RE: [RT] Fw: Q Ratio Signals Horrific Market Bottom

[Gene Pope <gene@xxxxxxxxxxxxx>]

Jim,

 

Schiff’s point exactly. When the world looks at us like we look at GM, watch out.

 

Public works didn’t quite hack it last time. It took a war effort to make enough “lots of stuff”. And that stuff didn’t have to be “bought” per se. It was “disposed of”. What we need is truly “something new” that everyone’s gotta have. It could be connected with energy efficiency. A Manhattan Project or Moon Shot (equivalent in terms of focus) would be ideal. Whatever it is, it’s going to take a lot of imagination.

 

Regards,
Gene

 

From: realtraders@xxxxxxxxxxxxxxx [mailto:realtraders@xxxxxxxxxxxxxxx] On Behalf Of Jim White
Sent: Wednesday, December 10, 2008 2:24 PM
To: realtraders@xxxxxxxxxxxxxxx
Subject: Re: [RT] Fw: Q Ratio Signals Horrific Market Bottom

 



Gene,

Your fears are well founded. What happens when no one can buy or refuses to buy treasures?

The only real answer is to increase production of real assets. The conversion of human energy to real goods is the only way to add real money to the system. Unfortunately the demographics in the US and Europe do not support an increase in consumption until about 2015. So the wages provided by the public works projects being proposed are not sufficient to pull us out of the dilemma unless they are much larger and longer than currently thought. The only other answer is the emergence of new technology - perhaps nanotech or energy conversion. That could stimulate another production bubble sufficient to bail us out.

Another potential remedy is a massive immigration of young consumer oriented individuals. Perhaps we can provide incentives to import millions of young people from China and India, putting them to work building energy and housing infrastructure and building cars in Detroit.

 

Jim

----- Original Message -----

From: Gene Pope

To: realtraders@xxxxxxxxxxxxxxx

Sent: Wednesday, December 10, 2008 10:44 AM

Subject: RE: [RT] Fw: Q Ratio Signals Horrific Market Bottom

 

I have to say that this amazing confluence of negativity strikes me as one of either two things: A) Sobering, or B) An internet-age substitute for the “End is Near” walking signs that showed up in so many cartoons when I was a kid.

FWIW, here is none other than Taleb (Black Swan) and Mandelbrot (no intro necessary) on Jim Lehrer Newshour this October:

http://www.pbs.org/newshour/video/module.html?mod=0&pkg=21102008&seg=5

If you really want to get jumpy, here’s Peter Schiff, who predicted the current conditions 2 years ago, and was summarily dismissed and ridiculed then… not any more. His interview begins 1 minute and 50 seconds into this video:

http://www.cnbc.com/id/15840232?video=935047784&play=1

When we contemplate what could actually cause such a collapse, I have a theory. It’s not pretty. I can’t help wondering if we’re entering one final “bubble”, and that is a Treasury bubble. The world is busy snapping up newly issued (and pre-issued) Treasuries like potato chips. It doesn’t really matter what the interest rate is, it’s still a loan. As the world “overshoots” into Treasuries, I still cannot quite get my hands around the notion of how all this is going to get paid off. I’m aware that our national debt to GDP ratio reached something like 20% in the Great Depression, but that was partially (or even mostly) funding the war effort. There is no such cause to focus on today.

It’s also of note that most of the historically large bank crashes were caused by…. surprise… over-leverage and real estate bubbles. But this confluence of government ponzi schemes, global recession, and extreme national debt. It makes me nervous.

Regards,

Gene

From: realtraders@xxxxxxxxxxxxxxx [mailto:realtraders@xxxxxxxxxxxxxxx] On Behalf Of Jim White
Sent: Wednesday, December 10, 2008 11:19 AM
To: realtraders@xxxxxxxxxxxxxxx
Subject: Re: [RT] Fw: Q Ratio Signals Horrific Market Bottom



Before the trough in 2014, investors are likely to see a so- called bear
> market rally for the next two years as central bank actions delay the
> onset of deflation, Napier said.

This agrees with Harry Dent's projection of a high in mid to late 2009 before the plunge. Armstrong calls for March 2009 for a high.

Jim

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