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livinineurope

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Reply with quote  #4231 
JC,

Is there anything the Fed can do??  Yes they did QE1,2 and now maybe more.. but bailing out a sinking ship only works so long.  So in an ironic sort of way I think you've been fundamentally correct but  I think mistimed the longer view.  the 08 crash was arguably the 2nd worst crash in history..A rebound was inevitable..The normal rebound in a cycical bear market is 3 years..This marks the end of that 3 years.. So a reversal (If history repeats itself) should occur.  It should be a classic bear trap, and last as long as the 01-03 correction.

NOW... on the other side of that coin as RC pointed out above..Can we afford that??  No not really, so will QE3 and beyond be injected and further propel the markets (notice I say market. and not the economy..unemployment is not budging)...  yes.. this is possible.. but for how long???? 

I have a dichotomy of thoughts along this line..I suspect we could get a burst if they do QE3.. but i think the likelihood of it sustaining the markets are much less than a year ago or 2 years ago.... the S&P is reaching its multiyear high.. On a couple occaions it tried to break solidly through 1500 and  failed.. I suspect this will be the case again.

history has shown this is what happens during secular bear markets.. the other factor that I'm looking at is big companies reluctance to put their money to work..  the amount of cash AAPL etc.. are sitting on is unprecedented. 

I'm obviously happy the S&P reached my target I predicted last fall, but i'm slowly relinquishing my holdings with the exception of gold and the miners.  I think these are grossly oversold and undervalued based on r-values that i follow.

Oil copper etc are sufficiently priced..I'm still long but less so than 2 months ago a I think this bull is running out of gas.

final thought/s .. If the markets particular gold is going to make a move it needs to do so in the next 2 weeks IMHO.

Oh-ya I agree..at some point AAPL will offer a short opportunity but thats like trying to smother a fire with gasoline!. The better alternative is the TVIX.. 


GLTU















livinineurope

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Reply with quote  #4232 
JC, I agree with whats being said below.  copied/pasted from your post above.
it'll be a long slow grind down..Just MHO based on stock market history.. 

PE was 7.5 or so in 1982.time will tell..


 he goes on to state that the P/E ratio for the index could fall to 10 and that the index itself could fall to 800, from about 1,400, leading to a “massive bear market.”


JohnnyCash

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Reply with quote  #4233 
US-Mexico Gun Battle Erupts Into Afghanistan Ferocity --- Violence Reaches New Heights

The situation in Mexico develops into full scale military firefights between the Cartels and Mexican Army/Police.

The Cartels have become brazen -- opening fire on American Police across the Rio Grande. The war spreads north into the US as Zetas engage Houston Police in intense gun battle killing a gang informant in police custody.

Reports of Cartel violence come from as far north as Colorado. There is evidence the Cartels are deliberately taking the war into California, Nevada, Arizona, New Mexico and Texas. Cartel members have made open threats against American police officers who interfere with their business.

See this video:v=nX2gtblTeqI&feature=related  US-Mex Border Gunfight Like Afghanistan  --Reporter gets nervous during heavy gunfire within a border city "I'm-ah I'm-ah I'm-ah gonna call my family", small and heavy machine gunfire .50 cal, 20 millimeter machine gun, grenades other explosives.
  Fierce Gunfight On the Rio Grande
  Zetas Attack Houston Police
 
 Murder Over the Internet

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mlreits

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Reply with quote  #4234 
JC and Livin,

This is just my observation. With the action in the market for the last couple of weeks, this starts to look more like a fourth wave correction. I expect the market to under cut its recent low, S&P 1,359, to 1,335 +/- 5 points. I would view that as a buying opportunity. The 5th wave would take us to Livin's target of 1,450 to 1,500 for the S&P. The sell in "May & go away" saying will likely not working very well this summer IMO. I intend to liquidate 1/2 of my holdings on the 5th wave.

JC, I know you disagree with my wave count, but that's how I was taught & understood it.

Livin, interesting you mentioned the bear and bull cycles. Based on my observation, both bear and bull cycles in recent history tend to be longer compared to before. Therefore, I think this bull cycle will last close to 4 years. Yes, it will likely last till after the November election.

Of course, take my opinion at your own risk.

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Minh

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JohnnyCash

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Reply with quote  #4235 
Voter Fraud Expose'

Fox News Channel is playing a one hour special called “Stealing Your Vote” this Saturday at 3 pm and repeated Sunday at 9 pm.(times EST) You might want to  record and watch, and tell your friends.
 
If you've ever wondered why there are so many 49%-51% elections then watch. The voter rolls in this county and through out California are years out of date. Even the dead are still eligible in SD county. Long gone college students and military personel remain on our voter rolls. Absentee ballots arriving at these former addresses can be filled out by anyone and returned to the Registrar of Voters (ROV) in SD county.
 
Don't laugh LA and SF, this problem is worse in your counties.
 
In previous elections ballot boxes have gone missing, either at the poll station or the ROV counting room. Procedures are lax. Elections have been stolen, but no one has the nerve to check.
 
Absentee ballots that arrive one day late (no matter what the postmarked date) are just thrown away.
 
Absentee ballots are probably the weakest link in the current voting scandal so vote only at the polls, in person.
 
If you lose control of the electoral process you lose control of the government, and then real property becomes a very soft target.

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JohnnyCash

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Reply with quote  #4236 



Tradings Chart

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kaihacker

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Reply with quote  #4237 
The Dutch PM and his cabinet resigned...if only we could be so lucky here.

As much as I dislike Obama and his horrific policies...I guess I should be carefull what I wish for.  

Just like in the Netherlands...our debt problems will eventually be a real issue for our govt.  Extend and pretend can only last so long.  

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Gene Hacker

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kaihacker

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Reply with quote  #4238 
A good visual for the race to the bottom...



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Gene Hacker

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RobertCampbell

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Reply with quote  #4239 
Quote:
Originally Posted by kaihacker
A good visual for the race to the bottom...




Very nice visual.  Tells a story, doesn't it?
RobertCampbell

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Reply with quote  #4240 
 Livin'

S&P 500 is back above 1,400.  

GLD is only down 0.5% from our start date, and GDXJ is down 9%.  GG is getting pounded too.  I guess nobody loves the gold miners these days - DUH!

What's your thinking on the markets right now?



kaihacker

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Reply with quote  #4241 
PIMCO's Bill Gross On when inflation will hit:

"It has already started to hit. Let's look at it this way. In a very slow-growth, in euro land, a very recessionary environment, we still have inflation at over 2%. It is really remarkable. The amount of easing we have seen over the past three years in terms of quantitative easing and extremely low policy rates everywhere has really been an inflationary thrust. I think even the Chairman would be willing to acknowledge that. None of them are willing to acknowledge that it will not come back down. They still think it will be 2% or lower. We suspect not. We suspect, like the Bank of England, Mervyn King always writes letters of apology, saying that the 3% inflation will really become 2%, all we have to do is wait. I think that will be the standard, you know, we will hear from the Chairman and other Fed officials that inevitable inflation will come back down to 2% or maybe lower, but I suspect it will not."


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Gene Hacker

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RobertCampbell

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Reply with quote  #4242 

If inflation rises, interest rates have to rise or the USD will fall.

This video tells you what happens if the interest rate on the US debt rises from its current level of 3% to 4%, 6%, and 8%.



If inflation rises but the Fed elects to keep interest rates artificially low to prevent the budget deficit from getting even worse, the USD falls even more.

Bottom line:  If inflation rises, the bad situation we find ourselves in now only gets worse. 

So anyone hoping for higher rates of inflation, my advice is to be careful what you wish for.

::::::

“The sea's freezing.   A man won't last long in that.  We've drawn a bad hand this time.”

“I've never been a good loser. I intend to get into a lifeboat.”

- Conversation between two card-players on The Titanic, from Eric Ambler's screenplay, "A Night To Remember".






RobertCampbell

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Reply with quote  #4243 
Where's Livin' and JohnnyC ??

Did you guys burn up in a fire or something ?
RobertCampbell

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Reply with quote  #4244 
USD, inflation and commodities

Some interesting graphs and tables in this piece from Chris Puplava.  Broad based moves in almost all currencies versus the US$.

Chris Puplava senses a move downward for the dollar is in the wind.

http://www.financialsense.com/contributors/chris-puplava/topping-dollar-good-news-for-commodities-now-bad-news-for-economy-later


Summary
The USD Index recently broke a triangle consolidation to the downside and this break looks like the real McCoy as the USD is displaying weakness on a global basis relative to foreign currencies. Weakness ahead by the USD will be a tailwind to commodities and foreign equities in the immediate future while acting as an economic headwind in 4-6 months as commodity inflation begins to feed into the economy.
JohnnyCash

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Reply with quote  #4245 
RC -- I'm still here.

Regarding the USD and your graph above, the technicals look for a short term decline in the USD. Still US Treasuries are in high demand. This is the fear factor from Europe which can rise to fever pitch on a moments notice that Spain cannot afford more debt and cannot pay the debt it currently owes. Then there are the other European dominos. On any given day any of these could explode with favorable effects on the USD.

The ISM graph has a relation to the USD, but in times such as these there are other more powerful forces in the Dollars' favor.

Don't forget that the Federal Reserve (that's you American Taxpayer) has now become banker of last resort to the world. The Feds' balance sheet is full of European toxic assets (loans, derivatives ...) which it has exchanged for good old US Treasuries and currency accounts (all on your behalf Mr. US Taxpayer).

The key point here is the Europeans aren't rescuing our banks, but we are theirs. The demand for the USD is reflected in the purchases of US Treasuries by foreign investors and banks.

The Fed can make up or down changes in the USD, by buying or exchanging dollars for shaky Euros the USD will fall, likewise the Fed can sell Euros or toxic Euro denominated instruments for USD and raise the dollars' value. So what we are seeing now, in my opinion, is Fed international politics being reflected in the value of the dollar as Mr. Bs' opinion of the European problem waxes and wanes. (This is not the only factor, Europeans and Chinese investors see the USD as safer than their own currency or bonds. Note this does not say the USD is completely safe, but it is much safer from their perspective.)

Then there is China --- all is not well there as we have suspected for a couple of years. Now however things are much worse. It was only about 3 weeks ago that the top leadership in China made a radical change in personnel as result of a scandal with an individual destined for the top post in the Communist Party.

The underlying reasons are the declining Chinese GDP growth (significantly less by perhaps has much as 3% lower than previously projected) and declines in the Chinese stock markets. These things were first telegraphed by the ridiculous overbuilding in their real estate markets. We watched this develop in real time in this thread.

All of the things above add strength to the USD in the intermediate and long term.

In the short term commodities and the USD will act in inverse of each other as the Dollar declines.

One other point, oil is used in every commodity, for fertilizer, harvesting/mining, packaging/fabricating and shipping. Oil is used by every American employee to get to and from work. Oil is used to move people and goods to every point in the nation. Oil is used to provide electricty to every home, factory, high-rise and store in the country. When oils' price falls all other prices fall too.

There is plenty of oil, and plenty of domestic oil, the only obstacles are political "realities" and counter-free market speculator "realities", not reality.

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JohnnyCash

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Reply with quote  #4246 

Minh --- are you using Elliott Wave analysis for the 4th wave you discuss?


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RobertCampbell

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Reply with quote  #4247 
Quote:
Originally Posted by JohnnyCash
RC -- I'm still here.

Still US Treasuries are in high demand.



If demand is as high as you claim, then why is the Fed currently buying over 60% of all the newly issued Treasury debt?

And will there more and more rounds of QE?  Count on it.  There will come a time when the Fed will have to monetize all of the U.S. debt - and that's when the roof caves in. 

Most Americans have a lot of hard financial learning to do.
RobertCampbell

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Reply with quote  #4248 
Quote:
Originally Posted by JohnnyCash


There is plenty of oil, and plenty of domestic oil, the only obstacles are political "realities" and counter-free market speculator "realities", not reality.



From the research I've done, I've come to the conclusion that cheap oil is a thing of the past. 

While there will always be ups and down in the future price of oil, my opinion is that there will be more "ups" than "downs."
kaihacker

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Reply with quote  #4249 
Quote:
Originally Posted by RobertCampbell
Quote:
Originally Posted by JohnnyCash


There is plenty of oil, and plenty of domestic oil, the only obstacles are political "realities" and counter-free market speculator "realities", not reality.



From the research I've done, I've come to the conclusion that cheap oil is a thing of the past. 

While there will always be ups and down in the future price of oil, my opinion is that there will be more "ups" than "downs."


I agree RC.  Production is only half of the story when talking about oil (or anything for that matter...econ 101...supply and DEMAND).  China and India and dozens of other developing countries are developing a massive thirst for oil.  

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Gene Hacker

Passive and active real estate investment opportunities.
http://RiverLakeRE.com riverlakere@gmail.com

Home Inspections in Bakersfield and all of kern county:
http://bakersfieldinspections.com
RobertCampbell

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Reply with quote  #4250 
Quote:
Originally Posted by kaihacker
Quote:
Originally Posted by RobertCampbell
Quote:
Originally Posted by JohnnyCash


There is plenty of oil, and plenty of domestic oil, the only obstacles are political "realities" and counter-free market speculator "realities", not reality.



From the research I've done, I've come to the conclusion that cheap oil is a thing of the past. 

While there will always be ups and down in the future price of oil, my opinion is that there will be more "ups" than "downs."


I agree RC.  Production is only half of the story when talking about oil (or anything for that matter...econ 101...supply and DEMAND).  China and India and dozens of other developing countries are developing a massive thirst for oil.  


And as per the emails we exchanged, now that Japan is shutting down nuke power plants, Japan is being forced to buy oil to fill the void.
JohnnyCash

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Reply with quote  #4251 

Quote:
Originally Posted by RobertCampbell
Quote:
Originally Posted by JohnnyCash
RC -- I'm still here.

Still US Treasuries are in high demand.



If demand is as high as you claim, then why is the Fed currently buying over 60% of all the newly issued Treasury debt?

And will there more and more rounds of QE?  Count on it.  There will come a time when the Fed will have to monetize all of the U.S. debt - and that's when the roof caves in. 

Most Americans have a lot of hard financial learning to do.

RC --- regarding Fed purchases of Treasuries, the latest published by the NY Fed shows the balance sheet holding steady at $2.6 Trillion since June 2011

Permanent OMOs: Treasury
The purchase or sale of Treasury securities on an outright basis adds or drains reserves available in the banking system. Such transactions are arranged on a routine basis to offset other changes in the Federal Reserve’s balance sheet in conjunction with efforts to maintain conditions in the market for reserves consistent with the federal funds target rate set by the Federal Open Market Committee (FOMC).

On March 18, 2009, the FOMC announced a longer-dated Treasury purchase program with a different operating goal, to help improve conditions in private credit markets.


On August 10, 2010, the FOMC directed the Open Market Trading Desk at the Federal Reserve Bank of New York to keep constant the Federal Reserve’s holdings of securities at their current level by reinvesting principal payments from agency debt and agency mortgage-backed securities in longer-term Treasury securities.

On November 3, 2010, the FOMC decided to expand the Federal Reserve's holdings of securities in the SOMA to promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate.

On June 22, 2011, the FOMC directed the Desk to continue reinvesting principal payments on all domestic securities in Treasury securities to maintain the Federal Reserve’s holdings of domestic securities at approximately $2.6 trillion.

 
 

There are no operations at this time.
 
----------------------------------------------------------
In the last 2 weeks a few $billion have been purchased BUT the net balance of Fed ownership of Treasuries has held rather steady since June of 2011 as this graph shows. In fact US Treasuries held by the Fed are at about $1.7 Trillion, considerably lower
than the target of $2.6 Trillion.
The balance owned in this graph was updated just 3 days ago.

So as you can see the Fed has been selling as many of its' Treasury assets as it has been buying.

As the graph shows the Fed was VERY active in purchasing Treasuries until about June of 2011 as the NY Fed branch reports above.

So the 60% figure commonly used is now about a year out of date.

Since the Fed has maintained a steady balance of about $1.7 Trillion in Treasury assets for about a year then all
NEW Treasury debt since then must be in NON-Fed hands. These are
the foreign and domestic private individual and bank investors I referenced in the post you quoted.
 
Note, since June of last year the Fed has not done any QE and nothing in the trend shown
in the graph below shows a change in that trend.




 


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JohnnyCash

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Reply with quote  #4252 
RC --- regarding your comments on world oil supplies, I think you are likewise using old or out of date data. This is a very interesting topic, do a little research and it will be well worth your time. Go to some original data sources as close to the geologic deposits at possible.

Good Luck!

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kaihacker

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Reply with quote  #4253 
Again...Supply is only half of the story.  You also need to look the demand side of the equation.

  

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Gene Hacker

Passive and active real estate investment opportunities.
http://RiverLakeRE.com riverlakere@gmail.com

Home Inspections in Bakersfield and all of kern county:
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RobertCampbell

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Reply with quote  #4254 
Quote:
Originally Posted by JohnnyCash

Quote:
Originally Posted by RobertCampbell
Quote:
Originally Posted by JohnnyCash
RC -- I'm still here.

Still US Treasuries are in high demand.



If demand is as high as you claim, then why is the Fed currently buying over 60% of all the newly issued Treasury debt?

And will there more and more rounds of QE?  Count on it.  There will come a time when the Fed will have to monetize all of the U.S. debt - and that's when the roof caves in. 

Most Americans have a lot of hard financial learning to do.

RC --- regarding Fed purchases of Treasuries, the latest published by the NY Fed shows the balance sheet holding steady at $2.6 Trillion since June 2011

Permanent OMOs: Treasury
The purchase or sale of Treasury securities on an outright basis adds or drains reserves available in the banking system. Such transactions are arranged on a routine basis to offset other changes in the Federal Reserve’s balance sheet in conjunction with efforts to maintain conditions in the market for reserves consistent with the federal funds target rate set by the Federal Open Market Committee (FOMC).

On March 18, 2009, the FOMC announced a longer-dated Treasury purchase program with a different operating goal, to help improve conditions in private credit markets.


On August 10, 2010, the FOMC directed the Open Market Trading Desk at the Federal Reserve Bank of New York to keep constant the Federal Reserve’s holdings of securities at their current level by reinvesting principal payments from agency debt and agency mortgage-backed securities in longer-term Treasury securities.

On November 3, 2010, the FOMC decided to expand the Federal Reserve's holdings of securities in the SOMA to promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate.

On June 22, 2011, the FOMC directed the Desk to continue reinvesting principal payments on all domestic securities in Treasury securities to maintain the Federal Reserve’s holdings of domestic securities at approximately $2.6 trillion.

 
 

There are no operations at this time.
 
----------------------------------------------------------
In the last 2 weeks a few $billion have been purchased BUT the net balance of Fed ownership of Treasuries has held rather steady since June of 2011 as this graph shows. In fact US Treasuries held by the Fed are at about $1.7 Trillion, considerably lower
than the target of $2.6 Trillion.
The balance owned in this graph was updated just 3 days ago.

So as you can see the Fed has been selling as many of its' Treasury assets as it has been buying.

As the graph shows the Fed was VERY active in purchasing Treasuries until about June of 2011 as the NY Fed branch reports above.

So the 60% figure commonly used is now about a year out of date.

Since the Fed has maintained a steady balance of about $1.7 Trillion in Treasury assets for about a year then all
NEW Treasury debt since then must be in NON-Fed hands. These are
the foreign and domestic private individual and bank investors I referenced in the post you quoted.
 
Note, since June of last year the Fed has not done any QE and nothing in the trend shown
in the graph below shows a change in that trend.




 



It looks like the Fed is still buying U.S. Treasuries to me.

US Fed buys Treasuries maturing 2/2036 thru 2/2042

April 10, 2012

(Reuters) - The U.S. Federal Reserve on Tuesday was buying on the open market Treasuries maturing February 2036 through February 2042, the New York Fed said on its website.

The Fed previously said it intended to buy $1.5 billion to $2 billion of the Treasuries on Tuesday morning. The Fed is scheduled to again buy Treasuries on Tuesday afternoon.

The purchases are part of the Fed's latest stimulus program, dubbed "Operation Twist" - a $400 billion program that extends the maturity of the central bank's Treasuries holdings in a bid to lower mortgage rates and other long-term borrowing costs.

http://www.reuters.com/article/2012/04/10/markets-fed-operations-idUSL2E8FA4KS20120410

RobertCampbell

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Reply with quote  #4255 
Quote:
Originally Posted by JohnnyCash
RC --- regarding your comments on world oil supplies, I think you are likewise using old or out of date data. This is a very interesting topic, do a little research and it will be well worth your time. Go to some original data sources as close to the geologic deposits at possible.

Good Luck!


re:  Peak oil

There are a lot of varying opinions - both pro and con.  I simply believe there is more evidence supporting the "pro peak oil" group.
JohnnyCash

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Reply with quote  #4256 
RC you said: It looks like the Fed is still buying U.S. Treasuries to me.

I said exactly the same thing, there is no disagreement on this point. Read my post again and you'll see where we disagree.

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RobertCampbell

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Reply with quote  #4257 
Quote:
Originally Posted by JohnnyCash
RC you said: It looks like the Fed is still buying U.S. Treasuries to me.

I said exactly the same thing, there is no disagreement on this point. Read my post again and you'll see where we disagree.


OK.  I missed that part.  So who is buying our public debt? 

It's not China - because China is cutting back.  They'd rather buy gold than USD - and for a lot of good reasons.

Maybe the Fed and the ECB are doing some soverign debt swaps ??  "I'll buy your crappy debt it you buy my crappy debt."  haha


USD soverign debt holders are going to get creamed sometime in the next 10 years from high to hyperinflation.  Just watch.
JohnnyCash

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Reply with quote  #4258 
RC, you said: re:  Peak oil

There are a lot of varying opinions - both pro and con.  I simply believe there is more evidence supporting the "pro peak oil" group.

Peak oil only accounts for existing fields. It assumes that the predictable rate of depletion for all existing fields will predict the depletion of fields not even discovered.

You need to do more in-depth research. Pun unintentional.

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RobertCampbell

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Reply with quote  #4259 
Quote:
Originally Posted by JohnnyCash
RC, you said: re:  Peak oil

There are a lot of varying opinions - both pro and con.  I simply believe there is more evidence supporting the "pro peak oil" group.

Peak oil only accounts for existing fields. It assumes that the predictable rate of depletion for all existing fields will predict the depletion of fields not even discovered.

You need to do more in-depth research. Pun unintentional.


If I do some more research, then maybe some day I'll be as smart as you JC - but not this day.  Right??   haha

I love you man but you really crack me up at times with your rigidity on certain topics.

Often wrong, but never in doubt.   lol  Just smile JC.  Everyone makes mistakes - even you !! 

BTW, you never answered the $10 oil question.  I was simply asking to find our your current thinking.  You did predict that, correct ??
JohnnyCash

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Reply with quote  #4260 

Quote:
Originally Posted by RobertCampbell
Quote:
Originally Posted by JohnnyCash
RC you said: It looks like the Fed is still buying U.S. Treasuries to me.

I said exactly the same thing, there is no disagreement on this point. Read my post again and you'll see where we disagree.


OK.  I missed that part.  So who is buying our public debt? 

Europeans, banks and Individuals, wealthy Chinese individuals, wealthy American individuals, money market funds, hedge funds.

It's not China - because China is cutting back.  They'd rather buy gold than USD - and for a lot of good reasons.

Maybe not the Chinese gov or CB but worried wealthy individuals.

Maybe the Fed and the ECB are doing some soverign debt swaps ??  "I'll buy your crappy debt it you buy my crappy debt."  haha

There are probably always trades going on between the Fed and ECB. However if the Fed keeps its balance relatively static then someone else must be buying the new Debt that Obama has generated in the last year which is somewhere between $1 and $2 Trillion.

USD soverign debt holders are going to get creamed sometime in the next 10 years from high to hyperinflation.  Just watch.

Perhaps but 10 years is a long time, there will be many trading opportunities between now and then with lots of warning before hyperinflation.




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