benesposito

Is Hyperinflation on the Horizon?

Your focus on Gold "must" go up due to future hyperinflation mayb be correct but you are not looking at the reason such a thing would happen. Demand. There could be a bump up, but gold is only going to store if it is choosen to act as a reserve currency, or as a primary component in a basket of things acting as a new reserve currency. That may happen at some point, but it will be because of a "rule" change by central bankers. So calculating the time requires making a judgement and when and how those rules would be changed.

1987 Crash: 20th Anniversary of Black Monday

Barry, I just wanted to say I follow all your articles that are posted on Seeking Alpha and share many with several people. I ended up linking back to the "A Demon of Our Own Design" article and buying the book. I would have liked to have done the amazon click-thru, but I'm from Canada and the book list is on amazon.com only. It would be great if the list was also on amazon.ca. Just a thought.

The Realities of 2% Inflation

Good point.

Inflation Statistics Can Deceive You - Don't Trust Them

"A central bank's job is to manage the money supply." That's the job, but the job isn't its own reason. The reason for controlling inflation IS to target limiting the increase of cost-of-living. This is one of the things the FED is supposed to be doing as an institution of the people. Cutting out noise due to unstable supply and demand curves is one thing, but simply ignoring long term trends is idiotic. They should include some sort of long-term moving average. The total amount of the money supply utilized in food, fuel, and medical care is astronomical. That money has to come from somewhere. That amount has increased dramatically over the last 7-8 years, while measured inflation has remained stable (and low but NOT negative). Therefore the money supply must have increased dramatically to pay for these unstable curve shifts. Which means that inflation has been much higher than reported? hmmmm?

No Pain, No Gain: The Price Of Avoiding A Recession

Saying half the indicators are good and half are bad is a misleading snapshot... look at the trend... everything was good, now the bad is spreading continually. If the trend continues your strong economy indicators will continue to disappear. For the trend to reverse there would have to be something to cause that improvement... and if its out there, you're not doing a great job of convincing me of it.

Should We Beware 'The Hindenberg Omen'?

The Omen appeared in mid-June through early July a couple of times :)

Comparing Markets In 1987 And Today: Investors Are Now Better Protected

“Thus, conditions are not in place for a 1929- or 1987-style crash; rather, a more modest pullback is likely,” Mr. Gibson said.

Given that things remain that way. What happens if we see:

a) U.S. inflation rising
b) the Federal Reserve hiking interest rates
c) bond rates spiking

Because a) will lead to b) which can lead to c)
But just the market believing b) will come can cause c) and that seems possible in the future, given the fed's steady message on their primary concern, and the declining purchasing power of the USD.

What's Behind the Coming Market Crash?

What if all the people not investing in the market (i.e. media) are talking about a crash, while the people still making money in the market are all saying "Everyone talking about a crash makes that a contrarian indicator". If all the want-to-be bulls are calling that a contrarian indicator, maybe that means they are all wrong this time.

More Market Worries: 'The Only Three Questions That Count'

Look at the rate of change of opinion. Six months ago talk of subprime would have been ridiculed. The predictions of a fed cut went from 98% to 0% in two months this spring. Three months ago talk of subprime affecting the financing of M&As, or bond yields would have been laughed at. Now, granted, in the sort term a person would have lost out on potential gain in their portfolio through the same period of time. However, how much of a commitment to these things is warranted giving this swiftly tilting view? Given the rate at which information is distributed in society, and the 24 news channels need for rating grabbing headlines (like meltdown and crisis) these things can be over-hyped and talked to death without instantaneous gratification, but it doesn't make them merit-less. Anyone who's not a short seller should be disturbed by the trends...

So yes, they may be fully discounted. IF everything turns for the positive. And no, they aren't fully discounted if these particular problems lead to new problems. WHICH THEY HAVE BEEN. i.e. Subprime -> Hedge Fund -> who knows?

So the meaningful point is, do the problems continue to spread. The current trend indicates yes, but who knows? Maybe a month from now your telling us how everyone keeps talking about the Alt-A meltdown, so therefore, we're at a bottom.

Tops and Bottoms: Reflections and Predictions

Your logic about the contrarian argument will undoubtedly one day prove true. However, it will not neccessarily help you call a bottom.

"Right . . . smells like a bottom to me.

Is it today? Tomorrow? Next month? Who knows, but it is near."

I happen to think your argument about the subprime talk would be more akin to saying something like "stay out of fiber optic companies, but invest in other tech stocks" back in the .dom bubble.

I read recently that a poll conducted by the Boston Consulting Group showed 55 percent of Americans believe they could sell their house for more money now than a year ago.

Yet the trend shows increasing inventories of homes, and fewer potential buyers (mortgages becoming harder to obtain). While at the same time huge numbers of ARM loans are resetting.

So when the polls reflect the reality, and people all feel housing is a disaster (as it is for the builder's right now), then your logic might call for the actual bottom. In a year or two.

However, that said, your suggested investments get their value based upon homes being built, and if people thikning housing is a disaster, it may be longer from that contrarian indicator until the point when construction would actually pick up.