tag:blogger.com,1999:blog-2121490237517462736.post5794473602904950867..comments2024-02-20T01:52:53.299-08:00Comments on Futronomics: contrarian analysis of global macro trends, commodities, currencies, equities: Technical Update 36.09Matt Stileshttp://www.blogger.com/profile/17977694389453612864noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-2121490237517462736.post-79890359339582878462009-09-22T11:48:50.925-07:002009-09-22T11:48:50.925-07:00willy2,
regarding USD, I think if you follow this...willy2,<br /><br />regarding USD, I think if you follow this argument, it will be easy to come to the conclusion that it should rally.<br /><br />1. US monetary system is credit-based, as Matt explained above. If the Fed ever tries anything too funny, the credit market is going to crash. Effectively a suicide for the Fed. Japan can be referred to as an example. Hyperinflation? It will make no sense to have banks in such a condition (what's the point of saving money deposits?) If it's up to the Fed (it's NOT, but let's assume so), they will choose deflation over hyperinflation. Hyperinflation = death for all banks & the Fed itself.<br /><br />2. everyone and their mother is short the dollar (by being drowned in an ocean of debt -- for risky ventures). at some point, the society as a whole comes to a point of recognition that those debts are not going to be feasible to be serviced. there just isn't enough productivity to service those debts. what comes next is this huge margin call -- everyone scrambling for dollars to repay debt.Roger Jnoreply@blogger.comtag:blogger.com,1999:blog-2121490237517462736.post-3171799768903730952009-09-22T11:33:30.096-07:002009-09-22T11:33:30.096-07:00LOL. With those guys turning bullish, is there any...LOL. With those guys turning bullish, is there anyone bearish left that still has some access to popular media? In the blogosphere, there are still quite a number of them although they are losing popularity quickly. I noticed some excellent TA blogs are getting much less correspondence, some examples are Kenny's & Daneric's.<br /><br />Hugh Hendry hasn't got any interview since July, I think. Who else is left? Gary Shilling, maybe... but he's lost popularity since long ago and he's a permabear anyways. <br /><br />It just feels all of these is setting up for a humongous blow up. In previous crashes, there was huge dislocation between currency, commodity, treasury & stock markets. Right now, the main dislocation is in the treasuries. It's strong despite the rally in other risk assets. <br /><br />It's been very painful for the bears, while their stance is logical. I can imagine how much more painful it will be for the bulls when all this thing ends.Roger Jnoreply@blogger.comtag:blogger.com,1999:blog-2121490237517462736.post-3309654632258650602009-09-22T11:29:45.530-07:002009-09-22T11:29:45.530-07:00I've always followed the markets but didn'...I've always followed the markets but didn't start following them on a daily basis until August 2007, and feel like I don't know how to be bullish (except for gold) given how my early time period was influenced by the complete unraveling of the financial system. While I became less bearish last winter, I never turned bullish and have been superbearish since early June.<br /><br />I find it very scary for the future of our country that a small group of financiers and politicians can have so much influence over the fate of our economy, and ultimately the future of our entire country.Unknownhttps://www.blogger.com/profile/10913988994660387610noreply@blogger.comtag:blogger.com,1999:blog-2121490237517462736.post-77365615975888592792009-09-22T10:31:29.029-07:002009-09-22T10:31:29.029-07:00I think there's another danger for the e.g. FE...I think there's another danger for the e.g. FED. In the US the FED monetized debt (toxic assets) in order to keep the economy afloat. But isn't the FED by doing so in danger of blowing up as well ? Sooner or later the FED will have to mark to market those toxic assets as well or IMO face a confidence crisis. And in both cases that - IMO - will lead to a collapse of the USD. (Presuming other countries will do better than the US).<br /><br />On the topic Bears v.s Bulls: Bob Hoye made some very interesting comments. He thinks that when the EUR/USD or XEU goes down then the bulls are in trouble.<br />Source: <a href="http://www.howestreet.com/audio/bobhoye_2009_0918.mp3" rel="nofollow">www.Howestreet.com</a> (Audioclip)<br /><br />When I look at <a href="http://dshort.com/charts/bears/four-bears-large.gif" rel="nofollow">this graph</a> there hasn't been a capitulation by investors yet but the graph suggests markets are extremely overbought. Take a good look at the graph ! Source: http://dshort.com.Willy2noreply@blogger.comtag:blogger.com,1999:blog-2121490237517462736.post-65831287054628026342009-09-22T09:38:05.326-07:002009-09-22T09:38:05.326-07:00Faber, Grant and Bernstein have all turned bullish...Faber, Grant and Bernstein have all turned bullish this week. <br /><br />Various other bloggers and bearish newsletter writers I know have seen massive declines in readers and subscriptions of late. It's almost as if they don't have a choice. <br /><br />It reminds me of something I was told as I first got involved in the markets years ago: "Being bearish is a bad career move." <br /><br />Ironically, that guy is no longer working in the industry.Matt Stileshttps://www.blogger.com/profile/17977694389453612864noreply@blogger.comtag:blogger.com,1999:blog-2121490237517462736.post-2258520041747528222009-09-22T07:00:52.756-07:002009-09-22T07:00:52.756-07:00Matt,
Guess who's the latest addition to the ...Matt,<br /><br />Guess who's the latest addition to the bull bandwagon. None less than MARC FABER. This is just the wildest bear turned bull occurence I can think of -- doesn't mean that it can't go crazier, though.<br /><br />Talk about sentiments at extremes there... USD bulls right now only stands at 3%. Might have to go to 0.5% to reverse? LOL.<br /><br />http://finance.yahoo.com/tech-ticker/article/338419/Buy-Stocks-Because-U.S.-Dollars-Will-Be-%22Worthless%22-Says-Faber?tickers=fcx,gld,nem,chk,ng,xom,pfeRoger Jnoreply@blogger.comtag:blogger.com,1999:blog-2121490237517462736.post-28121282417717023762009-09-22T05:52:45.969-07:002009-09-22T05:52:45.969-07:00Willy,
Yes. It is credit marked to market that ...Willy, <br /><br />Yes. It is credit marked to market that is of primary importance. Unrealized credit losses are just as deflationary as realized ones. <br /><br />Zimbabwe had almost no credit creation mechanism. They were strictly a fiat paper currency system. Under this situation it is possible (even inevitable) that hyperinflation will result from monetary printing. In the West, we have credit based currencies. The amount of paper is a fraction of credit outstanding. And it becomes ridiculously small if derivatives (and other cash equivalents) are also considered. <br /><br />If someone starts talking Zimbabwe analogies with the west, I stop listening.Matt Stileshttps://www.blogger.com/profile/17977694389453612864noreply@blogger.comtag:blogger.com,1999:blog-2121490237517462736.post-31725709986413371382009-09-21T16:02:39.064-07:002009-09-21T16:02:39.064-07:00I want to chime in on the topic of the discussion ...I want to chime in on the topic of the discussion of Inflation vs. Deflation.<br /><br />My opinion is this: As long as the FED (or the ECB, BoE, BoJ, RBA or BoC) are printing money at a SMALLER rate than the destruction of credit(/money) (hyper-)inflation doesn't stand a chance to rear its ugly head.<br /><br />Everyone who is pointing to Zimbabwe is overlooking one crucial point: it took Zimbabwe EIGHT years to create hyperinflation, EIGHT years to wipe out/overwhelm the amount of outstanding credit. And that overwhelming of the outstanding credit lead IMO - in the long run - to Hyper-inflation.Willy2noreply@blogger.com