Monday, February 8, 2010

What are we reallly talking about here - Y2K to NOW

Here we are on the left side of the above  pix, doing the Yamaha thing, LETTING THE GOOD TIMES ROLL.

The dotted blue line is the S&P500  running its little feet off.  The black and red candlesticks represent the purchasing power of the US Dollar vis-a-vis the basic commodities -  Ugly picture.  The S & P pix is mucho pretty until you realized that it is priced in US DOLLARS which are in "Race To The BOTTOM" as to purchasing power.  Then its a bit sadder, as shown  here in the second pix. While it came out smaller than the other, it basically covers the real value of the stock index NOW.

    So for what its worth, $100 worth of  US DOLLAR purchasing power, exclusive of "hedonic" improvments, is now equal to between 15 and 40 dollars of current purchasing power, having diminished in such fashion in merely 10 years, therefore let us review:

ECON 101 – the nature of MONEY

rewind to ECON 101, and examine "MONEY". Today we have "money" of a sort, noted as 'FIAT Money', also called 'funny money'.
One defining characteristic is that money is durable, such as the silver Roman Denaris I have on my desk. It still has value, unlike the chinese banknote from the 1930's framed alongside it. Durable, fungible, exchangeable, a unit of accounting and a stable store of value are the REQUIRED characteristics for DURABLE MONEY, as opposed to Temporary Money. I care not for this discussion and in my mind it cannot be an "argument" in the classic sense, as there is no historic perspective or standard upon which to compare any paper currency to Monetary Metal Currency, commonly thought of as GOLD. Indeed no fiat currency, categorically, can exist when its issuer passes from the scene, so while it can FUNCTION TEMPORARILY with some characteristics of REAL MONEY, it is a creature of its creators. This said, fiat currency historically loses its value over time due to the actions of its issuers, which further limits its ability to function, IPSO FACTO, as real money. Therefore this is a debate without participants.
As modern life moves on, things are replaced by better things. Over the course of history that I have been to observe, along the lines of Tonybee's "HISTORY OF CIVILIZATION", I have not observed any significant improvements in the device known as money since the times of Lydium, in the Pre-Christian era in what is now modern Turkey.

  I live differently that I did in the mid 1970's, when purchasing power for the average worker was at its peak.
For all the differences, I can say, mostly good.   Qualitatively, I say BAD, because from the two charts above, you my conclude as I have, that this purchasing power has fled our wallets, partially back into the former 3rd World Countries we today call Emerging Nations, and partially back into the coffers of the Super-Rich and their nominees and hired-guns symbolized by Goldman-Sachs.

    BOTTOM LINE. Holding some proportion ofyour assets in Monetary Metals, such as gold, silver and platinum will serve to insulate you from the monetary tricks that fiat issuers engage in.  Desite "de jure: legal restrictions, it is a  "mal insensia" understanding that drive "EveryMan" to hold such financial insurance against governmental skullduggery and foul play.

   Investing is difficult.  Throw in the deceptive effects of currecny fluctuations, and the degree's of difficulty increase exponentially.  Stock market profits, in share transactions in this finance minefield will try many an investors soul and spirit.  Profits are always necessary and if you have suffered the loss of purchasing power in the last 10 yrs its time to take THREE STEPS [ Lynrrd Skynrrd],  1/ get some currency insurance and keep it.  2/ get a system that engages you in PROFIT, 3/ Invest those profits into 3/ areas : more currency insurance, more passive income and more speculative capital.   Devastating as this currency erosion was, where there is life, there is HOPE.

   Should you sign up for a half price trial to PEAK PICKS and see these methods in action?

  For market professions, probably NO,

        For everyone satisfied with their investment performance, NOT.

               For everyone with no need to either improve or protect their capital, A Definite NO !

  ANYone else might want to take a look for less than the cost of a Big Mac Meal and a lot better for  you!

Reblog this post [with Zemanta]