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Re: Pretty nice week on wall street 

By: capt_nemo in POPE 5 | Recommend this post (3)
Sun, 08 Sep 19 4:35 AM | 27 view(s)
Boardmark this board | Pope 5 		Msg. 39410 of 62138
(This msg. is a reply to 39395 by Decomposed)
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The only sane mind on the board I guess DE..............The majority of the ones that read your post did not star it. haaaaaaaaaaaaa Lot of shepple around I guess. When reality hits they will be dumbfounded. God help their 401k'S haaaaaaaaaaaaaaaa




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Realist - Everybody in America is soft, and hates conflict. The cure for this, both in politics and social life, is the same -- hardihood. Give them raw truth.




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The above is a reply to the following message:
Re: Pretty nice week on wall street
By: Decomposed in POPE 5
Sat, 07 Sep 19 8:42 PM 		Msg. 39395 of 62138

micro:

Re: "BUT today is a an era of HYPER overstating things and trying to get the masses to believe that the sky is falling"Please think about what you are saying: "What we're experiencing is business as usual, even though our government has outspent its revenues by 15 million million dollars over the last 15 years." Is that what you believe? I doubt it. It's incorrect.

We are headed for trouble and there is no plan for changing course. In fact, the nearest thing there is to a plan is to accelerate the spending. Is a ruckus that "the sky is falling!" so inappropriate?

What we're discovering is that it takes a very long time for the sky to fall, that's all. That doesn't mean it's not happening.

Consider the interest rates. They plummeted to near zero. Many warned that lowering them so far was ludicrous. Savers, after all, have to be paid SOMETHING in order to not spend their money themselves. Right? And borrowers have to pay SOMETHING for the privilege of using somebody else's money. Right? So zero interest rates aren't sustainable. However, folks went along with the rate drop with the understanding that it was only a SHORT TERM TACTIC by our Central Bank. When conditions improved, rates would go back up.

But look what happened. The economy seemed robust. The Fed tried to raise rates, and the economy unraveled so rapidly that the Fed had to reverse course and lower them again. In other words, zero percent - which is unsustainable - has become the new normal. Even when the economy is doing well, rates can't go up! At zero percent, they really also can't go down. So, what ammo does the Federal Reserve have in reserve for use in the next recession? There WILL be a next recession, you know. Recessions are normal. Or, at least, they used to be.

The answer is that the Fed has no more bullets. The next downturn is going to be horrendous.

You asked that we not panic. Panicking is a liberal trait... emotion over mind... and it does no good. So, that's sage advice. But what's happening today is unsustainable and the sky IS falling. The fact that we can live quite well by spending more than we earn doesn't change the ultimate outcome. It only postpones it.

That said, I want to point out something remarkable. If you graph prices against interest rates, it turns out that both stocks and residential properties are extremely AFFORDABLE right now. I'm not going to say "cheap," but they're affordable and will likely rise substantially from here. Such a graph actually predicts DOW 50,000. Believe it or not.

Housing prices should also rise dramatically. They aren't screaming deals like they were in 2012 - they will not be that cheap again in our lifetimes - but they are still extremely good deals. This is a side effect of our insanely low interest rates. Not many Americans are in a position to benefit from them, but *YOU* are. You might want to give it some thought.

And, yes, here I am, seemingly contradicting myself by actually recommending that you BUY, BUY, BUY!! I don't think you'll find many others (except for unscrupulous brokers, of course) making that call right now. But things get weird when money is backed by nothing and interest rates approach zero.

LOL. I'm offering no guarantees!

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