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Monday, December 12, 2011

Market Volitility

Last week, early, I dumped many positions I had that are long.
I fear the worst now, a deflationary collapse is upon us in the next 2 months.

It is of course, impossible to tell exactly what will happen.  It is possible, for example, for the banks across the world to issue more money and cause an currency devaluation.

But it seems like they are pushing on a string.  Meaning, the banks can create as much money as they want, but there is no way to cram it into the system to get used.  The only thing the banks can do with new money is to jackup prices artificially, such as natural resources, stocks, etc.   Items that provide liquidity for hopefully easy exit.

The rub here is if they can't get money flowing through the economy, the injection into resources, stocks, etc could severely hurt the common person.  As the economy stagnates, the costs of items tied to the banks investing rises, amplifying damage of a recession.

I am having a real hard time seeing how the markets overcome these forces now into the election.
Cash is king.

I reserve the right to flake out and flip flop.  For those who want a simple, non-flip-floppy trend, simply read this post and follow it by clicking here.

A GREAT read on the vicious cycle we are in with the world banks can be found by clicking here.

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