Why the US will have the Biggest Crash the World has Ever Seen

[Jack V Savage]

we did have doom and goom. The 2008 crash was among the worst in history. It destroyed economies and caused countries to completely re-organise how they do things.

Er, yeah. After that. Once we started recovering, "Austrian" idiots weren't satisfied and kept predicting another downturn, a debt crisis in America, and double-digit inflation, and kept being totally crushed by reality. At this point, no rational person should do anything but laugh at their analysis.

 

[MeatheadMike]

we did have doom and goom. The 2008 crash was among the worst in history. It destroyed economies and caused countries to completely re-organise how they do things.

And by 2012, the market was reaching record highs again.

In other words if you would have invested right before the crash, and held your assets until 2012, you would not have lost a dime and would be getting high returns on your investments right now.

So what lesson did learn about crashes?

Hint: missed opportunities are always worse.

 

[Greoric]

Predictions of this supposed crash have been going on for the past 8 years or so.

Would you like to give us a ball park estimate of when this imminent doom is coming?

Predictions without time frames are worthless.

Well I can tell you the current bubble won't last past the end of this decade, before we start see the big dip of deflation or the drop of confidence in dollar assets from creditors. But as for telling an exact month that an entire market is doing to go either which way, is completely impossible.

These guys at the Fed aren't stupid. They know unless they're continually pouring liquidity in the system it'll collapse into a deflationary hangover from hell. That's why the entire 'recovery' has relied on 0% rates and QE.

You'll know I'm on point, when the markets start sliding and the Fed has to start a new round of QE before the end of the year. It'll be QE4 this time.

 

[Zankou]

All I can say is that Greoric should bet big and hurl himself into debt as heavily as he can, because it's time to short like the Apocalypse is here. Inflation will destroy the value of any longterm debt obligations so go NUTTTSSSSS people. Buy up valuable assets for fake promises (aka dollar$), and party like there's no tomorrow.

Or will he be one of those fakers who doesn't put their money where their mouth is .....

 

[Greoric]

All I can say is that Greoric should bet big and hurl himself into debt as heavily as he can, because it's time to short like the Apocalypse is here. Inflation will destroy the value of any longterm debt obligations so go NUTTTSSSSS people.

Or will he be one of those fakers who doesn't put their money where their mouth is .....

I'm situated accordingly, but there's a problem with the debt strategy too. There's a small chance the Fed will allow the short term pain to happen and we get the deflationary wave that's been pent up since the 90s.

Your portfolio has to accommodate both eventualities.

 

[Jack V Savage]

Well I can tell you the current bubble won't last past the end of this decade, before we start see the big dip of deflation or the drop of confidence in dollar assets from creditors. But as for telling an exact month that an entire market is doing to go either which way, is completely impossible.

If you bet that there will be a recession "sometime in the next five years" you generally have a decent chance of being right. Less than 50/50, but it's not so crazy. Your prediction of the cause is highly unlikely to be right.

You'll know I'm on point, when the markets start sliding and the Fed has to start a new round of QE before the end of the year. It'll be QE4 this time.

So if you turn out to be wrong, will that cause you to re-evaluate your understanding of the economy (or at least your baffling certainty)?

 

[sickc0d3r]

Well, I'll be fogging up the window in this thread. Don't disappoint me War Room.

 

[rsbones]

You don't have to be great, you just have to be better than the competition. In order to believe the U.S. will fall, you need to find someone(s) who will fill that void and the rest of the world is currently in even worse shape than the U.S. and so the investment classes at home and abroad will continue to put their investment money in the US. Whether it be treasury bonds or California real estate, the investment money will continue to pour right in

 

[ZroC]

umm well in fairness half the people laughing at another downturn can also be found in other threads laughing about how China is going to crash. So if China crashes they're taking the west down with it. Can't have it both ways.

Japan turning into a failed state.
Eurozone struggling
Russia heading for recession
China eternally hanging onto the brink of collapse

any one of these alone could cause big problems for a lot of countries.

 

[Greoric]

If you bet that there will be a recession "sometime in the next five years" you generally have a decent chance of being right. Less than 50/50, but it's not so crazy. Your prediction of the cause is highly unlikely to be right.

Of course. In fact with the modern business cycle timelines, we should have already had one, but the timing isn't so important as the depth I'm predicting. It's not going to be your average deflationary recession Savage. The Fed knows they can't let this thing go south so they're going to pour everything they have to keep it from doing that, hence why we have had continuously sluggish growth.

So if you turn out to be wrong, will that cause you to re-evaluate your understanding of the economy (or at least your baffling certainty)?

You know it my man.... but if I'm right are you prepared to make equal concessions?

 

[InternetHero]

No way.

The same slow cultural and military decline will continue unabated.

 

[Zankou]

I'm situated accordingly, but there's a problem with the debt strategy too. There's a small chance the Fed will allow the short term pain to happen and we get the deflationary wave that's been pent up since the 90s.

Your portfolio has to accommodate both eventualities.

Heavily hedged predictions are no predictions at all, much like a lawyer's equivocations.

I want to see some massively leveraged predictions, sans hedges.

 

[Greoric]

umm well in fairness half the people laughing at another downturn can also be found in other threads laughing about how China is going to crash. So if China crashes they're taking the west down with it. Can't have it both ways.

Japan turning into a failed state.
Eurozone struggling
Russia heading for recession
China eternally hanging onto the brink of collapse

any one of these alone could cause big problems for a lot of countries.

You hit it on the head. It's the entire international monetary system that's going to get restructured. There isn't a nation out there I know of that has sound money anymore. The Swiss Franc is about as good as you'll get nowadays.

 

[UpaLoompa]

You know it my man.... but if I'm right are you prepared to make equal concessions?

What about past performance? Why hasn't that made you reassess?

 

[Greoric]

Heavily hedged predictions are no predictions at all, much like a lawyer's equivocations.

I want to see some massively leveraged predictions, sans hedges.

Not at all. Just because I don't know for sure what the actions of the US central bank will be doesn't mean that the fundamentals aren't understood.

Sure I'm betting with much of my portfolio in hard assets and non dollar denominated securities that the Fed is going to take the wrong action by trying to liquidate.

But in the small chance they decide to do the right thing, I'm also in a bit of cash.

My purpose is to just lay out the problem for people to see.

 

[Greoric]

What about past performance? Why hasn't that made you reassess?

You should read the OP...?

 

[InternetHero]

Not at all. Just because I don't know for sure what the actions of the US central bank will be doesn't mean that the fundamentals aren't understood.

Sure I'm betting with much of my portfolio in hard assets and non dollar denominated securities that the Fed is going to take the wrong action by trying to liquidate.

But in the small chance they decide to do the right thing, I'm also in a bit of cash.

My purpose is to just lay out the problem for people to see.

Forget the money and security bets, those are small potatoes.

How about an avatar and sig bet?

 

[Cubo de Sangre]

All I can say is that Greoric should bet big and hurl himself into debt as heavily as he can, because it's time to short like the Apocalypse is here. Inflation will destroy the value of any longterm debt obligations so go NUTTTSSSSS people. Buy up valuable assets for fake promises (aka dollar$), and party like there's no tomorrow.

Or will he be one of those fakers who doesn't put their money where their mouth is .....

:icon_chee


So now I'm curious. What's a great buy right now that would allow one to get the most out of their leveraging?

 

[UpaLoompa]

You should read the OP...?

I did. I'm referring to the general conceptual framework you've adopted which has continually been performing quite poorly.

 

[Jack V Savage]

Of course. In fact with the modern business cycle timelines, we should have already had one, but the timing isn't so important as the depth I'm predicting.

And you haven't made any case for that. Anything can happen, but there is zero reason to expect a big downturn.

It's not going to be your average deflationary recession Savage. The Fed knows they can't let this thing go south so they're going to pour everything they have to keep it from doing that, hence why we have had continuously sluggish growth.

Growth has been accelerating and is now pretty good. And that last sentence is just odd. The Fed arguably couldn't do anything and then made a very weak effort to do something unconventional. They definitely didn't respond with any serious urgency in terms of monetary policy.

You know it my man.... but if I'm right are you prepared to make equal concessions?

I'm not starting a thread promising that the very strong growth we've seen recently will definitely continue so this isn't really symmetrical, but I expect rates to rise either near the end of this year or next year. I'm hoping they wait long enough to get some catchup inflation (as opposed to just when inflation tops the "target", which has been treated more like a ceiling), and that may happen. I would be quite surprised if there were more QE. But as far as it affecting my understanding in a significant way, it would depend on the reason. Some kind of unexpected event causing a downturn along with no fiscal policy response, thanks to a completely broken Congress, could cause a need for more monetary stimulus of some kind. I'd put the chances of it at under 10%, but I don't think it would *necessarily* be world-shattering.

Now if the shape of a downturn was something like you're saying, that would be pretty unthinkable and would cause some re-evaluation. It's like with prayer and healing. If someone who was being prayed for regrew a lost limb, it would cause me to re-evaluate my understanding of the power of prayer.

Heavily hedged predictions are no predictions at all, much like a lawyer's equivocations.

I want to see some massively leveraged predictions, sans hedges.

I pretty much have my whole portfolio long index funds (I don't even own a home). I assume that the TS has taken on a lot of debt to build a short position in the S&P500.