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Currency Currents update by Black Swan Capital
Via Yves Lamoureux at Blackmont Capital
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Dollar taking a dive
good articles; good articles 4 slow news day ..http://www..
hat tip: finance news & finance opinions
“Perhaps this is because of my own prejudices as a former bond?markets trader, but the pessimistic minority seemed much more experienced and literate to me. They were also generally a lot more senior. That might not mean much but it does suggest to me that there is a risk of bad news in the future causing a stampede of pessimism. Of course the majority is not necessarily wrong (in spite of the claims of contrarians, who paradoxically enough include nearly everyone, it seems), but the volatility impact of information that confounds their expectations is much greater than that of information that reinforces their expectations.”
Been ranting about this for years. There is an entire generation of investors, and this includes fund managers etc, who've lived their entire lives and worked their entire careers in an environment where the Fed "had their backs" and all it took to be a stock market genius was buying stocks. Everybody did TA so TA worked, making them (appear) doubly genius. These people are the NCOs and O-6's of the investing world, and the generals and above are too damned busy politicking and backbiting to actually lead the organization, set policy, conduct meangful reviews, impart wisdom, etc.
The paradigm of "Don't Bet Against The Fed" is immutably ingrained in their very souls. Ahhh, the power of belief.
This paradigm is also why I have always seen this crisis as primarily a political event. Otherwise-intelligent people cling to this paradigm because it gives them comfort and because it has always been true. Breaking this paradigm means revealing central banking to be the fraud that it is. That revelation will be, and is being, opposed with every trick that can be mustered. Why? Because central banking is the central supporting structure of modern massive government, and revealing central banking to be a fraud means revealing modern government to be incompetent and incapable of "managing the economy". And oh what a time we'll have when THAT is revealed.
The problem of course is that being "right" could take another 3 decades...
Hopefully by 2016, but Ill be happy if it happens in my lifetime.
I will not underestimate the people in power's ability to stay there.
'Because central banking is the central supporting structure of modern massive government, and revealing central banking to be a fraud means revealing modern government to be incompetent and incapable of "managing the economy". And oh what a time we'll have when THAT is revealed.'
awesome comment
I, for one, welcome urban guerrilla warfare
Thank you for stating this so eloquently. Tyler does a great job here. But readers with insightful comments like yours that makes this site so useful.
George Orwell
Many "experienced and literate" people still have to learn that just because the real economy is in a rotten state (and getting worse everyday) doesn't mean that the market(s) will go down nominally. Things have been going downhill at least since the 80's when America decided to opt for a FIRE economy, yet the stock market has had it's biggest gains since then. Or if you wish to go even further, then stocks have performed brilliantly since the Fed was founded in 1913 (when it REALLY started to go downhill BTW), but really is it that the stock market has risen or is it that the dollar has lost 95% of its purchasing power? What we think of as "growth" today is just an illusion created by the constantly depreciating fiat money units in which growth is measured. It is like measuring the length of something using a scale that keeps on getting smaller - everytime you measure it, it will have become "longer".
1. Gold is $950/ozt. What was it in 1913?
2. Things have really gone haywire since the big US (and other govts) lost their purpose when the Soviet Union collapsed. Supposedly we bankrupted them, but not ourselves. Enter derivatives as savior circa 1987. The rest will be chronicled as history.
Brilliant, simply brilliant.
Apocalypse Now , my good man; a book recommendation you might find interesting. I dont know if you read it or not, but it is a fantastic piece of thinking.
http://www.scribd.com/doc/18755463/Gods-Equation-Einstein-and-Relativity
and
http://www.scribd.com/doc/18436557/FOUR-LAWS-THAT-DRIVE-THE-UNIVERSE
enjoy
Thanks, just finishing reading the Kant piece on perpetual peace, I'll definitely review.
I can appreciate and hold in my mind the sheer magnitude of the universe from the microscopic to the telescopic. A long term investor means something different when considering 13.8 billion light years across. It would take 138 million Cheeky's living to 100 years old flying on a flashlight at the speed of light and passing off the flashlight to cross the Universe. To the untrained eye it might look like chaos, but the principles and design are the same and function like a fine clock. I marvel at E=Mc2, and think it applies to economics - sunspots have an impact on earth production and GDP is of course correlated to energy consumption, which is why oil is so important to the economy - higher E = higher M (stuff).
Here's a quote you would appreciate Cheeky, from Sam Adams:
If ye love wealth greater than liberty, the tranquility of servitude greater than the animating contest for freedom, go home from us in peace. We seek not your counsel, nor your arms. Crouch down and lick the hand that feeds you; and may posterity forget that ye were our countrymen.
Belief. Textbook followers. Roman Catholic Church.
Although you are right, the timing could be off by say, 2000 years.
Better to not bet against belief; just trade around it if you feel the need:)
Yeah too true. There a whole host of people out there who only know 1982-2007 bull market for stocks, during which the S&P went from 100 odd to 1576. They base all their products and assumption on this time period. They think it's the norm, but in reality a 15 fold rise is more likely to be an abnormality. I wonder how differently these people would think if they had grown up in Japan during the same period?
be glad, more money for one to take should they be right on the trade against them, makes for a way to make a good living.
looks like the tape is marching toward Dow 14,000 as the bulls are so confident. nowhere but to go up and keep buying the dips. no stopping the bull market as expectations keep getting pushed further into the future. y'all know, that money on sidelines must be massive. 401k plans announce approx record deposits. "inverted tips".
are not the same folks that had to buy spy's two weeks ago on chines pmi, now telling all that the sell-off in china's equity markets don't matter.
Pettis is a great read. http://mpettis.com/
Bears are always more literate. That's because they obviously take the markets and the economy literally. As if based upon some fundamental eternal truth. The markets however are like life, they are an art, or a game, or both.
You can tell stories about the markets or you can play them. The former offers some small satisfactions, the latter Ferrari's, the Hamptons, and stick armed large breasted blonds. Take your pick.