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House Price Crash Forum


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Everything posted by VedantaTrader

  1. If they fail...? LOl They have already failed its just that they dont know it yet. Yes they will succeed in the very short term. Ask people ask in 6,12, months from now if they think the FED succeeded.
  2. It depends what you define by chartists. If you can zoom right into the market structure, and see the interplay of volume, consolidation, dis equilibrium and equilibrium between buyers and sellers, then you will make alot of money being a "chartist" Richard Dennis made about 400million from being a chartist, Ed Seykota made probably more again. Everything is in the price action. For example yesterdays massive 400 move in the DOW was on half the average volume. This is bearish. If the rally had been on twice the average volume, then it would have had more meaning. Reading charts isnt about looking at obscure price patterns and coming to random conclusions...its about looking at the market in a 3 dimensional way, by looking at variable of time, price, volume, which can be sub divided into- acceleration, deceleration, increasing/decreasing volatility and many more things that I m not going into now...markets are not linear, chaos is present. Small incremental changes detected on very small time frames can lead to large ripple effects on larger time frames.
  3. Yes, they were'nt so let it go now and move on...lots of inaccurate things can be said in the moment. Its an exciting and nervous time, people are jittery. HBOS have more CDO exposure than their net worth...so there is reason to be scared.
  4. This is inaccurate.... Well,it has been both. Deflation came first, that was what has taken us to this stage of inflation. I mean deflation is a positive...who doesnt want their money to have more purchasing power. However there is one situation where deflation is a disaster. Especially defaltion of assets.That is when there are high levels of debt in an economy. So you see originally deflation was bothering Bernanke back in 2005. He was worried about house prices falling, asset deflation when debt levels was astronomical...so his answer was to keep printing money, and keep inflating this monster bubble by way of credit expansion. Now even though the FED raised rates to 3.75% in 2005, this was still way below the unofficial level of inflation which was 5%, and also below the nominal GDP growth. So even though the FED was raisng interest rates, money supply continued to grow at unprecendeted rates. Credit growth in real estate grew by 17% that year, bank credit by half a trillion. Basically credit grew 4 times faster than GDP. For every dollar produced, 4 dollars were added to debt. This serious credit growth caused inflation, leading to even higher interest rates and then at higher interest rates "the cheap"debt became unmanageable for too many Americans. When the US consumer and the US subprime market started to feel the squeeze, asset deflation set in again. Housing started to drop...inventories went up and the house bubble burst Scary stuff....? So now he has cut rates again, and is trying to prop up the market and bail everyone out who made a 500,000 dollar mortgage 32 times over before getting any of the debt paid back. Now that the banks and the consumer and the government are indebted to the eyes balls we have low interest rates, no liquidity and high inflation (aka,stagflation) Interest rates in the longrun will have to increase alot more than they were before they started to bring them down. High debt levels will be there for years with higher interest rates which will mean low or negative growth... this is a pretty dire situation for the general public.... Who knows really when this carnage will end. No one could really pick the top, so a bottom will be hard to pick also. The derivatives time bomb is still ticking also, give it 3-6 months to implode.
  5. Rogers called the bull run in commodities back in 1998 and people laughed at him. He has also been short investment banks for more than 2 years, and short the USD. He sold his house and lives in Singapore now. he has been long oil and gold for a longtime also. So yes, he agrees gold and inflation to the moon and dollar death.
  6. A lot of the commentators who I see who say cut cut cut work in investment banks and are fund managers. Its in their interest that the FED cuts rates. The people who say to cut rates at this time believe in the Bernanake school of economics. He is crazy about counterfeiting money as a way out of this mess. However, I see other university professors saying saying he is doing the right thing. Who to believe...? I stand in the camp that he shouldn't be cutting rates. I listen and read March Faber reports, Jim Rogers, Peter Schiff. These guys know alot about it. They think cutting rates is utter madness. Bernanke studied the Great Depression( the first one,lol) and believes that the FEd not cutting rates caused it. His phd thesis was on this. So he believes that printing money is going to solve this problem. However Marc Faber who is a genuis, with a phd also said that if he had been marking Mr Bernanke's thesis, he would have give him a pass on one condition. The conditon being that he never becomes a central banker unless of the Zimbabwee. The cause of the Great Depression according to Schiff ,Faber and Rogers was because of easy monetary policy before 1929, namely between 1924-1928. So one of them is right about the cause... I know who I beleive is right...based on my own logic also. Faber, and Rogers and Schiff have been preaching for the last 3 years that what is happening now is going to happen... a few great quotes from Jim Rogers recently about the FED, "Bernanke is a nut" "The whole world knows he doesn't know what he is doing" "If those clowns on Washington start running those priniting presses then this situation is going to get a whole lot worse" BTW, Rogers made 3900 percent with Soros in the worst market conditions of the 1970s he is up 500% on his China investments and nearly 400% i his commodities index. Its ok being a professor at a UNi and lecturing about your theories and spouting them. But I would rather believe someone who has pu his money where his mouth is and made money from his analysis. In the rel world do these economic professors outcomes really work in real life.
  7. I would take it all out of USD. The CHF is has got very good prospects. If you are going to put money into Gold, the CHF and Gold are fairly postively correlated. So in away you will not be offsertting any risk. Its like holding two accounts with gold. For foregin exchange appreciation in the longrun go for the CHF, JPY and RMB(yuan) However JPY, CHF interest rate differential will not favour you at this time. You will have a negative overnight interest rate payment. However large appreciation in any of these currecies could be 40,50,60%. The RMB could quadruple in the next 5 years once the Chinese let it float freely. Use a currency specilist, the costs shouldnt be too high if you arent moving them around alot. Carry trades are unwinding. I would not expect carry trade to continue. They dont work in risk averse world.
  8. Your right, no money will be going back into the deposit accounts in the banking system. With real inflation running at between 7-11%, a savings account giving you even 4% growth will get you a negative return. Bonds are financial suicide now. The other reason money wont go back into the system is because inflation and debt repayments will be and are so high that no one will have too much left over to save anyway, even if they wanted to. However the banks will still have plenty of money to lend the consumer. This will be more "counterfeit or monopoly money" printed by "Helicopter Ben", so alas, all is well,all that paper money will cause benign inflation,lol, and everything will be fine.
  9. Hmm, thats not actually true. An area of support in a market or an area of resistance shows a place where the dis-equilibrium became equilibrium, the forces of supply and demand equalised, buyer and sellers at a certain "moment"matced and agreed on price. An area of support or resistance is a place where lots of buy and sell trades take place around a narrow price range. There is a battle so to speak between bulls and bears. It is more profitable to buy at support and sell at resistance However than does not mean that these levels will always hold true. Price will often shoot right through. Thats where risk management comes in. However the risk reward scenario at an area of supprt and resistance could a risk 1: reward 3/4 So if your postions are right only 4 times out of 10 that is less than 50/50 odds. But the win expectancy is that you will gain 3 for a risk of one on winning trades. 40% win ratio= 12 and the 60% losing= 6 that is an expectancy of 2 So for every dollar that you risk you expect to get 2 back. Look for areas of supporton the daily time frame, but observe the price action on an intraday chart, and take the entry from there. A low risk entry can be found on an intrday chart.
  10. My first post, great forum. I feel a little sorry for Merthyn King. He wanted to let Northern Rock fail. But he was blasted by the media and lots of people for not acting quickly enough. He understands that the true way to self regulation is letting a bank fail. It wll make them think twice about these leveraged loans, CDOs, derivatives etc etc...A rate cut will not help. However the y have been doing better than the FED. Their actions are going to have dire consequences. Trying to blow air into a bubble that has burst. As Jim Rogers said it can cost more to prevent a recession than have one.... and the timely words of Ludwig Von Mises.... Mises wrote: The wavelike movement affecting the economic system, the recurrence of periods of boom which are followed by periods of depression, is the unavoidable outcome of the attempts, repeated again and again, to lower the gross market rate of interest by means of credit expansion. There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.[1] and... The boom can last only as long as the credit expansion progresses at an ever-accelerated pace. The boom comes to an end as soon as additional quantities of fiduciary media are no longer thrown upon the loan market. But it could not last forever even if inflation and credit expansion were to go on endlessly. It would then encounter the barriers which prevent the boundless expansion of circulation credit. It would lead to the crack-up boom and the breakdown of the whole monetary system.[3]
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