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View Full Version : Call this a crisis? Just wait



mick silver
31st October 2008, 22:28
(Fortune Magazine) -- Staring into the abyss always focuses the mind, which can help you avoid falling in. So let's take a look at the potential catastrophe that awaits us once we survive our current crisis.

At the dawn of the 21st century the U.S. had $5.7 trillion in total debt. As we approach the end of George W. Bush's presidency only eight years later, that sum has nearly doubled, thanks to war costs, tax cuts, spending increases, expanded entitlement programs, and now a welter of government bailouts and rescues.

This year was particularly bad. The federal budget deficit for fiscal 2008 hit $455 billion, up from $162 billion last year. That figure does not include the cost of the Emergency Economic Stabilization Act of 2008, which has an initial pricetag in the hundreds of billions of dollars. In fairness, some of that money presumably will come back to the Treasury, since the new rescue-related sums will be used to acquire preferred stock, mortgages, and other assets that someday could be sold at a profit.

Yet any such calculations are penny ante compared with the fiscal disaster that is bearing down on America. It's no longer an event in the misty future. It officially began earlier this year when teacher Kathleen Casey-Kirschling of Maryland became the first baby-boom retiree to collect Social Security benefits. She will be followed by about 78 million more boomers over the next 17 years
http://money.cnn.com/2008/10/28/magazines/fortune/babyboomcrisis_walker.fortune/index.htm?postversion=2008103010

hihosilver
31st October 2008, 23:50
personally i think that we need to watch consumer sentiment. As low as it is would indicate we are not in recovery mode and things have not shook out yet for general markets and economy. I could be wrong but until there is an indication that consumers are confident one should prepare for a downward trend. The markets are fake from where i stand. Countries are playing for position and there will be winners and losers.

But the consumers make like 70% of GDP, that should be a signal for short term strategie's in general. That does not mean that you cannot make money in a specific investment. But i am not smart enough to do that and i need to weigh in on the overall moods as a gauge.

For me it is to invest in food, necessaries, and pm's along with emergency cash at hand for a mid term period. I will probably be debunked on this, but deflation is going to happen before inflation. No demand means no market means no sales means lower prices to turn a cash flow.

mark2112gum
1st November 2008, 14:50
I feel that deflation is already here, look at most stocks, there price has been chopped in half (if not more). ei Microsoft - healthy company with no debt has a value half of what it was 4 months ago.

As for inflation, it'll probably start occurring in 4 or 6 month (just before its time to work on that tan).

Tribal Warrior
1st November 2008, 15:01
I feel that deflation is already here, look at most stocks, there price has been chopped in half (if not more). ei Microsoft - healthy company with no debt has a value half of what it was 4 months ago.

As for inflation, it'll probably start occurring in 4 or 6 month (just before its time to work on that tan).

Might be 2 to 3 months, if there is an attack on Iran. That'd shoot Oil prices through the roof. What would that mean for inflation? :cool: Nobody is going to buy a big tv that currently cost $500 for $2000. LOL Or a car that cost 20k for 35k. LOL An attack on Iran seems to me would kill global demand of oil.

research24
1st November 2008, 15:06
I'll make a prediction here that you will see the Dow at 6500 by April, 4,500 by October and 1,400 by October 2010.

The basis of that prediction is that it is the same percentages as 1929 -1933 as the Dow lost 89% from 1929. I think our situation is much worse today than then, so I'm being very generous, IMHO. Back then there almost no national debt, a trade surplus and no $62 trillion of hopeless derivatives and banks weren't levered 40:1.

garydrumm
1st November 2008, 19:59
I'll make a prediction here that you will see the Dow at 6500 by April, 4,500 by October and 1,400 by October 2010.

The basis of that prediction is that it is the same percentages as 1929 -1933 as the Dow lost 89% from 1929. I think our situation is much worse today than then, so I'm being very generous, IMHO. Back then there almost no national debt, a trade surplus and no $62 trillion of hopeless derivatives and banks weren't levered 40:1.

Research, I've had my disagreements with you, but I fear that you be pretty close on this. Add to this a populist/socialist President and Congress who will tax the middle class into poverty, and I think you predictions happen even more quickly.

FedFixNix
1st November 2008, 21:51
I'll make a prediction here that you will see the Dow at 6500 by April, 4,500 by October and 1,400 by October 2010.

The basis of that prediction is that it is the same percentages as 1929 -1933 as the Dow lost 89% from 1929. I think our situation is much worse today than then, so I'm being very generous, IMHO. Back then there almost no national debt, a trade surplus and no $62 trillion of hopeless derivatives and banks weren't levered 40:1.

That's about right, I'd say. Of course the eternal Joker in the Deck is the Fed and its G7 sisters, IMF etc. and the governments they control (including the USA). Their decisions are sovereign, and reign supreme. At least that is true as long as we give them that power over us.

xlr8
2nd November 2008, 17:50
Along with this prediction, what do you think the price of gold and silver will do?

Will it follow the dow downward?



I'll make a prediction here that you will see the Dow at 6500 by April, 4,500 by October and 1,400 by October 2010.

The basis of that prediction is that it is the same percentages as 1929 -1933 as the Dow lost 89% from 1929. I think our situation is much worse today than then, so I'm being very generous, IMHO. Back then there almost no national debt, a trade surplus and no $62 trillion of hopeless derivatives and banks weren't levered 40:1.