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alstry (36.57)

The Battle is about to begin

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December 16, 2008 – Comments (23)

At this point, the only thing we don't know is what kind of fight it will be.....a trade war, currency war, a physical war....all or some of the above.

Do you think the other nations of the world are going to sit back and let the world's reserve currency evaporate into oblivion???  Not a chance my Foolish friends.

Expect other nations to take dramatic measures and soon....very very soon.  Who knows what it will be...but it will be dramatic.  I was hoping it would not come to this....but it has and things are about to take a dramtic turn downwards.

Remember, you can't force people to borrow....expecially if they don't have jobs....no matter how low interest rates go.  Nor can you expect other nations, who are owed trillions just sit back and watch the debt they are owed become valuless.

Expect dynamic change in coming days and weeks.  My guess is that little of it will be good.  Remember, the markets first reaction, especially if knee jerk, is usually the wrong one.

23 Comments – Post Your Own

#1) On December 16, 2008 at 5:45 PM, alstry (36.57) wrote:

Vishay cuts quarterly sales forecast

Leggett & Platt cuts fourth-quarter outlook on low demand

Xilinx cuts third-quarter view on weaker-than-expected sales

Liz Claiborne suspends quarterly cash dividend indefinitely

Johnson Controls withdraws guidance, shares dip

Bristol-Myers keeps cutting staff

Hovnanian reports loss as housing starts tumble

Retail Stocks: Best Buy leads sector higher

As Best Buy profits evaporate and getting rid of workforce.  And the above is simply a sampling of the after hours news.

Watch how little mortgage rates fall on this "rate cut"....the real beneficiaries are the banks.....life is good when you can borrow unlimited sums of money at 0% and loan it to the federal government at a guaranteed rate of return.....too bad the citizens who are bailing out the banks with their tax dollars can't do the same thing......

No wonder some question the behavior of the Federal Reserve.

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#2) On December 16, 2008 at 6:25 PM, DemonDoug (32.36) wrote:

alstry, would a sudden stop in your opinion be inflationary or hyperinflationary?

http://en.wikipedia.org/wiki/Sudden_stop_(economics)

"In economics, a sudden stop is a sudden large reversal of net capital inflows.[1] It may result from a decrease in capital inflows, an increase in capital flight, or most likely both."

as i understand it this would be hugely inflationary, but i want your take on it.

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#3) On December 16, 2008 at 6:37 PM, alstry (36.57) wrote:

It would lead us to a hyperinflationary depression.

The worst possible scenario for the American people.  The best possible scenario for foreigners who want to exploit the natural resources of our country.

Demon, there are a lot of things I don't discuss on CAPs.  I want you to observe a trend that I think will be developing over the next few months.....basically a theme that the banks of the world are there own power center and owe loyalty to no nation....especially with the progression to globalization.

If I am right, we should see a number of Hollywood movies dealing with this exact issue in coming weeks and months.  Please observe the change in the in the perception of the people towards it banks and how it might affect the stability of our current political system.

This could be the most significant change since the founding fathers signed the Declaration of Independence.

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#4) On December 16, 2008 at 6:43 PM, DemonDoug (32.36) wrote:

you mean we might get a populist uprising following the stance of Andrew Jackson?  heaven have mercy, I never thought I'd see the day that we actually take power over our own means, and follow in the footsteps of Jefferson and Jackson.

I'm not as optimistic as you that that will happen though.

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#5) On December 16, 2008 at 6:49 PM, Nainara (< 20) wrote:

alstry 
Your post seems to indicate that you think that things will be coming to a head very soon. I don't disagree, but I'm curious about what indicators you are watching that lead you to this conclusion.

The links you've posted to bad news in the market reinforce my view of the faltering economy, but I see no evidence that foreign centeral banks are mobilizing at this time. Why is infeasible for Paulson, Bernanke, and Obama to continue to kick the can down the road a few more years?

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#6) On December 16, 2008 at 6:59 PM, alstry (36.57) wrote:

Let's see what happens in upcoming hours, days and weeks.

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#7) On December 16, 2008 at 7:19 PM, abitare (61.26) wrote:

FYI - Tehran News

October 06, 2008 

 

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#8) On December 16, 2008 at 7:30 PM, columbia1 wrote:

When all else fails, start a war. Politicians will do any thing to keep the public from turning on the government, some country out there will have a uncontrollable upraising, and its only recourse to take peoples minds off of the economic crisis and their own hardships is to start a war with another country. This has happened time after time in our history. At the present time, there are too many "desperate" nations out there not to imagine the reality of that happening.

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#9) On December 16, 2008 at 7:43 PM, Mary953 (79.07) wrote:

Alstry,

Is it permitted to ask about your general background and that of Demondoug?  I pick up traces of economics, history, banking, of analysis, of at least grad school level contrast and comparison which may be indicative of your discussions rather than your general daily surroundings.  There are other subjects that peek in around the corners of arguments, but between a computer that has lost its voice (No You Tube for You!) and a pre-Christmas virus, my deductive reasoning is strangely muted.

For what it is worth, I can see our new President-elect as an outsider in the mold of Jackson much more easily than as a Lincoln or a JFK.  He also seems to have that Jeffersonian quality of making up his mind and then convincing himself that he is correct no matter what opposing evidence is brought forth.  I hope I have that last part very wrong as I believe a President must be an agent of compromise to succeed.

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#10) On December 16, 2008 at 8:05 PM, alstry (36.57) wrote:

Mary,

You make the assumption that the president has the power to decide ......an interesting assumption.

As far as my background, I was patriculary lazy in undergrad and managed to major in a couple subjects, one of which was economics which in hindsight was absolutely worthless.....philosophy with an emphasis in logic would have been far more beneficial.  In addition to owning a restaurant, I was trial lawyer for a number of years.  I am a husband, father, friend, and citizen.....

And for the time being,,,,,,manic blogger on CAPs.

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#11) On December 16, 2008 at 8:18 PM, Mary953 (79.07) wrote:

A number of pieces click into place with that.  And I am glad that you took the chance to be lazy as an undergrad.  It is one of the few opportunities for that type of enjoyment.

As to the president, a president certainly can get himself into trouble. I think though that for most people, using the office to effect change is about as likely as steering a battleship with a cardboard rudder.  It may look good till you try to use it, but it just can't handle the job.

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#12) On December 16, 2008 at 8:39 PM, gman444 (29.05) wrote:

Does anybody have a handle on what the potential replacements for the $ as the world's reserve currency are beyond the "basket of currencies," a now-tired phrase?

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#13) On December 16, 2008 at 8:53 PM, angusthermopylae (40.72) wrote:

If there is a physical war, I believe it will progress something like this:

--First, all the major players will have to experience some form(s) of hardship.  Economic?  Check.  Political...mmm, part way there. (Greece is certainly simmering nicely.  Turkey is always a good counterpoint to the Greeks.  Russia is good for regional political dissent and iron-bootery.  China hasn't reached the "too many in a cage" stage yet, but give it time.  The US?  Only if/when the breadlines start wrapping around the block.)

--Next, one or more someones will have to decide that they can get their collective butts out of the crack, but only if "the bastiches in (insert country here) would sell/trade/buy that particular item (oil, gold, food, widgets, land, routes, political independence, etc) that we need!"

--The country of Bastich (from above) feel they are getting shafted by said-named-country.  "Sure you can have it, but you're going to have to cough up (money/medicine/aid/political concessions/whatever) if you want it!"

--Rinse and repeat several times, whilst mixing in grandstanding in the international stage, tariff and counter tariff, and treaty/SOFA shouting ("Hey, you said you'd help us!?!")

--Then, my friends, you have a delicious recipe for a major set of conflicts.  Enough for everyone, and it just takes a drunk Pacifica sailor to throw a punch at a visiting Atlantia soldier to spark off the kind of party that everyone will remember.

For reference, look at the global circumstances behind the Crusades, the Spanish-American War,  WWI, WWII (Japan & Germany), the end of the Colonial period, Falklands, and others.

Remember, the name of the game isn't Stratego, it's Resources!  You've got it, We want it!

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#14) On December 16, 2008 at 9:21 PM, TMFMarlowe (< 20) wrote:

Hey alstry, I'll bet you five bucks in gold that the dollar stands as "the world's reserve currency" with no serious challengers at this time next year. You in?

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#15) On December 16, 2008 at 9:27 PM, alstry (36.57) wrote:

Actually,

Right now I think the dollar will remain relatively strong with lots of volitility in between now and next year. 

As far as "reserve"....who knows what that will mean.

But if you want to make another bet.....I am in.

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#16) On December 16, 2008 at 9:40 PM, johnw106 (63.16) wrote:

The US dollar regardless of its form, wether fed buck or new constitution dollar, will remain the choice. It is a simple thing to understand. Their are no viable armys that can invade us by land on short notice.

Look for a squabble and possible "small" war to break out in South America soon. And a major conflict will break out in what is called North Africa/Middle East very soon. And it will probaly start with a civil uprising in Iran. A second excellent candidate is a move by Russia to try a second time to secure a foothold in the Middle East and a counter of some kind by the Chinese.

Another highly likely scenario is that some country will make the fatal error of attacking Isarel. Isarel is not a weak bunch of accountants and merchants like they were in 1938, and are more than capable of taking out several enemy armies at once.
In economic hard times there will be "jew" bashers. They will find a battle hardened and elite force of commandos, not defenseless businessmen.

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#17) On December 16, 2008 at 11:18 PM, Nainara (< 20) wrote:

abitare
Wasn't Max Kaiser predicting a COMEX default last Monday the 8th? The guy is entertaining to listen to, but he kind of strikes me as a sensationalist.

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#18) On December 16, 2008 at 11:46 PM, redneckdemon (< 20) wrote:

johnw106:

 Lets not forget that our country will never let Israel fight alone.  We have "In God We Trust" written all over the frigging place, and guess who the big G's backing?  The same bunch he pulled down the plagues for.  If anyone attacks Israel enmasse, it will only be a matter of time before we jump in swinging.  Or at least spitting and cursing.

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#19) On December 17, 2008 at 12:04 AM, zygnoda (27.05) wrote:

Kaiser is a lot of fun to watch..

Alstry, I liked your description of your undergrad years.   What was your other major?   What in particular has made your economics degree worthless?  (I assume you haven't found it all that practical... )

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#20) On December 17, 2008 at 1:23 AM, kstarich (30.84) wrote:

Alstry

Are CD's safe?

Mary

Obama is not making the decisions.  This will become more apparent over time.  He will begin to stutter more and appear weak.  He is a man who is very conflicted in his identity and is controlled by others behind the scenes.  THis will not bode well for America.

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#21) On December 17, 2008 at 7:43 AM, alstry (36.57) wrote:

Zyg,

Looking  back I am not sure if it was an actual degree, or major or  what but Poly Sci which included a large number of psych courses.  Basically courses which you could have fun at college and still get decent grades.

Why worthless,  because  economics  really wasn't a degree that one could convert to a trade or apply in business.  If one wants  to pursue business, accounting  is a much better background with some  finance  and marketing  courses.

Every business student  should have a strong understanding of  accounting.  It is the language of  business and most don't speak it well.

Many "economists" are so far removed  from reality  that they often fabricate facts to achieve their ends.  I much prefer focusing on actual facts to extrapolate reasonable  conclusions.

It is simply my oberservation after years of dealing with "economists" in a variety of settings.

 

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#22) On December 17, 2008 at 2:45 PM, abitare (61.26) wrote:

Nainara,

I cannot really, provide a track record on Max Kaiser. I did hear him talk about a COMEX default on gold at some point. 

I just think it is interesting listening to what the world is hearing. 

I really never trust any pundit on TV. Even one I like Jim Rogers and Schiff, I listen to, but I never trust any or them.  

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#23) On December 21, 2008 at 1:04 PM, dwelllewd (27.97) wrote:

Kstarich,.  How is it you have come to such a definative conclusion on the decision making and loyalties of the President-elect, but cannot decide for yourself if a CD is safe.   .  It must be so frustrating to be so smart as to know the intimately the innerworkings of the mind of someone (I suspect) you haven't met personally, and not be able to analyze the relative safety of a debt instrument issued by a company required to make regular reports as to it financial condition.  ..  While I'm not a big Tom Cruise Fan.... I loved Rainman... I bet you can tell me what he was thinking too....

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