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If the Fed gives out a line of credit good for 30 days for $100 billion dollars and the borrower renews the commitment for 12 months to get through a year, guess what? That's $1.2 trillion in loans issued. When the Fed acted in the panic they were the lender of last resort and they lived up to that role. Too big to fail may concern some, but the reality is there will always be too big to fail because it is inherently inefficient to try to have thousands of smaller institutions trying to serve the financial needs of a nearly $15 trillion economy.
What strikes me as funny are the people who want to call Obama and Democrats socialists, but they hate the idea of too big to fail banks. Saying a bank is too big and too greedy sure sounds a lot more socialist than anything I have heard out of Obama.
of course everyone has to do what they feel right doing but my question is what are you protecting your assets against? calamity or hyper inflation?
wheres the back up plan for growth, or recession,or deflation.
if your close to retirement wheres the plan for generating income?
anyone who thinks they are going to shift gears in time if their speculation that only one economic scenerio will play out is going to find its impossible to do.
bullet proofing ones assets doesnt mean betting on only 1 economic out come because you believe thats the only scenerio you see.
again its just my opinion but i dont see much protection .
having been caught in the stock market crash of 1987 i have read some of the books by those who saw nothing but the collapse of the markets and the dollar and running to hard assets.
we have ravi batra ,richard band etc.
well for 100 years all the doom and gloomers were wrong and if they followed their own advice they are quite a bit poorer then they should be.
the point is betting the ranch on one particular outcome because it seems so obvious is not protecting your assets but its speculating with them.speculating your bet will pay off and no other outcome will happen.
bullet-proofing ones assets would be gold for calamity and heavy inflation, stocks for prosperity and light inflation, long term treasuries for deflation and recession,cash for stag-flation and rebalancing the other groups.
this isnt the forum really for discussing investment planning so ill leave it at that. but betting your way will pay off or that you will be smart enough to time things to get out and in again is not protecting yourself.
despite the fact you think by avoiding cetain asset classes you think you are the question is what if your wrong.
good diversified asset protection is never having to say im sorry..
Last edited by mathjak107; 07-25-2011 at 04:09 AM..
If the Fed gives out a line of credit good for 30 days for $100 billion dollars and the borrower renews the commitment for 12 months to get through a year, guess what? That's $1.2 trillion in loans issued. When the Fed acted in the panic they were the lender of last resort and they lived up to that role. Too big to fail may concern some, but the reality is there will always be too big to fail because it is inherently inefficient to try to have thousands of smaller institutions trying to serve the financial needs of a nearly $15 trillion economy.
What strikes me as funny are the people who want to call Obama and Democrats socialists, but they hate the idea of too big to fail banks. Saying a bank is too big and too greedy sure sounds a lot more socialist than anything I have heard out of Obama.
the federal reserve itself is where the problem lies. i always called obama a "globalist", protecting the interests of the big banks. how else do you explain the bonuses awarded through his "pay czar?" i wouldn't exactly call that socialism, unless you mean rewarding bad behavior and socializing the losses only.......
saying the banks are too big and are not to get more taxpayer money to keep them going is the opposite of socialism. let the free market let them fail if they are making the bad decisions. (and keep making the bad decisions)
you better believe americans are concerned about too big to fail!
those top banks are increasing their share of the "banking" market and therefore would need a BIGGER taxpayer funded bailout, which we are all unwilling/unable to provide.
we have a system that is increasingly UNSTABLE and yet it is like forcing citizens to put yet more chips on the table.
Well the FED to me is just a "tool" being used. It is only part of the "problem".
Honestly, in this environment I don't think you have much protection. A serf is a serf. Some have better privileges, but still you aren't free.
From my view the "governments" have controlling shares of the mega corps from investments using corporate governance. Then you have the same powerful people and families who steer and "control" these "tools".
Thinking this "oligarchy" can't come and "eat" your so-called "assets" or cut you off to me is naive.
Bringing things out in the open is a necessary first step imo, but only that.
Most of our financial woes are caused by the FED and it's artificially low interest rates. Let the economy inflate at 5-7% a year until the debt becomes manageable. I did better under Carter than any President since, at 5% I could live on my savings
this is from 2009 and you can see how we did the same thing with our federal reserve ZIRP lending.
what we are doing is not good at all.
i will just print a few paragraph to get an idea of the article:
As the EU, UK and US fall into the Japanese ZIRP death trap, all three are wondering why ZIRP doesn’t fuel lots and lots of lending. Well, why bother lending any money if you can’t make much profit from it? After all, playing commodities markets is bringing in much more loot! Ask Goldman Sachs about this matter. The rate of default on past, earlier loans is still rising, not falling. In both domestic and business real estate. So the losses outstrip any potential gains with lending at an ever lower rate. We know how this works. We saw this at work in Japan for the last 20 years.
There is plenty of credit being created out of very, very thin air. Credit with no capital savings behind it: government fiat debts. That is, central banks are lending to governments at ZIRP rates and are holding these debts based on the principal being paid back sometime in the undetermined future. When things ‘get better’. Only Japan also shows us that this magic moment never arrives. That is, the dynamics of ZIRP means no government will ever stop borrowing! Why stop?
And you can’t raise rates to normal levels (3%) because this will cause sudden catastrophic hikes in the overhang of trillions of dollars of principal that needs to be ‘turned over’ frequently. So ZIRP becomes a trap. Governments eat more and more future savings in the form of tax promises and instead of private debt swelling in size, we get government debt swelling in size. Thanks to the ZIRP system in Japan for 20 years, the principal owed on Japanese debts is now over 200% of GDP.
Last edited by floridasandy; 07-26-2011 at 01:56 PM..
mathjak you obviously have too much faith in the system. will you admit they're shifting the wealth? being the government can invest and move in the stock market it makes them a corporation. why are we still getting tolled on bridges that should of been paid off by us decades ago? look up your local toll bridge and you will see it was sold to a private company. so basically we paid off the bridge... but then it got sold to someone else who now is making us pay for the bridge... again... and again. that's just a simple example. get it now? rich or poor has nothing to do with it. this isn't crying. this is awareness. this is common sense. that makes no sense. roads, etc. are all sold to private companies too. this is why you find strange MPH changes in some areas. most of it is to catch off guard drivers so the local police force (also a private company) can make revenue via tickets.
my state of Florida which is also a corporation since it can invest and own assets holds more in assets and investments than the entire national budget deficit alone. they have a surplus in the BILLIONS. they could sell a good number of their assets and investments and pay off our national debt right this moment. but they won't. they want their cake and to eat it too. THAT is the main point. so the people need to cough up their money via more taxes to help pay off the debt? doesn't make sense does it? if you don't believe me go here: http://www.google.com/url?sa=t&sourc...-9MBog&cad=rja
that's for year 2008. which is way lower than what their total net assets are in 2011. in 2008 they had net assets of 50 trillion dollars. the surplus is above 50 billion. it was 48 billion in 2003. and these are just the assets that were public, there's private ones they didn't have to divulge.
this money is unused... where is it going to? why aren't we using it? insanity.
what you're saying is "Do as they do then." which money wise is smart yes... but is it morally right? is it the right thing to do? this is hurting the country and helping only those who are in the know. i see what these guys are investing in and ride the wave of money too. but why should i contribute to this crime? i can't do that. it's wrong. my heart tells me no. maybe you think it's morally right. which is up to you, but i hope you know that's what's wrong with this world.
i never do what "they do" . i learned that along long time ago because "they are usually wrong"
i dont plan for any outcome in particular. i have just as much a bet on a recession or deflation as i do on prosperity or inflation.
thinking your the smart money is when you get burned. hunkering down in hard assets with everyone else only to find we fall into deflation or hunkering down in cash just as inflation rises . those who thought they were brilliant investors in the dot coms never saw it coming when the rug was pulled out.
in 2008-2009 long term treasuries were the red headed step child of investing. you couldnt find them on any buy list anywhere as rates were so low and starting to rise. .. well they soared a whopping 30% out of left field.
its when you try to rule out these other events from your plan you end up getting burned. a good plan allows for them.
nothing ever plays out the way we all see it. there is always the unknown and things not on the radar that change the course of the obvious.
all the biggest drops come from new highs when things couldnt look better.... all the biggest run ups come from the depths of hell when even thinking about the markets makes you want to vomit.
you want the protection all the time of all that asset classes that are moved by a major economic scenerio. they are always there flying fighter cover.
Last edited by mathjak107; 07-26-2011 at 06:26 PM..
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