Bankrupt G7 Print Money to Reflate Economies
Economics / Fiat Currency
Dec 03, 2008 - 02:18 PM

By: Ty_Andros

As the G7 economies plunge over a cliff, the governments and central banks are taking turns at fire fighting in their respective economies. With each new initiative the Crack-Up Boom creeps closer and closer on the horizon as G7 public servants and central banks attempt to RESCUE foolish lenders and borrowers from their approaching demise and insolvency. The attempts will fail and insolvency will be brought to the entire G7 financial systems. Never before in history has more been borrowed and printed to rescue global banking and corporate elites from their hubris and stupidity. Mal investments are crumbling to their REAL value, not their inflated NOMINAL value, and as they do, the banks, financial systems and real economies shudder under the repricing. As reality supplants the fairy tales the greatest opportunities are presented to you!

After decades of theft of the purchasing power of your money through fiat currency and credit creation, the rubber band has snapped. This wonderful turn of events allows you to REGAIN much of the purchasing power that was lost, but this is only a temporary turn of events. You must wait like a cat and pounce on the prize of excellent values before your cash begins to crumble again under the latest assault by fiat currency and credit creation; but this opportunity for value is much farther in the future. To be successful now, you must learn to make money in rising and falling markets. BUY and HOLD is DEAD for the time being.

At last week's lows, the return for the S&P 500 on an annualized 10-year basis after inflation was -3.8%. It is quite clear the baby boomers ARE NOT going to RETIRE with the gains accumulated over a lifetime as real estate and stocks have much further to decline. Now their brokers are telling them to hold for the recovery. The new definition of this strategy is buy and HOPE.

I have projected earnings to decline to $50 dollars on the S&P 500 and to a multiple of 8. That signals a decline to 400 from Friday's close at approximately 896. There will be an approximate 60% decline from here. Hope is not an investment strategy. SELL INTO RALLIES!!!

Markets are experiencing VOLATILITY not seen since the early 1930's. Stocks, bonds, commodities, currencies and all markets will be repriced to reflect the new realities unfolding before us. VOLATILITY IS OPPORTUNITY for the prepared investor. You must prepare yourself or be a victim of it.

A case in point is Citigroup, the next permanent ward of the state. The headlines say it has been spared but the details say something else. Here's the price: over $300 billion of IMPAIRED mortgage-backed securities were “ring fencedâ€