Debt Rattle December 18 2015


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    James F. Gibson Tent of A. Foulke, Horse Artillery, Brandy Station, Virginia 1864 • Sell The Bonds, Sell The Stocks, Sell The House – Dread The Fed! (
    [See the full post at: Debt Rattle December 18 2015]

    Dr. Diablo

    Far be it from me to stop the Fed from being lambasted, but doesn’t a rate rise attract yield-starved investors planet-wide into U.S. assets, 1937-style? And note, if like the Depression/pre-war playbook, investors flee a collapsing Europe, they won’t buy U.S. dollars, they’ll buy U.S. stocks. So the Dow could rise faster than the USDX and particularly the USTreasuries…and thereby get even MORE overvalued than they already are, which is wildly so. And the US$ can rise high enough to cripple the US economy, as well as break the US$ as reserve asset in central banks worldwide. Markets usually end with a blow-off bang, not a whimper.

    Not saying Stockman’s not right in concept: it will break things. But like TAE’s longstanding thesis, it may break things in “Deflation” (high value of core currency vs asset/investments) FIRST. At that point, the U.S. could say “this isn’t working for anyone,” and default on the whole $18-$250 Trillion debt and launch a “New Dollar”, because hey– everybody knew they were never going to pay any of it back anyway. They said that back in 1970 when they got on this train. It was just a matter of how and when. If there’s a “New Dollar” you can bet the old one won’t be worth anything, which is the sudden hyperinflation the other side has been talking about for so long. Then holding in cash as a defense will fail too.

    All I know is, when these downturns happen, every investing style loses, one by one. First business, then momentum, then stocks, then commodities including gold, then bonds, then cash. It’s like 7 boats, all of which will sink *sometime*, but only one stays afloat at a time. If you pick the 7x7x7x7x7x7x7 pattern wrong, you lose. That’s why nobody comes out of these Depressions intact. Well, that and the world wars have to cover it up. Merry Christmas!


    Dr. D,

    I believe you hit on something: Only the insiders who continually use information to front run events and maybe a few lucky individuals will come through this mess unscathed. The rest of us will be financial cannon fodder, maybe even real cannon fodder.


    Dearest Brother:

    It was a year ago that you left us, and as much as it pains me to say this, in the year since your passing all of your worst fears continue to manifest themselves.

    – The house you sold at 360K, (to avoid the drop to 50K you expected), now sells for 425.
    – The rent you incurred (to avoid the losses associated with owning) continues to rise – now well above the monthly mortgage you used to pay 2004-2008.
    – The “14 years til mortgage freedom” you lamented, is now only 12 years away as the second crash never came and “muddle through” continues to rule the day.
    – The wise voices you assumed would help guide you, either closed down their blog(s), or are lucky to be heard from on their own blog but once or twice a year.
    – The family you left behind continues to suffer greatly because of the poor financial decisions you made in life.

    Worst of all, you continue to be missed by all of your friends and family who cannot help but lament the loss of a well meaning loving father who made some poor choices in who he listened to late in life. It saddens all of us to see how had you not “woken up” as you said in the 2007-2008 timeperiod, you likely would still be with us now, happy and healthy surrounded by a family who loves you.

    All of us who knew you hope in fact the pain and anguish you suffered in the last years of your life is now alleviated and you truly are in a better place. Moreover, I personally (who miss you far more than I ever thought possible) will continue to ensure your last wishes would be fulfilled the best way I know how.

    I love you – Ann

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