johnbee

ETF Trends: U.S. Dollar Attracts Flight to Safety Capital

Money has to go somewhere. Banks deposits are only guaranteed to very small amounts. US $ Treasuries are a safe haven only until interest rates rise or inflation creeps in as they surely will. Equities can be a hedge against inflation and currency depreciation but only if you cherry pick.
The rise in equity prices has little to do with reality. If some earnings are up its because of low interest rates, sacking of staff, temporary withdrawal of advertising, low inventory charges etc.
Funny that the lucky ones this last few months have been the gamblers and the uninformed unless you have been a banker in the Fed elite. It should have been obvious with hindsight that they had to be the first to be saved or we were all done for, but thats not a slam dunk just yet, and most equities have long uphill climb to go.

S&P Futures Move Lower; Forex Market Fails to Follow

Bernanke did not make good reading. There is no rebound yet; 2011 is the new forecast. The $ is the world's only reserve currency and safest place to be meantime.

Falling Equities Still Key for U.S. Dollar

There has always been credit expansion since the days of barter only stopped. It's credit that makes the world go round and the manufacture of money to do it by different ruses. There have been many times since the world war 2 when there has been too much weight of money needing to find a home (emerging markets; the .net boom etc) but yet the money rolls in endlessly from pension schemes etc and a new way need be found to spend it, or create new credit. Each time the new investment areas are overdone and the dealers make their commissions on the back (up and down) and there is a correction for a year or two, but optimism and new methods and opportunities come about. Only when money is totally wiped out will the whole system disappear, such as in a war, but it won't because people need to work and will work and produce and even in war will produce munitions for low wages. Money is not wiped out this time (maybe 10% of overall value in the world at best). So investors will reappear (even if its GS and JPM with borrowed funds) to take advantage of prices at half what they were a year ago and are not as bad as in the '70's when markets fell even further (down 75%) and inflation repaid the debts and gave way to the boom '80's.
If you are in employment you will eat, and its only the welfare state
and impossible pension rates which create a false labour market. This market will come right again sure enough. Maybe not in 2009 but what is a year or two of downside in ten? There are endless improvements in technology to come through but the rewards will be shared by all the world, not just the West as before. That's the biggest problem the West need resolve for their peoples, as they will need be equal with others in the next decade or so. In China when I was there 4 years ago the supermarkets in Beijing were as good as in the West and the prie of a good size melon was 10 cents, so $50 a week salary goes a long a way. The $ need fall to repay US debts but Bernanke is letting it happen slowly and will not let US interest rates rise too fast to kill the recovery. It will take time for the $ not to be the No 1 reserve commodity as countries need unwrap their positions slowly and find another alternative that can be used successfully. If it was to be oil and there is limited production in the hands of a few then the rest of the world would be open to blackmail. You can at least print $'s when you need them,
without limit, and you can recall them also, but not so oil or gold.
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On Jun 11 12:58 PM Living4Dividends wrote:

> Micheal Young - I agree with you (At least about the Dollar)
>
> Ludwig Von Mises put it best when he said:
> " There is no means of avoiding the final collapse of a boom brought
> about by credit expansion. The alternative is only whether the crises
> should come sooner as the result of a voluntary abandonment of further
> credit expansion, or later as a final and total catastrophe of the
> currency system involved."
>
> The problem is that it might encourage other currencies into a competitive
> devaluation. I still think the dollar will devalue.
>
> On Jun 11 11:39 AM Michael Young wrote:

Eurozone's March PMI Hovers Near February Lows

The Europeans would rather see company profits fall, unemployment rise, and asset values fall, rather than damage the Euro value with inflationary moves. Lets see who is right in time.The Germans or the US. The £ is dead meat while Brown remains in power.

Global Economic Revival Plan Must Include Realignment of Exchange Rates

I agree- but all major currencies competitively devaluating to save their skins, including now the Swiss, and so we will get no trade as Lok Hang So says, and as I see it a deflationary spiral, as no-one will move to stop it.



On Mar 12 04:18 PM Tom E. wrote:

> Rigging currency is not free trade.

In This Global Depression, Gold Is a Safe Haven

The price of gold relates more to psychological factors than its actual use.
These factors are subjective and irrational based largely on fear and speculation. This is not to say that the price of gold will not go up despite deflation, or that it may go down. Noboday knows other than if enough people buy it then a rise in price will be self fulfilling. In inflation it will hold its own against currencies but then so will lots of other alternatives
in commodities and stocks. As a word of warning most States in trouble are selling their gold and foreign currency reserves to support their own economies. There is not the remotest possibility that countries will return to the Gold Standard so what worth does it have for States to hold other than as a speculation?

Greenback's Slumped on the Canvas

when England ruled the world it had no middle class. the masses did as they were bid and were rewarded. It was a command economy. just like China today.

Return of Weimar Monetary Policies?

Re Attila's email.
I should think McCain could do a good resemblance as a warmonger and Obama as bleeding heart both printing money to serve their ends. Either way we will get inflation and this is the route the US have used to solve their debt problems ever since they forced the world off the gold standard in the 1973/4 crash,which suited other Governments also.
The big question is what do you invest in to counter raging inflation?
Cigarette makers and cheap food stocks used to be the answer. What now?anyone got an answers?