the overstretched consumer it will just be more of the same (defaults on credit but now with those who were supposedly immune to it ) a never ending cycle of pain -credit is getting a very bad rap and will radically change the way the american consumer spends for years to come - and it wont be a good one

Wednesday Outlook: Commodities, Emerging Markets

I dont think the govt will actually purchase stocks to stop the slide -but it wouldnt surprise me if they closed markets at this point while they fix some seriously screwed up fundamentals - at the same time closing banks across the nation and limiting ATM withdrawals -
If they do it they will load the deck for a rally when the market reopens

U.S. Dollar: Best of the Worst?

yeah -in the short run commodities will continue to tank but as the injection of liquidity from the fed /treasury takes place plus all the money on the sidelines - plus central banks around the world printing out their own currency - yes inflation is right around the corner -the price of gold reflected that yesterday as both the dollar (increased against other currencies ) and gold increased at the same time -the fed 's policies as well as world banks is to dilute the problem with so much currency it becomes a more manageable problem being having so many dollars around will deflate the cost of the crises or credit derivatives but inflate the cost of assets

On Oct 07 02:36 PM andrew Abraham wrote:

> Members of MyInvestorsPlace.com have been chatting that they expect
> massive inflation...interestin... currently commodites are cratering..What
> do you think???

U.S. Dollar: Best of the Worst?

this isnt the 1930's where govts have to find more gold to back their dollars/currencies .They are all fiat currencies and can literally be printed out of thin air (there is an unlimited supply ) - all the CB's around the world are being forced to create money(even if it is only to buy dollars)- the dollar wont crash because evryone is creating new money at the same time- In the last 2 weeks alone (before the new 900 billion auction and the bailout)the govt has been printing at 200% increase -
why else would gold go up while the dollar does ? because there is a worldwide devaluation of currency and gold unlike other commodities has no real industrial demand and doesnt reflect future demand in this respect (majority of commodities are tanking due to the assumption there will be less economic activity in the future)but in fact is showing there will be future inflationary pressure due to the current creation of currencies..

Dollar and Gold Rise Simultaneously? Bring On the Flying Pigs

if you are looking for the reason pigs are flying it is simple - the fed is creating new dollars -but so is every CB in the world (or they expected to) so therefore when its calculated how many dollars will be printed compared to other countries to dilute the problem the dollar rises -at the same time the dollars created will make gold more expensive or create future inflationary pressures as well as all the other currencies -and that is my theory why pigs are flying

John Hussman: Depression Fear Mongering 'Ridiculous'

the insurmountable problem will be diluted in dollars or your currency of choice as the fed and other cb's throw so much money at the problem it shrinks (due to all the fresh currency)and becomes manageable for banks to deal with on their own -it will also bring up the price of assets in the long run -it is world wide currency devaluation so therefore the dollar wont crash because the rest of the world is printing to cover the losses

Tuesday Outlook: Commodities, Emerging Markets

there wont be capitulation for all those waiting for one - the fed and the treasury can literally inject 100 billion into seven banks if it like right now or 1 billion to 700 banks and can get more money if they want - this isnt the 1930's where they have to find more gold to back their dollars it is fiat currency and can literally be printed out of thin air (there is an unlimited supply ) - all the CB's around the world will be forced to do the same so- the dollar wont crash - In the last 2 weeks alone (before the new 900 billion auction and the bailout) has been printing at 200% increase - the assets or credit derivatives will be so diluted by the amount of dollars flowing they will just an a small expense rather than an insurmountable problem that you see today - this crises will be drowned in a dollar or whatever currency your central bank happen to print -with maybe the exception being iceland

Propping Up Home Prices Will Not Solve the Crisis

Norespect I believe Tim is pointing out it is a lousy solution -the current solution to the crisis which is bailout ( I believe the sum is well over a trillion w/fnm AIG- bailout lehman) and print money will in no way resolve this crisis either but create another -not only that at this point , you have every asset on the planet (food -oil- metals- stocks-muni bonds corporate bonds residential /commercial real estate -gas) being liquidated or taking loses and going into cash - now what happens when all of that money being hoarded plus all the new money jumps back in the game -and releveraging of all the assets occurs -you are going to see inflation skyrocket at such a level that 30% interest rates will probabaly be below the norm - and you will also see the American consumer being wiped off the map .Already, some measures of money supply, the ultimate source of devaluation of a currency and inflation in the economy, show money growth running at an annual rate of more than 14%.

And in the last two weeks, that rate has exploded even higher, to an annualized growth rate of over 200%! Now it seems europe is jumping into the fold - so expect to see the same there .

There is no way that kind of monetary growth can be anything but inflationary and I doubt with the economy tanking it will result in wages keeping pace for the American consumer

Why Is Everybody Selling as Buffett Is Loading Up?

he is a bargain hunter -also he is well aware GE and Goldman are under the to big to fail list -and Paulson probably gave a secret guarantee that goldman will profit from his low oversight when he starts dishing out checks for billions of dollars - what you dont see is Buffet running into regional banks - as for the energy companies the bailout has an alternative energy clause in it to give the industry a lot of money maybe these companies are on the list

Iceland: When Too Big to Fail Becomes Too Big to Rescue

Felix for the record there are many analysts who have been predicting the same for the US (marketoracle.uk is notorious since day one of predicting the enormity of the crisis(they have been right up to this point -will they continue to be remains to be seen also I find the site hard to swallow with its antiamerican overtones but none the less they have been right (more so than paulson and bernanke))- whether or not the US bailout pushes up the valuations of the credit derivatives will work for a short time but once the enormity of the problem comes to a head it might be downright unaffordable

Now's the Time to Buy Bank Stocks

venividi- I agree this is a dangerous move if done incorrectly -but if done in very very small amounts it might be rewarding - it would be ridiculous to go all in under the circumstances -but a very small investment at this juncture might also be wise especially since the US govt is now literally the market for the toxic credit derivatives and will certainly overpay bringing values up on these assets on banks books-even if they change the marked to market rule it is going to benefit
on the otherhand if the govt wasnt worried they would have lifted the ban on shortselling right after the bailout

The Amazing Dollar - Gold Correlation

big money -deflation is the problem right now everything is being liquidated and deleveraged including gold and I recently read an article where palladium and platinum futures are so down you would think the world had stopped spinning (in other words the price is so low it cant be produced at those costs but at the same time it might reflect future demand and if that is the case the price is saying there wont be any like zero ) . I personally am hoping it is an overreaction to this mess and a correction will take place soon -but you cant count anything out

Why Mark to Market?

the m2m will help the financials in this case as soon as the bailout is passed - why because Paulson is going to overpay for illiquid assets in order to get those m2m way up -it will be a smoke and mirror job but it may work -I cannot see Buffett going in the market for the economy's health- he sees profit and goldman and GE are his bets - citigroup looks like a gem in this scenario as well as chase and bank of america