China, Oil and Markets: It’s All One Story
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Berenice Abbott William Goldberg, 771 Broadway, Manhattan 1937 If there’s one thing to take away from this year’s developments in markets and economie
[See the full post at: China, Oil and Markets: It’s All One Story]With 175 Million Americans with either no income or making under $35,000/yr it’s easy to believe that most Americans couldn’t cover a $500 repair bill. In fact, I’m shocked that 30% of those making under 30k could—it’s hard to imagine how with steak at $10/lb. I disagree with the commenter, referring to FoxNews link I think, who said that isn’t true. I live here and it looks pretty spot-on to me. Note this average is including the 10 richest Zip codes in DC plus all the coastal boomtowns like S.F. so imagine what flyoverland averages. The U.S., like Germany, is considered a “good”, “recovering” country. With 30% unemployment. Ahem.
2nd, you have to note that the > $3 Trillion loss (equities alone) is the loss of collateral value in a world struggling to find collateral to sustain the debt. We could argue about collateral/debt ratios v GDP or whatever, but let’s just look at the 30:1 leverage of the major banks–the kind of institutions that would be involved in using stocks as collateral. So that’s $90 Trillion of good collateral lost in 3 days. $90 Trillion is 6 years U.S. GDP. That leverage is the real hit to the system and is your Deflation.
It’s time to move to cash if you haven’t already, and if you have enough, perhaps a bit of gold, silver or bitcoin, but do remember those are not risk-free.
Raul- Nicole always said cash and cash equivalents (such as short term T-bills). Is this still safe to hold in that form?
It’s time to move to cash if you haven’t already, and if you have enough, perhaps a bit of gold, silver or bitcoin, but do remember those are not risk-free.
Ilargi, Cannot tell you how glad I am that a writer of your influence and sophistication has finally accepted a bit of gold as an acceptable adjunct to cash in the troubling circumstances we find ourselves in. Regards, GO
Nothing finally about it, GO, that’s what we have always said.
And wakeup, yeah, short term bonds count as cash (closest thing to it).
Silly wabbet,,,gumnuts don’t need to raise taxes to support debt spending. That’s old school stuff. Now all they need do is create more money.
And cash, in dollar form, is debt. The dollar is a debt instrument. A sort of bond. As in IOU. A certificate of confiscation. It WILL be devalued. No other choice. It’s just what Central Planners do.
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