muses of the moment

May 15, 2010

Latest Letter from Martin Armstrong dated 5-14-10

Martin Armstrong’s latest letter dated 5-14-10 (7 pages).

Martin Armstrong talks about the May 6, 2010 drop and the “waterfall effect” in currencies.

Click here. (better version uploaded now)

I have to say that I am confused by Martin’s statement that there will be no depression. As you know, groovygirl agrees with John Williams that there will be a hyperinflationary depression, high prices, high DOW, no debt availability, thus a contraction in economic growth. Not a depression in the sense of 1930. Perhaps he means this and just hasn’t stated it as plainly as I need to understand. Or perhaps I am missing something here

Everything else Martin says, especially about the global debt crisis and it’s effect on currrency confidence falls right in line with groovygirl’s thoughts on the situation. Perhaps when his book comes out, it will be the whole picture.

The good thing is that gold is a good place to during a currency crisis, whether there is a official depression or not.

Groovygirl also completely agrees with Martin regarding this: if countries (the entire globe) do not restructure their debt, it is all over.

Taleb tells it like it is

From zerohedge…..click here.

Nassin¬†Taleb, piggy-backing on Chris’ thoughts on the debt Ponzi scheme now worldwide from Wednesday’s post, offers his advice for investments. Remember from yesterday, we now understand that all debt will default, the game they are playing now is to keep the interest payments coming. They must sell the T-bills to get the interest payments. No t-bills, no interest payments, end of Ponzi:

Taleb’s advice: stay away from Treasuries (especially long-term), avoid both the euro and the dollar, have a collection of metals and agricultural land exposure, and “use the stock market as something for entertainment not investment.

Groovygirl could not agree more. The very unfortunate thing about Ponzi schemes, they unravel very quickly.

Side musing: there will be a window of time where long-term US T-bills will go up and then default. If you chose to invest as they rise, fine, but get out before the default. This may be a very quick timeframe. If you don’t want to risk it, buy gold and silver and Taleb’s other suggestions. They will go up during this time too.

Side-side musing: right now we have a different countries unable to make interest payments and we are asking others to make those payments for them. This does nothing to ensure or enable that they can make payments in the future. We will run out of “other’s people’s money”.

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