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"Shadowing Reality"

sharon sanders

sharon sanders

Editor-in-Chief & President
Brought to FT by jsnooz on another thread.

http://www.weedenco.com/welling/Downloads/2006/0804welling022106.pdf

Brilliant analysis by John Williams. A must read. I agree and have said many of the same points here for months. Of course, this is a non-BF analysis.

I do not look at GDP. I look at PPI, CPI, Labor stats, Money Supply stats, all of the reports from BEA including the TIPs report , for a start. The truth is there but you have to dig to the source documents.

I also look at the various stats from around the world like oil production and consumption, etc.

Also, it is imperative to closely watch China's stats. This tells you a great deal about what is happening or going to happen in the U.S.

Buckle your seat belts.
 
Re: "Shadowing Reality"

I agree that the article is a must read.

Makes want to seriously consider selling my company.

I just did a EBITDA analysis along with a cash flow projection for a potential buyer scenario, and with only a 2.5X multiple on the projected free cash flow, I would still get a return on my initial investment (4 years ago) of 10X, not counting the very large income I have been pulling out. Factor that in and my ROI goes to 1500% (4 years).

My problem is, where do I put the money? The good news is that if I sell, I eliminate a debt load that would wipe out all my accumulated assets if the market stutters for longer than 3 months....

Debt, it's a good force multiplyer when the econmy is good, but whatch out when it tanks.
 
Re: "Shadowing Reality"

eladdie said:
....My problem is, where do I put the money? The good news is that if I sell, I eliminate a debt load that would wipe out all my accumulated assets if the market stutters for longer than 3 months....
Click to expand...

It depends on whether you think the avian influenza threat is real. And if you do, when?

This will greatly change the financial scenario. If the pandemic starts this year, then, actually, the U.S. economy will be a "safe haven" for the world's wealth and the economic conditions described in the article will be stalled.

That is the question. BF pandemic? and When?

BTW - THANK YOU JSNOOZ
 
Re: "Shadowing Reality"

If the pandemic starts this year, then, actually, the U.S. economy will be a "safe haven" for the world's wealth and the economic conditions described in the article will be stalled. -F1

I, OTOH, would replace "safe haven" with "hyperinflationary hell" (another GR-ism) and then I would replace "be stalled" with "explode".


 
Re: "Shadowing Reality"

Lobotomy said:
I got scared away... can someone put the monetary facts about preparedness into things that common folks like me can understand?

When I looked at http://www.weedenco.com/welling/Downloads/2006/0804welling022106.pdf the first face that I saw looked like Karl Rove. I am a republican and it still scared the heck out of me.
Click to expand...
As a Republican, the best thing you can do is to remain scared; please stand pat. Your conclusion is as good as your party's choice for president. It's only natural that you and your party continue to remain conservative. It's a noble and responsible action to remain true to core values.

Great news.. thx a lot Lobotomy. Hope this helps.
 
Re: "Shadowing Reality"

Bill Gross, aka PIMCO's Bond King, writes about this topic (future inflation, currency devaluation, and unfunded gov't liabilities) in his May "Investment Outlook", "As GM Goes, So Goes the Nation". For those who find John Williams' analysis too esoteric, you may appreciate this article. Also, it is much shorter and a more entertaining read.

The link:
http://www.pimco.com/LeftNav/Late+Breaking+Commentary/IO/2006/IO+May+2006.htm

The crux of his newsletter is summed up in these two sentences:

"How are we to pay for this future burden of healthcare and social security expenses? Aside from contractual legislative changes to both areas (which are surely just around the corner), the way a reserve currency nation gets out from under the burden of excessive liabilities is to inflate, devalue, and tax."

Enjoy! :)
 
Re: "Shadowing Reality"

What Gross says, and then backs away from with his, "oh this will take years" comment is that there is a default in the dollar taking place. It was evident yesterday. Every world currency trader saw it. There will be bounces, but the stampede out of the dollar corral is in progress.

What he recommends, however, to those of us here, is also going to lead to slaughter as the Asian countries cannot withstand a round of bird flu at its current virulence. They're not independent countries economically; they're appendages and they're dependent on exports.

I suggest that we must filter the default of the dollar through the impact of bird flu. Then, the conclusions will be as solid as his premise.

What do you propose be the choices made?
 
Re: "Shadowing Reality"

IMO, Williams' report at the last page refers to the sign to watch...the relative value of the dollar. He also observes that he has no idea when the devaluation will occur, sooner or later. The signs he describes that one should watch for are now a reality. This is bold of me, and its IMO2, but this is not the time to diddle daddle fiddle faddle around. The US currency cracked. The game is in retreat. It's probably at the inception of full retreat. Like a riot, the way to stop one is to be forceful and aggressive with the rioters. We'll see what the Feds do in the next 2 to 3 days. That's the max window to restore "order" and obeisance to the buck, again imo.

The rescue is of the self. The lifeboats are listed in his article. We'll see who jumps in and how.

Those wearing their albatrosses of real estate (which will inflate btw) and their satchel of bonds are asked to wait a while longer before moving towards the lifeboats. You're gonna die economically anyhow; so don't crowd the women and children. As soon as Bird Flu rolls through and takes out the children and pregnant women, then you can pile onboard with your satchel full of fire-starter paper and your monopoly realestate.

When you stand in front of the loo, and you get to pull the chain, you should think about that being your store of value as the chain's been pulled and 3 biz days from now, you'll see what you will have left. Oh, yes, IMO and IMO2.
 
Re: "Shadowing Reality"

You guys obviously are very informed and educated to what is going on in the financial world, or at least the macroeconomics that youre referring to.

But, its all Greek to me, and probably most of us not in the market in a big way. I dont have the vocabulary you use, I might as well be reading a foreign language- and I doubt Babelfish could help!

I don't think I'm alone.

Help! Is there any possibility of a thread that is geared to those of us who would like to understand whats going on in the financial world, but dont have a clue to what youre talking about? I asked for this on the other board way back when but IIRC it never materialized.

I know its not always easy to turn your usual replies into English. I try to avoid too much "Medicalese" in my medical posts to avoid doing the same thing to non-medical folks, so I understand the challenge. I'm not asking for it on all financial posts, justa single thread that explains what the terminology you use means, and some of the basics. If you financial whiz folks could create a "Pandemic Finance for Dummies" thread, pretty please; it would be a huge help to those of us scratching our heads and saying "Duh!!"!

I consider some financial planning important to everyones preps and IMO its the hardest thing to figure out since I'm starting from clueless-and havent been able to find a Rosetta Stone or roadmap to help me find the way thru the "financial talk jungle". I may not have much in the market- but its my retirement. and learning how to position that 403B might make all the difference.

TIA
 
Re: "Shadowing Reality"

LMonty - I can relate. The polymorphism, cleavage, talk really boggles me. I have to read it 10 times. And then I still do not really understand it. Sometimes I just want to ask "Are we there yet?"

I will start a Pandemic Finance for Beginners thread.
 
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