Wednesday, July 1, 2009

How much liquidity can we stand ?

A graphic representation of the four phases in...Image via Wikipedia

Basically these guys can pump up the system to a great extent, but at some point, they cannot jack anything up farther because things start to break. When things
start to break, they cannot pump fast enuf to keep it all buoyant, so you all simply have to watch for the items that make it clear, i.e. Bear Sterns, Merrill Lynch, B of A
and on and on and on.

The destruction of TRILLIONS of nominal value of both derivatives and money-like credit instruments has allowed all this pumping to take place WITHOUT Hyper-Inflation, YET......... IT has not been without consequences, however, as everything you now consume costs more, and anything you wish to dispose of, brings less. Wages in fact, are falling.....Go to the grocery store to confirm this....Ask someone who has been around --> Modern improvements aside, the peak in wealth of living, described as "THE STANDARD of LIVING, was reached in 1973-1974, and has not been approached since.

What will you do ?

1/ As all great QuarterBacks do, you will excercise Excellent FIELD AWARENESS;

2/ Follow normal guidelines for emergency preparedness, reading on boards like for information about how to best do this.

3/ NOT become overly emotionally bound up by paranoia or GOLDBUG thinking.

4/ Have clearly assigned roles and plans for all circumstances, and "GO-BAGS".

5/ After avoiding GOLDBUG thinking of "ONE HUGE SCORE", you exploit repetitive
up and down cycles in both the general stock market and commodity driven
common stocks, realizing that while a GREAT SCORE may come along, you will
reap many, many profits from the Up / Down cycles while waiting.

6/ And you dont have to call "GHOST-BUSTERS" to have a good time.
Do some short term Due Diligence on HRZ, NSU, and DYN in US Markets,
and CXZ.V, MDN.To, XAU.To on the Canadian Exhanges [ Close today, CANADA DAY ]

Enjoy life, keep it sane, have some dry powder, cash, fueled vehicle, good social networks and personal relationships, all in balance. Bad things can happen to good people, but worrying about it will get you nowhere fast. Planning in advance will give you peace of mind, as you will then done all that is practical and be able to relax.

Ya'll enjoy your Canada Day and Independence Day Holidays, I know I will.



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