Looks like the parties are not over yet. And that’s just great, because I haven’t started shorting yet. I did sell some 10% of my portfolio.
I didn’t think that Bernanke will abandon $US this fast, but I guess subprime problems are very serious, and 50 basis cut was necessary. And it’s an unanimous decision! So much for all those “tough” Fed talks. Today’s decision clearly shows that Bernanke is THE Helicopter Ben. I guess things are really playing out according to script. Higher inflation is to come for sure. $US is going to go down. And looks like a 1987-style correction may be in the process of turning into a 1998/99 prelude to another stock market bubble.
This incredible bubble blowing series may really crunch all bears to pieces, but ending up in hyper-inflation, then depression. So with the biggest high-tech bust, Greenspan created the biggest housing bubble. Now with the biggest housing bust, Bernanke appears to be in the process of blowing up the stock bubble to replace it. Money may be “funny” money again. Sometimes, I’m amazed at how these people lived in their lies, especially the Numero Uno Greenspan, a maestro of words, but crumbled in front of real truth. His recent lies and shunning of the housing blames truly make me repugnant. I don’t even want to talk about his greatest irresponsibility of this decade in human history. Not realizing that subprime is getting out of hand?? I thought it is YOUR JOB as the chairman of central bank, Greenspan?
So what should one do now? I believe one should get back to stock market at the opportune time. If there is not a good opportunity, one should temporarily park ones cash in gold or foreign currency. $USD is going down. According to Frank Barbera’s podcast this week, Chinese currency Yuan looks like it may have a revaluation soon. And Walmart’s prices are soon to go up.
Eventually one day 99 cents store will cease to selling $1 stuffs, but maybe $2 or $5 goods. I always wonder that whether they have ever thought about inflation. One day, $1 will be worthless as five cents, and what are you going to buy with that??
See the chart of $US below. There goes your 3.4% of purchasing power in 1 month (from 82 to 79.2). And you just thought that you are earning a decent 5% on a bank CD after a year?? The sad truth is that US government is going to rob you blind through inflation, and then tax you mightily too after you generate some good amount of “capital appreciation” through inflation. The middle class will continue to shrink at the expense of upper class and foreigners. The politics and social unrest will be increasing. And I only wish that Bernanke would have written his script differently. Unfortunately, one day far away in the future, we will be paying for someone (Greenspan’s + Bernanke’s) else’s sins. And we collectively speaking won’t even know how we get there, and recognize the real culprits of our economy.
Do me a favor, don’t let the government take away your hard-earned wealth. Invest in something tangible, and forget about paper money. That literally is just a number in some computer of your bank.