Results 1 to 5 of 5

Thread: weekend commentary - time to get liquid ?

  1. #1
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default weekend commentary - time to get liquid ?

    (snip)"The thesis is that maybe you should right now be thinking about getting liquid – gradually. I consider our time right now, May 07, to be a time just like before the world stock crash of ‘29.

    Imagine what people would have thought, if, after the stock market crashed in successive waves over a period of a year into 1930 – what they would have though it they could have gotten out of those markets in say, Feb 29…..and not ridden stocks down 50% .. and later 90%, in the several years following the ’29 crash.

    If you wanted to sell stocks or whatever, it makes sense to sell in liquid markets that are going up right?

    Or would you rather wait, and sell in falling markets after they had peaked? That is what greedy people do.

    On the other hand, the ‘insider’ types usually sell in the last stages of a bull market, and we see ‘distribution’ patterns that precede stock crashes. Only this time, we are looking at a world stock crash – as if the world stock markets together were one market. The present world bubble is an unprecedented world financial mania, never seen before, and at least 1000 times the money value of the 1929 world stock market. It is synchronized. It will all crash on one swoop eventually.

    We have record insider selling right now, just like on 2000. This is distribution. They are selling you their shares, getting out, and knowing the market is rising. They are cashing out."(snip)

    (snip)"You know, after several years of this newsletter, and even before, there is one primary problem that I have been working on. It is, ‘how does one save his wealth, even if there is a currency crash, even if there are financial market crashes, even if there is a deflationary depression?’

    Well, what I find out is, there are different types of liquidity. I am working on this in more detail, but let me broad brush this:

    If financial crashes are coming, you need to be liquid before the crashes – that is obvious.

    There are different types of liquidity. These depend on the currency they are in as well as things like interest rates.

    If you have decided to get liquid and out of paper markets then, you need to consider currency risk and interest rates, and liquidity. I do not consider ETFs or electronic gold to be serious candidates for crisis survivable liquidity.

    To be liquid in a financial crash, you need to sell assets and go to – say – cash. What you do with your cash comes into two categories.

    First, you go into a currency and say, take an insured CD with 5% interest. That is liquid.

    Or, on the same vein, you can use an insured savings account and get maybe 4% with no timeline.

    If you really want to get liquid, you can buy precious metals and things that central banks use to back their currencies. These pay no interest, but they are immune – more or less- from currency crises. I do not consider any paper metal vehicle to be metal. It is paper only, and depends on the viability of the market and normal market operations.

    The cost of being immune from a currency crisis is that you lose interest.

    If you want interest, you have to be in a currency…."(snip)

  2. #2
    Senior Member
    Joined
    Apr 2006
    Posts
    112
    Thanks
    0
    Thanked 0 Times in 0 Posts

    Default Re: weekend commentary - time to get liquid ?

    that's interesting

    I agree though, the bull market is in it's last legs. I'm slowly exiting my stock positions and taking diversified currency positons.

    I don't think we're going to see the market crash so much that paper resources and stuff like that is going to find no buyer.

    In these market conditions i think diversification is king. euros, gold, oil, AUD, considering yen, and maybe a splattering of shares with protection is my current strategy

  3. #3
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default Re: weekend commentary - time to get liquid ?

    ^^^ I'm with you on the gold and Euros at least. I'm also with you in theory on oil - but the unknown in that department is the 'islamic fundamentalist risk premium' which is supposedly already factored into the current price of oil. If the middle east blows up the price of oil could skyrocket - but on the other hand if the middle east and other terrorist activities remain quiet the price of oil could drop significantly.

  4. #4
    Featured Member lunchbox's Avatar
    Joined
    Sep 2005
    Location
    falling from grace
    Posts
    1,943
    Thanks
    0
    Thanked 8 Times in 6 Posts

    Default Re: weekend commentary - time to get liquid ?

    My OPINION:

    It's not quite time yet to bail out of the market. If you do bail, DON'T buy gold, yet.

    You will be able to save yourself at least a hundred bucks an ounce by waiting.

  5. #5
    Banned Melonie's Avatar
    Joined
    Jul 2002
    Location
    way south of the border
    Posts
    25,932
    Thanks
    612
    Thanked 10,563 Times in 4,646 Posts
    Blog Entries
    3
    My Mood
    Cynical

    Default Re: weekend commentary - time to get liquid ?

    other than the Dow Jones being buoyed by private equity buyout rumors / offers, every other US index have confirmed a downtrend on today's close. The broader the index, the more downturn (i.e. the Russell 2000 got walloped). The US dollar exchange rate turned negative against the Euro again. Gold is hanging flat around $675 despite rumors of central bank sales. IMHO the US economy 'boat' continues to take on more and more water - meaning that on the whole there is now more downside risk than upside potential.

Similar Threads

  1. Replies: 0
    Last Post: 01-31-2010, 10:07 AM
  2. Replies: 3
    Last Post: 11-15-2008, 03:49 PM
  3. Replies: 36
    Last Post: 07-17-2008, 02:39 PM
  4. Weekend Commentary time again ... London attacks
    By Melonie in forum Political Poo
    Replies: 1
    Last Post: 07-09-2005, 08:13 AM
  5. Weekend Commentary time - disrespecting religions
    By Melonie in forum Political Poo
    Replies: 10
    Last Post: 05-22-2005, 10:59 AM

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •