We're headed for a Great Depression, imo. The numbers don't lie. Realistically, the only growth technology that can save us has to rewrite the laws of physics to deliver enough horsepower to absorb the debt. I think Free Energy could do it. Whether we get it in the next 4 years? I doubt it. There's not one consumable product I can think of that can't be made anywhere, but America. Why wouldn't that be true for the next useless bobble or trinket nobody needs? Faber posits War more as a distraction, than anything else. People conflate war as the cure for Depression as WW2 coincided nicely with the abandonment of the gold standard. When America ditched the Gold standard (largely) in '35, credit flowed back into the economy, and conditions improved. Not to say the FED didn't play a huge role as they withheld gold reserves from commercial banks, thereby, strangling desperately sought after business credit. Anyway, that's another story. I agree that everything has gone ponzi, and we're in serious, serious trouble. People don't get it. And that's the only thing that's keeping this thing afloat. Ignorance and the printing press.
The system is so messed up. i'm trying to prepare for what's coming next. i'm thinking i'm not going to buy any stocks until the market is at least 50% lower than it is, with the exception of maybe some short etf's. Which again got me to thinking. ETFs?? another fucking scam. another wall street scam. these double and triple and short etf's are all loaded with insane backwardation problems and super high fees that don't at all mimic what they're supposed to do. this has been discussed a bunch before i know - but in thinking about it i can't help but be reminded partially of the whole subrime and cdo stuff. wall street went crazy with etf's as a way to again fleece investors some more with super high fees and often-times these instruments are scams that don't produce what they're supposed to. the rise in etf's has been gigantic and has also been a huge winner for wall street, but is sucking the public dry. i realize some are OK and do a decent job for investors but there are many that are outright scams that are being hyped endlessly. i hate that i'm so cynical but has the system always been this bad? i know the market and economy generally bleeds the public a little, but their greed and fraud has really run amok. there must be a ton of other examples that will come to light soon. goldman and the greek cds stuff, etc. we're gonna have to pay for all this greed and phony capitalism.
cdntrader in another thread linked to this on wiki which was a great short read, which i think can really shed some light on how things may possibly progress for us in some ways: http://en.wikipedia.org/wiki/1998_Russian_financial_crisis although the russian crisis was obviously different than ours will be the contagion effects that asia brought to russia look eerily similar to what we're hearing out of europe now. and the banking/currency crises there at that time may play out very similarly in our country regardless of ben's printing press. once confidence is lost en masse, he can print all he wants it's not going to help...
Being a FX daytrader, I shy away from long-term global macro plays unless it jumps out at me. That said, ETFs, CDS, CDO's and some of the futures are pretty much useless to deliver underlying exposure in the event of a SHTF scenario. Derivatives are only as good as the counterparty. I agree, who knows how those leveraged ETF's are managed behind the scenes?! Obviously with some mixture of actual stock and derivatives, that may or may not get paid back when it's time to redeem. The way i see the next 5 years unfold is inflation or deflation. It's all up to Bernacke. When Asia pulls from US debt markets, either Ben shores it up (inflationary), or doesn't (deflationary). Inflation play is long S&P futures/stock, short USD, long commodity futures/agriculture. Deflation. long usd, short S&P, short US Realestate, short commodities/metal futures. Either scenerio ends with deflation. Inflation then deflation is worse than just deflation. So, I think it's a good time to go long farmland, livestock, guns, ammo, fresh water, medical supplies, regardless, imo.
I think we're already 18 months into your worldview and it's definitely going inflation first as benny wanted - the stock market has risen 70% oil is up over 100% etc. If asia pulls, and i don't think they will for a while unless the ponzi gets MUCH worse - then i think we'll actually see hyperinflation here and we're totally fubared. i disagree with your thesis on bernanke shoring anything up then. bernanke will have no control at all anymore. he can do whatever he wants with fed funds and QE but its meaningless because long term rates will skyrocket to probably at least 10% maybe even 15 or higher and the dollar will be worthless. that's definitely the scariest scenario imaginable. in that scenario confidence here will be shot and everything will selloff - dollars, stocks, and bonds. commodities will skyrocket. to me, thats way beyond worse than the great depression - it'll make that look like a boom. that's again why i despise what bernanke's doing because his ponzi is exposing us to total annhilation. the deflation scenario is infinitely better, definitely agree on that. and i think it's the much more likely scenario. (end this fucking ponzi, benny! that ppt shit yesterday wasn't cool either and was a little too overt. you might upset our asian friends by being so obvious. tell lloyd to spread out his buy orders a little better next time.)
I can remember when retail was 85% of market volume. Institutional participation progressed to the point that the retail investor doesn't even matter any more. And now, or so I've heard, >50% of daily volume is done through TWO firms. So... has it "always" been this bad? No.