Can this be true people ? is the U.S.A doomed ?

[RobbieG]

Yup. That is what makes the trades so tough. We have started to form the opinion that the best opportunity for speculative actions are in the EUR/JPY cross and its volatility changes in response to the underlying factors driving the EUR/USD and USD/JPY crosses. There are just too many conflicts for appropriate biasing. Currency is tough in general without all this stuff going on. On the one hand it trends better than any other market when it is trending. However the mess that is the unregulated spot market comprising most of the liquidity is problematic for short term traders with its widening spreads on increased volume and constant news events. In other words, scalp trading is actually amzingly great in equities with all this volatility, but is harder than ever in currencies. By contrast the inverse of longer term trading being a nightmare in equities is not paired with a relative ease in currency to trade longer term as it usually is with solid news. Too many conflicts showing up as implied volatilty there too. I think Chief may be right to stay away from it. That said, I did stick a bunch of money in a Geneva account and convert it to Francs as a hedge for my personal dollars. I'm considering doing it with some Sterling and Yen too in the same fashion at the right price. Certainly not for speculation or any trade per se - just riding the fences in case of a short term disaster.

[rek001]

God, I'm drawn to this thread like someone watching an car accident site, afraid to read but I kepp coming back.

Everytime I read it I get anxious and depressed.

What can an average schlub investor such as myself do now? My retirement funds are invested in muni bonds (laddered), American family of funds, and a few stocks here and there.

Of course I've been absolutely hammered in the last year. I feel pretty defeated, and my broker doesn't have much to say either.

[HauteHippie]

The Dollar cannot fall under a certain point UNLESS the USA has a massive inflation or their economy collapses. Why? At a cerain point (as the dollar loses value), goods in the US will become so cheap that people from all over the world will buy there.

For Example, in the UK, a PS3 can be had for under 300Euro. You can order it on amazon.co.uk, have it shipped to Germany for 10Euro or so. In Germany you pay 400 for the same thing. Lots of people are buying things from the UK now. If the pound would lose further value, lets say you could buy the PS3 for 150Euro. That is not going to work for a long time, because all of a sudden noone will be willing to buy the PS3 in Germany (or any other Euro country), because they can get the same damn thing for 250Euro less in England and don't even have to pay taxes/tariffs.

There cannot be massive currency devaluation without massive inflation, at least not in an industry nation. And if we see massive inflation in the US, the Economy will go down for sure. And then we all will be affected by this.

The quintessence of what I wrote is, that there is a certain point until which the dollar can lose value, but no further, otherwise the world economy will be even more fcuked than it already is

Massive inflation is well under way here in the United States. And it will go hand in hand with a dollar devaluation. The monetary base has increased 70% year over year. That is inflation - an expansion in the money supply. But most of that has not yet hit circulation, which is why things still look deflationary. But that is only temporary; we're only at the tip of the iceberg. Dollars are going to be printed ad nauseam. Obama wants to put economic stimulus ahead of debt and is already proposing a worthless nearly $1T plan. The government has directly stated and shown that it will monetize anything and everything in an effort to stave off a depression, and buying worthless assets, giving money to banks, investment banks, car companies, mines, etc, etc. Where does it end? The moral hazard of bailing out car companies is that now they've essentially got to help other industries who might decide they're in dire need of billions. And the end result of all this printing - of all this turning of debt in to money - is going to be massive increases in goods prices. Commodities across the board are likely to see new highs. And this may not even happen until after wages have dropped during the deflationary bust, at which point they'll stagnate while capital goods prices skyrocket.

The world economy is not "[censored]" in a real sense like the US economy is (and most/many parts of EU). All the productive capacity around the world which generated the wealth that was loaned to the US is still intact. Once US consumers can finally no longer consume, the standard of living in China and elsewhere will actually go UP. They'll be able to consume. Currently, China is effectively subsidizing their exports at the expense of Chinese consumers. But when the ever increasing cost of those subsidies reaches a certain level - whatever that level is - it simply will not be in their best interest to continue it. And, of course, the lending capacity of China is finite. They can absorb the loses they've incurred and move on, though. And while it'll be painful, in the long run, they'll be better off.

Hyperinflation is not good for an economy no matter its positive effects on exports. Workers simply can't afford the goods they're selling in that scenario. Now, of course, the value of a currency never goes to literal zero. But what does happen is when it is seen heading inevitably in that direction, there is a massive run on the currency. It has happened to many world currencies, and it can happen to the dollar.

[RobbieG]

Yea, and any interested memebers reading this thread would do well to take a history lesson and learn about a trader named George Soros and how he wrecked the Sterling Pound once upon a time for great personal gain. The lesson being never say never. History is filled with thousands of key events that were previously thought to be impossible. Mix that with economists who literally believe that if you flip a coin you have a 50/50 chance of a head or tail on every toss...

Now, of course, the value of a currency never goes to literal zero. But what does happen is when it is seen heading inevitably in that direction, there is a massive run on the currency. It has happened to many world currencies, and it can happen to the dollar.

[Pugwash]

Yea, and any interested memebers reading this thread would do well to take a history lesson and learn about a trader named George Soros and how he wrecked the Sterling Pound once upon a time for great personal gain. The lesson being never say never. History is filled with thousands of key events that were previously thought to be impossible. Mix that with economists who literally believe that if you flip a coin you have a 50/50 chance of a head or tail on every toss...

And take into consideration that the current crisis is caused by the stupidity and arrogance of the financial market, you've as much chance guessing how to invest as you have following proper financial advice. Everyone that supposedly knows about finance, including banks etc., has either lost money through stupidity or had it conned out of them by a Ponzi scheme. The markets have been consistently wrong for two years and this is the result. Crooks and Liars rule the roost and it'll cost $700 billion to shut them up.

I'd avoid blindly following financial advice as those giving it have a vested interest in our taking it.

We're all screwed; some people will figure out how to make money out of that and we'll get more screwed.

We're not doomed, though. No need to take to the hills and stock up on canned goods just yet.

[Corgi]

Well if the internet says so it must be true!

[RobbieG]

Well this could turn into a whole other thread and I certainly don't have the inclination to go off on this tangent, but take this from a guy who makes his living in these markets:

The main reason why these items are newsworthy is because of the Wall Street lie that has been circluating forever. What do I mean by that? This: Major markets (at least the ones that the average investor are exposed to) are essentially perfect and there is no such thing as "knowing what you are doing" in this business in terms of appying superior intellect to help investors protect themselves from risk and make consistent returns. The problem is that 99% of investors are under the impression that there are actually guys who are smarter and they use past performance as a straight line measure to have faith in these people. The lie is that Wall Street makes a living by making you believe that they know something. They earn fees that way. God forbid he should ever tell the investor the truth which is that returns (or losses) are what they are and all we really do (or should do) is quantify and manage risk. What nobody can do is earn guaranteed returns, but they will do all in their power to keep you thinking that is what it is about. In our business, trading is about what I call omni-presence. Being available to catch a move long or short if - IF - it happens - which nobody knows when and to what degree it will. You take what comes and manage your risk.

If John Doe thinks I'm smart he gives me his money and I get a fee. Look, you can be trading just the 500 index futures as many of my funds do and manage risk way better than any so called "diversified portfolio". All relative. But instead they will have you believe things like what I call the diversification lie. Brokers would have you believe that by buying both a large cap index and a small cap index you are exposed to less risk. Yeah right, show me five days in your lifetime when the S&P500 went down and the Russell 2000 went up. Diversification is NOT risk management! Diversification of strategy exposure is more important than diversification across markets - unless they are truly non-coorolated. Stocks and bonds are NOT uncoorolated. They move opposite each other in tandem and by the same amount. What is the point of that? Hedging is not diversification.

It is about deciding how much to risk on each trade with stop management and exposing yourself to a variety of entries based on different market conditions. It isn't really complicated but in the short run, investors don't stand a chance betting only on rising prices. Mutual funds are about being long. Sure, the US big cap equities have a good track record since 1926 with a 10% annual gain uncompounded, but 1926? What about now. How people can be invested in mutual funds in ANY bear market and think it is newsworthy that they have lost 20/40/60% of their value baffles me. Of course you did. You are 100% long in a 100% short market. That anyone would think that diversification into different stocks or indices is going to help is just beyond me. Yeah, help the broker make a commish for the transactions. LOL. If you want to make money in the short run you have to trade both ways and never bet solely on a bunch of stuff all going up. People should buy some books and read and educate yourself as to the lie and how not to get trapped in it. Align yourself with a trader or traders who don't make a dime unless you do. Then you will be working with someone who's interests are truly aligned with yours. And guess what? When you find those guys you will find that not one of them buys and holds stuff long.

And the big houses - you wanna know what they do with thier own money and how it differs than what they do with yours? I'll tell you. They pick stocks and mutual funds for you to create transactions and commisions. They then take those commissions they made and trade them intellegently with risk management and complex long/short strategies now that it is their money in the back room. That isn't a conspiracy theory. It is a fact. Most of the money Goldman makes in a year on its books is from trading their own money. And that money becomes "their own money" from fees they collect from suckers. Sorry to be so brutal but that is the truth. And I'm not picking on GS. Every big house does the same thing. While you are hammered by 50% from their keeping you long, many of them have been trading your fees short to great success. I know a house right now (and I will not name their name) who manages client capital as stockbrokers. They are huge and you have all heard of them. I bet hundreds here probably have accounts with them even. Well they also have a proprietary trading operation that the "stockbroker" clients are not brought into (perfectly legal and ethical BTW - different biz unit) which has returned over 200% intraday trading Dow, Crude, and Metals futures in this crash. Meanwhile, their brokers are on the phone every day telling clients to "average down" (did you hear that? it was the sound of me spitting up puke in my mouth...) and buy bank stocks on the cheap. Look, this isn't bragging but trading times are good for a lot of us. The volatility has made big intraday moves we feed on. My alpha fund booked over 160% for the year, with 81% coming in just October. And I'm not riding high. Feet firmly on the ground It happens - and most importantly I have sense enough to know the market decided to pay us off and it wasn't me that created it. I just created a robust strategy that is based on omni-presence - and the big moves came, and came in droves. My systems are not designed to make money, they are designed to limite losses while being available for profits if the market gives them. Big difference. Maybe next year will be a typical 20-26% levered or even flat - or we might even lose 10% in a month or two. But I'll tell you what I won't be doing and that is buying and holding fundamentally sh*tty companies in bear markets because some broker tells me I should be OK by the time I'm 80 or that it is a "good value down here". I don't pick bottoms or tops. I don't "buy down" here. I buy contracts when the price is going up and I sell them when the price is going down but not before because I think something. I trade what is. Speculation is fine but without sound risk management is folley. We all look like a hero when we are right, but if you can't keep from going broke when you are wrong you won't be playing the game anymore. Common sense, but the masses don't do it for some reason. They just tell us at parties how during heydays how they bought some internet stock because they "knew" this internet thing was going to be big and they were right at made 400% in a year but they leave out the part about how they were 100% long in the Q's in December 2000 and went broke "averaging down", because these stocks were "such a great value at these levels...". I'm spitting puke in my mouth again. Those people didn't learn and did the same thing just now with the bank stocks. Rode them into the dirt, booked the loss and then bought more. You see the point. Just don't do it. Learn and grow and don't be a sucker anymore. We all have been at some point in our lives. I was for my whole 20's and part of my 30's. Big sucker. I bought actively managed mutal funds with big fees and loads even. Yuk...

And for the record, I'm not soliciting clients and I never will here or anywhere. I don't even trade for individuals - only institutions, but for God sakes listen to what I say in terms of educating yourself. I have no motivation to steer you wrong. Believe me. I'm happy to share the playbook that saved me from ruin and continues to pay me handsomely in all kinds of markets. It isn't that tough as long as it isn't important to you to "outsmart" the market. Just listen to what it tells you and you will be fine. You should read and learn about trading - maybe not so you can actively trade, but so you understand what the game is and how it is played at the highest levels. You will discover that there are no gurus and the whole thing with timing and picking is bullsh*t. There is no need. You should be able to make all you want trading indexes via ETFs. Thanks to some new products you don't even need to borrow with margin to short sell anymore. There are ETF's now which you can be short by being long. How cool is that? You may still need someone to help you, but once you know what the score is seek out someone to trade at your direction (or his if YOU like and agree with what he is doing). But please, make sure he effectively manages your risk and above all - DON'T PAY HIM A DIME UNLESS HE MAKES YOU MONEY. In my world, I earn or I don't eat. Wouldn't have it any other way. If my clients have a lean year I will too. And if we are ripping, I'm ripping too - like this year. Sermon over and I'm sorry I'm so passionate about this stuff but I just see so many people following lame advice and it makes me sick.

Oh, one more thing. There is a current running through media lately that seems to paint a picture that hedge funds are topping the losers list. To help you sort through that you have to consider the big picture which is quite simple. In order to trade both long and short, hedge funds use instruments such as futures contracts which require the trader to essentially post a bail bond known as margin. Mutal fund investors just use cash to buy stocks and options on stocks in the form of premium. Big difference. May of the hedge funds that the media is painting as failing are not failing at all strategy-wise. Their investors are getting scared by the media and putting in redemptions. These redemptions effect hedgies differently as they can't just exit the postions because one investor wants to get liquid. They have to make margin adjustments to keep positions open with less equity and this can ruin absolute returns creating a self fulfilling prophecy of failure at a rate sort of exponential as compared to a mutal fund who just sells stock for cash and nothing really changes. Keep in mind that this happens even in less troubled times as well. Just know that many of these so called "failing" hedge funds are "failing" with a flat to 5% loss for the year which for a big trader is not so bad really when the broad markets are off by half. You should also know that when the news reports on hedge funds they are only speaking of a narrow group of regualted funds and exlcude the thousands like mine that are unregulated and trade less money. We operate as private investment partnerships and really aren't "funds" at all. We fly under the radar so nobody really knows our numbers. But from my peers talking, most of us are doing very well this year. Anyway, again, educate yourselves and stop the madness of the Wall Street "knowledge" lie. There is knowledge in the ranks - but picking stocks and market timing aren't it. That just generates commissions and fees and fuels their own methodical and sane trading. And trust me, you want to get on that side of the fence...

The average short term trading hedge fund gained 6.13% for the year. Not bad at all considering...

Meanwhile the famed Fidelity Magellan Fund has lost a staggering 53% for the year...

PS: A market is never wrong Pug, it is ALWAYS right as it represents the true price as argued and won by a jury of its peers. And the ruling is down, down, down. The "wrong" in the equation is certain people consistently claiming that they have it all figured out enough to call a crash, rally, top, or bottom to the day, month, year, or hour. To that end I have never met anyone other than the market itself that was consistently "right" year after year.

And take into consideration that the current crisis is caused by the stupidity and arrogance of the financial market, you've as much chance guessing how to invest as you have following proper financial advice. Everyone that supposedly knows about finance, including banks etc., has either lost money through stupidity or had it conned out of them by a Ponzi scheme. The markets have been consistently wrong for two years and this is the result. Crooks and Liars rule the roost and it'll cost $700 billion to shut them up.

I'd avoid blindly following financial advice as those giving it have a vested interest in our taking it.

We're all screwed; some people will figure out how to make money out of that and we'll get more screwed.

We're not doomed, though. No need to take to the hills and stock up on canned goods just yet.

[2005SUBMARINER]

Holly cow i never expected such a big response to this thread , but i thank my rwg members for taking out the time & sharing there thoughts on this subject , further i want to say that i didnt know that guy on the video was a mega racist , i was just browsing youtube & viewed that video & viewed some other videos on CNN pertaining to the same subject ..

thanx again for all your imput dudes ..

i guess we just have to sit tight & watch & manage our funds much better & hope for the best ..

wish all the rwg members a rockin holiday man ..

[nikki6]

"Honestly I think the last thing that is going to happen to the USA is a merger with ANY country. The United States are way too proud of their history & their constitution and all that. I think most people would rather die fighting than giving up and merging with mexico.... unless of course america is 80% hispanic in 20years, than that scenario is a whole other story."

Heh heh, Americans too proud of their "history"!? That always cracks me up!! Lets be kinda honest and truthful here, Australia has more history!! lol

But seriously, that guy is a raving, frothing at the mouth looney!! I did feel the comment of 'spreading this fud around' was a bit harsh though! Not everyone is deep into politics or listens to idiotic radio shows! Did you see the other vid 2 along from it? It said Prince Charles ( the Prince of Wales dontcher know!?) is the Anti Christ!! Thats awesome! you really have to watch that one, I can't see the images, but the text is hilarious!!

Damit lost the link gimmie a sec.

[nikki6]

Ha found it! This is a corker!!

http://video.aol.com/video-detail/us-econo...2010/2683206226

[chronoluvvv]

Yea, and any interested memebers reading this thread would do well to take a history lesson and learn about a trader named George Soros and how he wrecked the Sterling Pound once upon a time for great personal gain.

weren't the volumes traded back in the 80s far lower than they are today, making it easier for someone to manipulate the exchange rate ? Soros went on to lose a major chunk of change later on speculating v/s the BoJ on the yen

[RobbieG]

The spot market is fundamentally flawed which is another discussion but yes, the liquidity now make it tougher to do without huge trade sizes and a very well orchestrated campain for sure. It would certainly take billions to pull off and so to that end it wouldn't be worth the risks really. But theoretically it can be done.

It isn't really manipulation though per se that can wreck things out - that is kind of a misnomer. I hate when Bear Stearns said they were the target of market manipulation when they wrecked out. They were fundamentally trashed and got shorted into the toilet because they were ripe to fall. Nothing new. But people had to take major risks in those trades and I say good for them for making the money. I don't trade individual equities but I did throw my algo on it in a back test to see what I would have done and I would have made a fortune shorting my signals too. It is what it is.

Sustained selling in any market or individual stock, currency can take it to zero fairly easily and liquidity isn't always protection for that. But keep in mind, the whole way down, there is always someone else taking the other side of the trade, other wise, there would be noone to sell to. I think a lot of people forget that sometimes. If someone is shorting, someone else is buying them. Market manipulation doesn't happen as much as people think and it is much tougher to do than just using size to create a self fulling prophecy which continues to fuel your own trades. Even small, orchestrated selling by program trading algos does it. Even little old me can see it happen from my trades in the S&P alot. I have multiple signals firing even in times of max liquidity and my 300-500 contract buys and sells in succession have people chasing me up or down. Kind of funny and you wouldn't think that could happen but it does. Just a couple weeks ago I remember one flat morning where my shorts started a sell off that ending up being 12 points afterall. If I can do that with a $5M account by accident really, what might happen if I kept pounding 500 lots into it all day every two minutes? But it isn't cut and dried of course. Meanwhile, other days I'm getting great long signals and shooting big orders in and she just smiles, sucks them up and procedes to sell of and whack my stops like I'm not even there...

Ah, Mother Market, that elusive evil temptress...

weren't the volumes traded back in the 80s far lower than they are today, making it easier for someone to manipulate the exchange rate ? Soros went on to lose a major chunk of change later on speculating v/s the BoJ on the yen

[chronoluvvv]

Considering how much the BoJ has thrown @ the US Dollar since 2002, i would say billions is an understatement

Yet they have their victories from the mid-90s to bank on so I'm sure its a matter of time before they do a slam-dunk all over again

[fat.tail.event]

Robbie asked me for some general comments on currency strategies we are seeing. They are all logical based on global events, but its expressing the trade where most of the magic is created. Unfortunately, I think mainly insitutions, FX desks will be the only entities truly able to express them most purely. First, be aware the currency markets are extraordinarly thin this time of year. But what usually occurs in latter Q4 has basically been happening all of Q4 and is expected to continue into Jan/beyond. So there have been extraordinary moves compounded with super thin liquidity. Quantitative easing has obviously wreaked havoc with technicals.

So some of the basic strategies out there....EUR is likely to stay more stable (not go ZIRP and not as much effect from QE)

The exact opposite for GBP and CHF...expect moves to ZIRP if necessary and debt monetization. So possibly long EURGBP (gravitate towards parity), EURCHF

Keep the commodity producers in mind for the short end of crosses. So a logical one would be EURAUD. NOK probably has more to fall given where oil is camping out.

Volatility will continue to reign supreme, so if FX options are available to you, set some wide strikes especially firm to the upside (long gamma). Most popular one I have heard range from 1.60 to 1.80 EURUSD for '09

The toxic combo of headline risk and low liquidity makes spot trading a very deadly game, IMO. So FX derivatives offer better risk management.

[HauteHippie]

Couldn't agree more re: EUR/GBP... UK GDP is at its lowest in almost 20 years, and '09 isn't going to be kind to the GBP. I can see EUR/GBP soaring to new highs. In fact I believe it hit an all-time high of about .95 just a couple weeks ago.

[Polynomial]

Couldn't agree more re: EUR/GBP... UK GDP is at its lowest in almost 20 years, and '09 isn't going to be kind to the GBP. I can see EUR/GBP soaring to new highs. In fact I believe it hit an all-time high of about .95 just a couple weeks ago.

Its .97 now

[fat.tail.event]

To be more on topic about the USD specifically, I always think this is always interesting to note. Ask a news anchor what the US 'deficit' is and they will talk about 1.5T. Ask a politician and they will say a figure about 10T. Ask a biased US academic/professor they might venture out as high as 20-40T. The underlying theme from them is that we are always A OK...dont worry about. Someone is worried about it though...the countries that essentially control USD reserves. They see things from a completely different lens.

12/19/2008

U.S. debt approaches insolvency; Chinese currency reserves at risk

Maurizio d'Orlando

In a few months, America's public debt has grown to more than 100% of GDP. Fear of a valuation crisis for the dollar, with tremendous consequences for Asian countries, major exporters to the United States.

Milan (AsiaNews) - In the United States, the danger of debt insolvency is growing, putting at risk the currency reserves of foreign countries, China chief among them. According to new figures published by Bloomberg in recent days (Nov. 25, 2008 [1]), the American government has employed a total of 8.549 trillion dollars to stop the financial crisis. This means a total of about 24-25.4 trillion dollars of direct or indirect public debt weighing on American taxpayers. The complete tally must also include the debt - about 5-6 trillion dollars - of Fannie Mae and Freddie Mac, which are now quasi-public companies, because 79.9% of their capital is controlled by a public entity, the Federal Housing Finance Agency, which manages them as a public conservatorship.

In 2007, public debt in the United States was 10.6 trillion dollars, compared to a GDP (gross domestic product) of 13.811 trillion dollars. Public debt in 2007 was therefore 76.75% of GDP. In just one year, direct and indirect public debt have grown to more than 100% of GDP, reaching 176.9% to 184.2%. These percentages exclude the debt guaranteed by policies underwritten by AIG, also nationalized, and liabilities for health spending (Medicaid and Medicare) and pensions (Social Security)[2]. By way of comparison, the Maastricht accords require member states of the European Union (EU) to reduce their public debt to no more than 60% of GDP. Again by way of comparison, in one of the EU countries with the largest public debt, Italy, public debt in 2007 was equal to 104% of GDP.

In 2007, 61.82% [3] of America's public debt was held by foreign investors, most of them Asian. So the U.S. public debt held by nonresident foreigners is equal to about 109.39% (113.86%) of GDP. According to a study by the International Monetary Fund, countries with more than 60% of their public debt held by nonresident foreigners run a high risk of currency crisis and insolvency, or debt default. On the historical level, there are no recent examples of countries with currencies valued at reserve status that have lapsed into public debt insolvency. There are also few or no precedents of such a vast and rapid expansion of public debt.

The United States also runs large deficits in its public balance sheet and balance of trade. Families and businesses are also deeply in debt: in 2007, American private debt was equal to a little more than 100% of GDP. At the moment, it is not clear how much of America's private debt has been "nationalized" with the recent bailouts.

In the early months of next year, when the official data are published, the United States will run a serious risk of insolvency. This would involve, in the first place, a valuation crisis for the dollar. After this, the United States could face a social crisis like that in Argentina in 2001. A crisis in U.S. public debt would likely have a severe impact on the Asian countries that are the main exporters to the United States, China first among them. Chinese monetary authorities, thanks to a steeply undervalued artificial exchange rate, by about 55%, have limited imports (including food) and have achieved an export surplus. This has allowed them to accumulate a large stockpile of dollar reserves. In a currency crisis, China risks losing much of the value of its accumulated currency reserves. At the same time, pressure on imports (wheat, other grains, and meat) have led to inflation in the prices of food, the most important expenditure for more than 900 million Chinese. This is nothing more than a small confirmation of the recent statements of the pope, in his message for the World Day for Peace, where the pontiff calls the current financial system and its methods "based upon very short-term thinking," without depth and breadth (nos. 10-12), preoccupied with creating wealth from nothing and leading the planet to its current disaster.

[promotersf]

Is it time to start buying gold?? I was with a couple buddies earlier in the week and they've been buying some gold bullion to hedge, a small amount of their portfolio...but it got me thinking...

[Shundi]

Is it time to start buying gold?? I was with a couple buddies earlier in the week and they've been buying some gold bullion to hedge, a small amount of their portfolio...but it got me thinking...

Yes

[fat.tail.event]

Is it time to start buying gold?? I was with a couple buddies earlier in the week and they've been buying some gold bullion to hedge, a small amount of their portfolio...but it got me thinking...

Your 'guy' at GoldMorganBarney wont mention this idea, but it is imperative to begin building a tangible asset components within personal holdings. My wife is considering doing some formal coursework in precious gemstones; so she just signed up to be the point person on that portfolio segment, and I am looking forward to it.

The cause/effect spectrum of this USD decline, US indebtedness, interventionsit posture will be large and varied, and no one can predict the future. But an interesting thing occured recently when S&P reconstituted the S&P500 index....about a handful of well-respected US companies made the decision to headquarter elsewhere (such as Switzerland), thus requiring their exclusion in the index. This is one of those 4th/5th ripple effects that will gain significant steam, in my opinion, as the USD weakens significantly and over-regulation becomes the norm. Yes, a 'declining' USD makes US goods cheaper for foreigners. But how about a straight-line, multi-year plummet? At what point to you stop doing business with a country/currency displaying those characteristics? Well, just one example... Dubai is gladly welcoming Wall St. and London corporate refugees. My take: Over the next decade multi-nationals will question the benefit of operating on US soil, go elsewhere, list on other exchanges, and eventually conduct capital markets activities off-Wall St. Think about the loss of corporate tax revenue to the US coming down the pike. It will be staggering. Right now about 45% of top line revenue among S&P 500 companies comes from overseas, and is climbing. So if you're a CEO/CFO sitting in NYC and 65% of your top line comes ex-US, and your assistant treasurer cant even figure out net earnings due to USD FX volatility, and you're choking on your 3rd iteration of SarbOx, or Basel 4, why put up with all of the BS NYSE/NASDAQ listing requirements (when half your shares are traded off the exchanges in dark pools anyhow)?

[Shundi]

Your 'guy' at GoldMorganBarney wont mention this idea, but it is imperative to begin building a tangible asset components within personal holdings.

Bingo.

My take: Over the next decade multi-nationals will question the benefit of operating on US soil, go elsewhere, list on other exchanges, and eventually conduct capital markets activities off-Wall St.

Agreed...look at what happened to manufacturing in this country! Companies are already finding it more profitable to conduct business in India or China or the Middle East or offshore islands due to the tax advantages and low wage/ high intellect/skillset of many potential employees... stuff like SO sounds great to the average American and makes sense from an ethical point of view but at the end of the day if you choke a business with taxes and rules to the point where they need to file 33 forms in triplicate to order a pencil.... the camel's back breaks and these corporations, much like lightening, seek the point of least resistance.

[fakemaster]

Were not doomed. Well at least not for another 6 days and 41 minutes.

[promotersf]

I've been out of the market for a long time holding dollars, but with my view that the dollar is on a downward trend, gonna pull the trigger and take some physical gold positions. This should be interesting...

[HauteHippie]

D - Too bad you didn't mention the interest earlier or I would have met up with you at the Hard Assets Investment Conference in S.F. a month or so ago...

[baglc1]

He's mad, padded room fodder.