The Hype-inflation Cycle Has Begun You don't see it now (or yet) The employment will jump More disposable income spilling into the economy Companies will start to bid up the salaries The strikes will return to the news The real estate prices will rocket Auto sales will make new highs (but Detroit will remain where it is) The interest rate will go up earlier than expected, catching many people off guard The govt, in a historically proven vain attempt to control inflation, it will raise interest rate faster and more suddenly than anybody anticipated The more the interest rate go up, the higher the market will fly. The stock market will double the 2008 level before the cycle ends Everything you learned in Econ101 will go out of the window, this is a new game, with new rules, and new players He who sits on his pedestal will miss the boat, or lose the game Good luck
I especially like "the strikes will return to the news" . After the Fast food workers receving > 15Usd /hour the "Petroleum distribution engineers" pumping petro at your local Mobil station will seek $20/hour. People will drive round and round to empty the tank so they can fill up today rather than at tommorrows hyper inflated price of petro. And/or, the economy is so strong with full employment (roughly 4 percent), that the Worker once again can exert infationary wage pressure that hasnt been seen since the 90's. Pp p priceless! Carry on.
Wait until foreigners start actually imposing real lending standards and the petrodollar status is gone so Americans have to pay the actual market price for oil. What is going on right now is a pure mirage orchestrated by the Western banking cabal as they work to suppress gold and indoctrinate young people into thinking demand drives economies not supply, and that gold is a barbarous relic as opposed to the reality which is that it is always money (its value is that it stores value). The West has effectively pretended debt=wealth with all the financed consumption, whereas producer nations are accumulating surpluses. The inflation is already unleashed and a tsunami of USD is coming back to US shores eventually. Oil remains near $100/barrel despite the production gains in the U.S., thanks to both 0bama's anti-sovereignty, anti-capitalist agenda against Americans' taking advantage of the abundant natural resources with which we've been blessed, as well as the Fed with QE which leads to rising prices.
The Fed will lose control of the bond market and interest rates will skyrocket. Foreigners won't keep financing U.S. consumption because either they get paid back in worthless Federal Reserve Notes or don't get paid back at all (default). All kinds of exotic derivatives and the U.S. debt payments are predicated on ZIRP so that payments are low, and when rates rise it's game on because the stock of debt matters, too. Banks have only gotten bigger and there are fewer of them now.
Right. Markets don't usually go from hard charging bull to plummeting bear without plenty of fair warning. The ZH-crowd seems to think crashes come out of nowhere. Large crashes at least, never do. Anyways, if you believe the economy is inefficient, then you are welcome to underwrite the positions of all those clueless "econ 101" idiots who know nothing about markets. Put your money where your mouth is. All I know is more money has been lost predicting collapses, than has actually been made from collapses. Just buying gold the last year would've been a disaster.
It is not even just limited to economics this bubble that is being inflated right now. It's way beyond even just the indebtedness it induces, like with how home ownership levels keep decreasing as instead it's about 'affordable' teaser rates, vs. actually making a legit down payment. Included is the corporatism that is taking over as big corporations are on the dole as well benefitting from government programs and getting contracts, certainly with spying and Google and the NSA, but also subsidies and the health insurance companies getting guaranteed profits as only they can handle the compliance costs. Basically liberty is being ceded and it is becoming more and more Orwellian as more people join the ranks of those who don't bite the hand that feeds it, the state, and just vote for pols who are more than happy to give them free shit quid pro quo Chicago style in exchange for political loyalty/unions, etc. Wealth is being siphoned via the inflation to the elites and the middle class is being wiped out. Incentives to produce keep diminishing as earnings just get expropriated and all the red tape to go through as well. Owning physical precious metals and guns and long lasting food stuffs is a vote against this hellish system. And gold over time proves to preserve and enhance purchasing power. Just look at gold/oil ratios throughout history. Not saying its always a certain value but generally it oscillates w/o too much volatility.
Inflation leads to distorted valuations, some more glaring than others. Obviously certain sectors get more of the hot cash than others, like car loans and home loans, but cost of living keeps going up. I think like a trader and do a lot of TA and look for idiosyncratic edges to converge on candle charts, but I also am aware of what is going on in general. The shortage of physical gold is becoming more and more mainstream as far as exchanges' ability to deliver, and such an 'unlikely' event like a COMEX default (not at all 'unlikely' by conventional standards given the hard figures anyway) would be so catastrophic that it is just another example of why those who rely on models and are endeared to them and thinking they understand risk will get wiped out. They teach things like 'risk free rate' and what not, not telling of how it is taking huge inflationary policies like ZIRP and QE as well as foreigners funding consumption on the credit card, to keep bond prices elevated. I'm not a fool who is going to say on x day TSHTF but things are more and more fragile, no doubt. Whether it is notional level of derivatives predicated on rates staying low or the Germans or somebody getting pissed about not getting their gold repatriated, or kinetic military action, like maybe the Chinese retaliating against U.S. intervention in support of Japan with the island disputes by not funding U.S. consumption anymore, who knows. Stock mkt up doesn't equal economic health. It is probably as inverse as ever actually. The recent NFP figures tell the whole story about how they are trying to further their narrative of 'recovery'. Try putting in the same participation rate in the labor force as say even a few yrs ago and seeing what one gets, as well as delving deeper into what kinds of jobs are being created in terms of their nature and also FT or PT.
You worry about the future too much. Why not enjoy the present instead of stressing about something you can't control?