Asylum Markets of the post FIRE Economy – Part I: Locked Up - Eric Janszen

[Jay]

Re: Asylum Markets of the post FIRE Economy – Part I: Locked Up - Eric Janszen

free advice [and worth every penny]: pick your target allocations and start moving in those directions in small steps [0.5-2.5% at a time] whenever you feel anxous about NOT being there, or can muster the nerve.

I came about halfway through the party, started lurking in 2006, have played it exactly this way, and it has been working for me. I keep taking slow to medium steps and reorganize every month or so.

[Jay]

Re: Asylum Markets of the post FIRE Economy – Part I: Locked Up - Eric Janszen

from what I can see ka-poom is happening.

the ka- already happened -
1. the deflation scare that forced
2. the FED, treasury, congress, president to take extra ordinary measures which
3. prevented a run-away, self-reinforcing / recursive deflation

we're just waiting for
4. very high inflation, short of hyperinflation


IMHO Maybe we'll get another ka-
when Bernanke thinks he can raise rates and we get another deflation scare

add: If there were to be another "ka-" (or maybe several) the final "poom" will be much worse.

I think most of the rate hike talk is jawboning no matter what has already occurred in Australia. Even when rates finally rise they will be chasing true inflation, and they will be playing catchup for while. Raising rates not only destroys what is left of the labor market, but also increases US debt servicing costs, which is not an insignificant factor. That is a perfect set up for gold. The Fed has been painted into a corner and is playing out the string as long as it can. Rates up and they are screwed; the self-reinforcing recovery is a hail mary pass, so debt will need to be monetized. We may actually get negative rates at some point and our creditors will eventually give up on us. I would think when push comes to shove an emergency meeting is called in secret between all the central banks and they reveal and enact, under threat of global meltdown, their plan. Even if you don't believe this mess is intentional, you have got to give some credence to the possibility of central banks sitting down and forming a currency system which is not necessarily friendly to the sovereign state. Look at the past actions of the IMF and all central banks, what do you think they do if the world economy is in a no-win pickle and comes to them hat in hand? It is not going to be good for Joe Six Pack. I think gold will do well in that environment, the only issue I have is how the central banks play it once the whole world is really in a bind. What do they do with gold? Will they let gold holders sit on their gains?

[jk]

Re: Asylum Markets of the post FIRE Economy – Part I: Locked Up - Eric Janszen

Me. I've been caught with my pants down on this mess. I built a big cash position from 2006 until now. Waiting. I have about 5% in pm, 20% in some combo of blue chips and multi-nationals (mostly my small business retirement account that has to be passively managed), 5% energy/agriculture and the rest cash (cds, short term tax free munis). Not a great spread. What should I have done? In the Ka I should have bought more metals and dare I say corporate bonds. So the result is those who came of this mind early and sit 30% pms feel pretty okay. I was so caught up in crash mode I missed the boat. I did buy paper gold, some energy and some more blue chips.

free advice [and worth every penny]: pick your target allocations and start moving in those directions in small steps [0.5-2.5% at a time] whenever you feel anxous about NOT being there, or can muster the nerve.

[goadam1]

Re: Asylum Markets of the post FIRE Economy – Part I: Locked Up - Eric Janszen

from what I can see ka-poom is happening.

the ka- already happened -
1. the deflation scare that forced
2. the FED, treasury, congress, president to take extra ordinary measures which
3. prevented a run-away, self-reinforcing / recursive deflation

we're just waiting for
4. very high inflation, short of hyperinflation


IMHO Maybe we'll get another ka-
when Bernanke thinks he can raise rates and we get another deflation scare

add: If there were to be another "ka-" (or maybe several) the final "poom" will be much worse.

I have a feeling poom might be relative. We are in a negative interest rate environment now. Plus taxes are going to be the real poom. I figure at least 10% more in taxes by 2012. So it doesn't take a high inflation rate from there to get poomie or into stagflation. We have $3 gas now and 10% unemployment. Imagine how crushing $4 gas would be or 7% mortgages or no zero money down for flat screens.

[goadam1]

Re: Asylum Markets of the post FIRE Economy – Part I: Locked Up - Eric Janszen

i agree, and it's a bit of a conundrum, trying to figure a relatively safe way to play what looks to be a period of sluggish economic growth, tottering along on a diet of stimulus and extend-and-pretend debt. the best i've been able to come up with is energy and agriculture- commodities which can benefit from growth, can get me out of the dollar into real assets, and benefit from emerging markets in particular. my target allocations [i'm not there yet and might revise these before i am] are currently 35-40% pm's, 20%energy, 10%agriculture, 10% em's/globals/multinationals, with the balance of 20-25% still in cash to be used opportunistically. you?

Me. I've been caught with my pants down on this mess. I built a big cash position from 2006 until now. Waiting. I have about 5% in pm, 20% in some combo of blue chips and multi-nationals (mostly my small business retirement account that has to be passively managed), 5% energy/agriculture and the rest cash (cds, short term tax free munis). Not a great spread. What should I have done? In the Ka I should have bought more metals and dare I say corporate bonds. So the result is those who came of this mind early and sit 30% pms feel pretty okay. I was so caught up in crash mode I missed the boat. I did buy paper gold, some energy and some more blue chips.

[MulaMan]

Re: Asylum Markets of the post FIRE Economy – Part I: Locked Up - Eric Janszen

Gold is one of the few private assets left that you can own. Period.

It is called private property. America was built on it but the retards have destroyed the concept of private property in America.

The civilized world will move on without America - Americans will be shocked.

The U.S.S.R ended with a fizzle, not a bang. Unless you lived there.

The U.S.A with also end with a fizzle, not a bang. There will be an American "Putin" - a criminal class that takes over the country and becomes uber rich while the rest of America realizes thier human potential and becomes the 3rd world nation it already is.

America is filled with retards and so retarded they will be.

Life expectancy in the U.S.A. will equal that of "modern" Russia.

The best "investment" you can currently make is to obtain citizenship in a civilized country and have an escape plan.

[Mega]

Re: Asylum Markets of the post FIRE Economy – Part I: Locked Up - Eric Janszen

So EJ, your a "Bit negative" on the £............Spill the beans......will it go belly up?.........£1 = $1.......?

Oh do tell.
Mike

[jk]

Re: Asylum Markets of the post FIRE Economy – Part I: Locked Up - Eric Janszen

Physical gold is a nice way to keep money out of the game. But it isn't enough.

i agree, and it's a bit of a conundrum, trying to figure a relatively safe way to play what looks to be a period of sluggish economic growth, tottering along on a diet of stimulus and extend-and-pretend debt. the best i've been able to come up with is energy and agriculture- commodities which can benefit from growth, can get me out of the dollar into real assets, and benefit from emerging markets in particular. my target allocations [i'm not there yet and might revise these before i am] are currently 35-40% pm's, 20%energy, 10%agriculture, 10% em's/globals/multinationals, with the balance of 20-25% still in cash to be used opportunistically. you?

[goadam1]

Re: Asylum Markets of the post FIRE Economy – Part I: Locked Up - Eric Janszen

what do you see as "another bubble cycle"? i didn't read it that way. what is the asset class that will be the beneficiary of this bubble?

Well, it' relative isn't it. EJ states we could be at s&p 700 but we are not, we are at a inflated or re-flated value. We will have to see what the nominal high for this cycle is. Plus my property is a little off it's bottom thanks to monetization and other fancy tools. Do we get growth? This article and a whole bunch of indicators say we will have growth. Will the growth exceed the debt needed to create it? Very doubtful. But the impact of not creating escape velocity is still to be determined. Meanwhile, there were a heck of a lot of bargains in stocks and bonds at the nominal lows during which we were discussing over shooting the mean, 20% unemployment and government implode

So I doubt the horrors of the next ka will be so scary either. The word won't end. People have faith and will to keep the system running. Physical gold is a nice way to keep money out of the game. But it isn't enough.

[Spartacus]

Re: Asylum Markets of the post FIRE Economy – Part I: Locked Up - Eric Janszen

from what I can see ka-poom is happening.

the ka- already happened -
1. the deflation scare that forced
2. the FED, treasury, congress, president to take extra ordinary measures which
3. prevented a run-away, self-reinforcing / recursive deflation

we're just waiting for
4. very high inflation, short of hyperinflation


IMHO Maybe we'll get another ka-
when Bernanke thinks he can raise rates and we get another deflation scare

add: If there were to be another "ka-" (or maybe several) the final "poom" will be much worse.

3. Is Ka-poom seeming less valid to you guys after this re-inflation cycle? Would Ka-poom need another couple of cycles to really happen? Or is Ka-poom just a variation on the bubble cycle?

[ThePythonicCow]

Re: Asylum Markets of the post FIRE Economy – Part I: Locked Up - Eric Janszen

Was Ka-poom really possible at this stage of the world and the global economy. It always seemed an outlier to me. A couple of more cycles, maybe?

I tend to agree with you here.

My take is that the POOM in KaPOOM could happen in the U.S., but only after the U.S. Dollar has been demoted from it's status as the World Reserve Currency. Then we could have a Ka and a POOM, just like an oversized Argentina.

For now, it's KaPLOP, where PLOP (I just made that up) means the Dollar loses its Reserve status. I expect the PLOP sometime in 2010 to 2012. I expect that Americans will be put under more stress first, likely with multiple threats, so that they "accept" their diminished role in world financial affairs.

[jk]

Re: Asylum Markets of the post FIRE Economy – Part I: Locked Up - Eric Janszen

Was Ka-poom really possible at this stage of the world and the global economy. It always seemed an outlier to me. A couple of more cycles, maybe?

But to go from ka-poom to essentially another bubble cycle with sovereign wealth as the bubble driver is a big shift. And if I were playing prognosticator, then I would be a little clearer on the change in concept. We were here, we thought it was going here, now we think it is going like this.

what do you see as "another bubble cycle"? i didn't read it that way. what is the asset class that will be the beneficiary of this bubble?

[goadam1]

Re: Asylum Markets of the post FIRE Economy – Part I: Locked Up - Eric Janszen

fwiw, my read is that kapoom is still possible at any time, but is now less likely to be the mechanism that triggers a sharp decline in the dollar. the more likely scenario, pace ej, is a period of stagflation and dollar weakness, followed by an inflationary crisis and recession, triggering a faster devaluation of the dollar.

Was Ka-poom really possible at this stage of the world and the global economy. It always seemed an outlier to me. A couple of more cycles, maybe?

But to go from ka-poom to essentially another bubble cycle with sovereign wealth as the bubble driver is a big shift. And if I were playing prognosticator, then I would be a little clearer on the change in concept. We were here, we thought it was going here, now we think it is going like this.

[jk]

Re: Asylum Markets of the post FIRE Economy – Part I: Locked Up - Eric Janszen

You have to admit there is a bit of confusing sheepishness in this one.

1. Are you admitting to a bit of American exceptionalism?

2. Are making a call that re-inflation will work at least until the next Presidential cycle?

3. Is Ka-poom seeming less valid to you guys after this re-inflation cycle? Would Ka-poom need another couple of cycles to really happen? Or is Ka-poom just a variation on the bubble cycle?

I for one think there is value to be found at the bottom of cycles, when others panic. But as an Ituliper I got caught up in the Ka-poom and first bounce ideas. You guys seem to be backing away from those calls but in a muddled manner. Or do I have it wrong?

I'll agree that a black swan debt crisis hangs over all of us and 2012 to 2013 is as good a call for another bubble top. But traveling from your 2009 year end wrap up to this post I am a bit lost.

fwiw, my read is that kapoom is still possible at any time, but is now less likely to be the mechanism that triggers a sharp decline in the dollar. the more likely scenario, pace ej, is a period of stagflation and dollar weakness, followed by an inflationary crisis and recession, triggering a faster devaluation of the dollar.

[goadam1]

Re: Asylum Markets of the post FIRE Economy – Part I: Locked Up - Eric Janszen

We have never, ever, even once forecast hyperinflation. High inflation, yes. Hyperinflation, never. Collapsing dollar? Never. Falling dollar, repeatedly since 1998.



There is an entire thread documenting instances of this type of inflation here: Inflation snapshots: December 2009

You have to admit there is a bit of confusing sheepishness in this one.

1. Are you admitting to a bit of American exceptionalism?

2. Are making a call that re-inflation will work at least until the next Presidential cycle?

3. Is Ka-poom seeming less valid to you guys after this re-inflation cycle? Would Ka-poom need another couple of cycles to really happen? Or is Ka-poom just a variation on the bubble cycle?

I for one think there is value to be found at the bottom of cycles, when others panic. But as an Ituliper I got caught up in the Ka-poom and first bounce ideas. You guys seem to be backing away from those calls but in a muddled manner. Or do I have it wrong?

I'll agree that a black swan debt crisis hangs over all of us and 2012 to 2013 is as good a call for another bubble top. But traveling from your 2009 year end wrap up to this post I am a bit lost.