Post From KTFA By Memphis » February 10th, 2014, 7:52 pm • [Post 17]
Can We Have a Real Discussion About The USD?
Some quick housekeeping before my post:
There has been and needs to be an evolution, a progression in the things that I am bringing to the forum and so I find it important to say that I will not be making any further efforts to take the reader back to previous discussions, concepts that have been covered.
That is a waste of people's time who truly follow my posts and it aggravates me (the author) who never enjoys repeating himself in the real world!
So please recognize that this post or any post going forward may appear to stop short or leave the reader scratching their head. If so, it is simply material (or concepts) previously introduced. :handshake2:
Read More Link On Right
So many voices out there making so many predictions of doom and gloom.
Long term? yep, we're in for some events that none of us have seen before....a true paradigm shift is in our future. My beef today tho is in regards to the timing.
The world and all that is in it operates on cycles. Periods of NATURAL highs and lows. The current economic/monetary crisis in most nations stems from their level of sovereign debt and is fully a result of arrogant men who thought they could even out the economic cycle (IN DEFIANCE OF HISTORY) and, as has always been the case, they were wrong.
Here's a statement that may shock some of you...
The United States actually defaulted in 2007-2008 and THAT should have been the time where we began rebuilding and allowed the cycle to bottom and then begin a slow swing upwards BUT thanks to our politicians and central bankers the system has been kept alive completely by life support and FF to today?
WOW that patient is so beyond saving. BECAUSE of the artificial means employed we can be assured that the fall (when it comes) will be from a much greater height than was necessary and once the plug gets pulled (via rising interest rates and all that will follow) our patient will quickly flatline (Nova gave me that word!) with no hope of being revived.
Please don't take this last paragraph too lightly as it has taken me many hundreds of hours of study to fully appreciate and understand.
Memphis note: I never claimed to be a quick learner. :thug:
I have read all the posts this weekend that were addressed to me and made notes on them. A simple Thank you is all I can offer for the kind words. The body of this post is partly in response to this received from Mr. BoxMan:
Post By boxman » February 8th, 2014, 3:07 pm • [Post 230] -- A question for Memphis or Nova...in the past, one or both of you mentioned an economist that you both believed had a good insight and was worth a listen.
Could either of you please give me the name of this person, so i can listen to his speeches .. Thanks
Well Boxman, this is kind of like a magician giving his secrets LOL because it has required much energy for me to source the brightest minds out there. Among these is the gentleman that you ask of and his name is Martin Armstrong.
Martin sends out (on average) 150 blogs per month and it is not usually light reading!
His mind works on a plane that I cannot reside in BUT I do attempt to climb up there for brief visits. in short he is IMO easily one of the brightest men alive.
haha, how's that for a weak endorsement? What follows here is simply his latest blog sent to me a few hours ago with some added notes by myself thrown in:
The Flight to Quality Still = Bonds Posted on February 10, 2014 by Martin Armstrong
For all the rantings about hyperinflation and the demise of the dollar as the reserve currency, the fallacy of this constant preaching is quite plain and straight forward.
WHERE DOES MONEY GO IN THE ALTERNATIVE? While the gold promoters tell you it is only gold, after the German Hyperinflation the new currency was backed by tangible assets – real estate.
While smart money has been trying to get off the grid buying tangible assets including real estate, the majority of the money is NOT SMART and that still runs into bonds. Investors have been shifting record amounts out of U.S. stock funds and emerging markets and transferring into bonds for nearly 4 months now.
I have been reporting that the average RETAIL investor was NOT yet in the stock market. Most of the advance [seen in equities] has been fund buying including pensions.
Memphis [note: Pension funds have been entering the stock market at record levels seeking return. An interesting article came out yesterday linking the probe of FOREX manipulation and the resultant losses seen by pension funds.
That is an entirely separate post that would take me an entire day to explain and prove that pension funds are the lowest hanging fruit on the tree and all sovereign governments have plans in place to "pick" this fruit.
My only observation here tho (in relation to Martin's blog) is to point you to a deeper plane regarding pension funds. and that is they only have one desire in life, just one, and that is......any guesses? Yep you got it.....they need yield.
The long term pension system is NOT viable in case you've been residing under a stone and thus they desperately need a good rate of return to maximize growth.
Pension managers have always preferred the bond market for a sizable portion of their holdings to balance yield with risk BUT (going back to our discussion of unintended consequences) by the FED maintaining rates at or near zero these funds have been forced to venture into equities and other risky instruments as they seek....yield.
Thus we have now evidence of big cracks such as yesterday's article. The banksters who were REPRESENTING these pension funds have used these large positions to short their own clients position (betting against them) and thus effectively and in reality they have stolen the profit that these funds should have realized.
(remember when I stated that if you knew the depths of greed displayed by these guys that it would make you sick? Well I have had a certain nausea over this for some time now.) OK, back to Martin's blog...]
Memphis [note: oops sorry, I need to set this next paragraph up a bit...
About two weeks ago in relation to the big scare in emerging markets (when many folks thought the RV was coming because some Wall Street trader had the nerve to mention currencies re-pricing) I said that it was all just evidence of capital flows.
I continued by briefly explaining how capital seeks just one thing even more than yield and that is a place of comfort and safety because there is great VOLATILITY (remember that word?) in the world.
This type of environment creates movement and as things unwind this flight to quality will shift from public (bonds) to private (equities, etc) because ULTIMATELY it is now gov't that is the problem.
in like manner this is the appeal of metals. Not for return but as a hedge against.....gov't! OK, back to Martin's blog....]
The KEY to watch is the FLIGHT TO QUALITY. As long as the majority still run into bonds, this demonstrates that the confidence in government is STILL INTACT.
Those that keep preaching about the demise of the dollar and the United States have no clue of the historical context in which they speak. If we continually see this rise in geopolitical tensions, do you really think people would sell the dollar and buy China, Russia, or Europe? There is simply no other game in town.
It is the Flight to Quality that is indicative of CONFIDENCE. Pay attention to its direction for until that changes, there is no serious decline in the CONFIDENCE behind the dollar or the United States.
Memphis[note: the above SHOULD bring much needed balance to certain lines of thought about the sky falling thru a GCR led drop in the USD such as Lyndsey Williams shared on December 04 (and brought back to the forum over the weekend).
These discussions are not one dimensional guys but are EXTREMELY multi-dimensional so until people start offering me evidence support such simplistic thinking I will remain firmly planted in the real world, tho it be flawed.... if you care to join me, there's room....]
Memphis final note: tho I endorse Mr. Armstrong please don't think you can run off and become a disciple of his and forsake all other thought.
I read and follow many people and can testify that THIS is where my confidence comes from.
Having said that tho? I always subconsciously filter everything that I read thru my "Martin Armstrong lens" to see how it stacks up. When I am then required to pick a side? Martin usually (but not always) wins...