abs wrote:Aedens -
I've been reading about the possibility of a new carry trade developing with the US dollar due to the ZIRP policies of the Fed. Any thoughts on how an individual trader could capitalize on something like that or is this exclusively available to the big investment companies and banks who have access to the Fed window?
mannfm11 wrote:IN the 1970's, they invented expectations economics. Inflation expectations was confused with excessive taxation and responding pay raises. Bernanke and company are attempting to create artifical optimism, expecting it to defeat a situation where there is no mathematical solution. The entire system depends on inflation to create the basis of deflation. it needs bulls to create big bears. There is nothing more unusual than a market for something that isn't consumed and eventually ends up at zero. The more people that come to believe in it, the bigger the failure. When all have piled in, who is there left to sell to? Buy and hold has been a devastating strategy in stocks because the entire rational behind it was flawed, based much on the same model as securitization and other failed ideas. So, we are at buy and hold until it is time to get out. The theatre is packed and the fire starts at the climax of the show. People are attempting to sneak in the back door as the place begins to burn.
Even my mother is aching to buy. We are sitting on about $1 million in cash and of course the interest won't pay the utility and gasoline bills. Mr. Bernanke has destroyed the capacity to remain liquid, while at the same time enforcing it through his policy. One need only look at Japan to maybe realize that bankruptcy cannot be avoided, maybe put off, but not avoided. Yet, we make the same mistakes. Mom asked me if I wanted the stock market to go down, which I said yes. It couldn't be bought as an investment at these prices. She still brings up the day Ford was between $1 and $2 and how she missed it. We needed to go to the lawyers office instead and decided to wait another day. We will probably get another opportunity, but it will be a good idea to pass. Real estate is our gig, but I would venture we already have too much.
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