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Warning: Crash dead ahead. Sell. Get liquid. Now.

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posted on May, 30 2010 @ 04:39 PM
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Originally posted by MrDarlingFace
The problem with your insinuation that we don't really need stock markets as we haven't always had stock markets is that we also haven't had the same economy, technology and companies. ........................So things are a lot larger, a lot more complex and thus the capital structure is more complex and requires more ways to raise capital quick and efficiently.


Very true, we havent always had an economy that works (or doesnt work, apparently) the way this one does. So why the assumption that we have to make this one work at all costs? If it doesnt work well, why not scrap it and rebuild. Just because we need a way to raise capital quickly and efficiently does not mean we have to have THIS method, that allows for all sorts of middlement skimming that money off in between.


Originally posted by MrDarlingFaceFurthermore stock crashes do not cause economic downturns. Stock markets are a symptom of the economy and sentiment. If Apple's stock crashes it doesn't crash the economy. But if unemployment goes to 20%, then Apple's stock will crash...


Personally, I think you are oversimplifying. A single stock crashing may not effect the entire economy of a huge nation like the US. But can a single stock crashing effect local economies? I think we both know it can. And so when an entire market, not just a single stock, comes tumbling down, I think we both know that it does effect the broader US economy.

The stock market as it was originally envisioned as a way for companies or nations, or other groups to raise capital is not likely to be the problem. But there is something about the way stock markets operate NOW, that is the problem. It has become something it wasnt originally, and the something it has become is not working well. Its not working well in the Adam Smith sense, of being a naturally selective agent that allows the good and efficient to thrive and the inefficient and poorly designed to fail, and it is not working in the sense that the companies that truly merit investment are attracting investors. There are too many hands, too many lobbyists, and too much manipulation of information.

I personally do not think that allowing the whole mess to come crumbling down would mean that we would never have another stock market. When you tear down to rebuild a building, you often build a building that serves the same purpose. Sometimes it even looks like the old building in many ways. Its just built with better construction techniques and materials than the old one.




posted on May, 30 2010 @ 04:48 PM
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reply to post by Illusionsaregrander
 


You are actually incorrect.

The stock market in the early 1900's was a mechanism for gambling much more than it is today.

There is a great documentary that PBS has put out outlining the effects of this and the great depression. I would recommend you watch it.



posted on May, 30 2010 @ 04:52 PM
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reply to post by hawkiye
 


All I am saying is in the instance of 1970 vs. now, gold did not remain constant in terms of dollar/fiat currencies/things. It exponentially increased beyond anything else. A thousand ounces of gold could have bought an average house in the 1970's. A thousand ounces of gold will equal 1.25 million dollars now (valued at 1250/ounce). And thus goes far beyond an average house. So like I said, the price of gold seems like it has moved a. of itself in terms of valuations of things (like homes) or cars or what not over the past 40yrs.



posted on May, 30 2010 @ 04:58 PM
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[Sorry, wrong thread]

[edit on 5/30/10 by silent thunder]



posted on May, 30 2010 @ 04:58 PM
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reply to post by john124
 


I would say so. IF someone is truly concerned that the whole system is going to come crashing down in a catastrophic way, and IF they have some money to invest, THEN I would say a couple acres that has good soil and a reasonable growing season and some water would be a better investment than the equivalent amount in gold.

If you have gold, you can buy as much food as the gold you have can purchase depending on the price of that food. If food is scarce, an ounce of gold may not feed you very long. Lets be generous and say six months. But if you bought land, that land will feed you for years. It can produce the food you need over and over again.

Arable productive land is the thing humans have needed as long as there have been humans. Lately, we have constructed an economy that devalued the importance of arable land. (And farming, etc.) But basic human needs have not changed for the last several hundred thousand years.

It all depends on whether or not what we are doing now is sustainable. If it is, the value of your land may not increase a whole lot. But it probably wont decrease a whole lot either, as it is pretty much a burst bubble atm. The value of your gold may very well come down sharply if the economy ends up working out fine, as it is at an all time high, and MAY be a bubble itself. It also may increase, its hard to say. One bet seems riskier than the other to me. But it really is an individual choice.



posted on May, 30 2010 @ 05:03 PM
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Originally posted by Illusionsaregrander



I don't disagree with you that the system needs to be reworked a bit. I don't how it should be but something probably has to give eventually. My argument is the disasters you are looking for are not the right ones. At least not immediately. We will eventually get inflation, perhaps massive if entitlement programs aren't cut drastically and if the economy recovers. But immediately...no/

And like GBM stated, the stock market has been romanticized by a lot of people. Like in the gold ole days...things weren't like this. It absolutely was but worse. They didn't have computers back then so couldn't scalp .001 pennies per share. But they could manipulate prices and spread false information and do insider trading. Markets will always be gambling atmospheres for people. There will always be arbitrage. That sounds scary and complex and in the financial world you have to use derivatives and currencies and whatever else. But in the regular markets arbitrage happens...if in Salt Lake City a piece of cloth is selling for 20 dollars and you can buy it in New Orleans for 5 dollars the difference is 15 dollars and thus an arbitrage. These things will always exist. Gambling has always existed. Don't try to romanticize the way things were and instead created fiction.



posted on May, 30 2010 @ 05:13 PM
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Originally posted by boondock-saint
I would disagree with that analogy
due to the fact that the same corrupt
people in this system will invade the new
system like a virus.

Only a crash where EVERYBODY loses
everything can there be equality in
a new start. Else ur just trading one
corrupt system for another one.


I don't think you really understand how this whole thing works. There is physical wealth, the whole thing isn't entirely made up. That is not to say our currency hasn't been watered down ridiculously. Currency does not equal wealth directly though.

Whoever sells at the top of a market bubble is the person who consolidates the wealth. That is what a crash is in reality. It's a consolidation of wealth. Overvaluing creates perceived wealth, sure.


A smart person, and trust me the people at the top of the economic food chain are smart people (or can buy smart people to do their bidding) will be able to sell before the markets collapse, and then buy after they have.

What do you think happened this last crash? Value didn't just disappear into thin air. Certain people made a ton of money and increased their holding of wealth. They made money then that money increase in value. They made money coming and going while you lost your shirt.


You call for a crash. All that would do is consolidate wealth to the top. You would be contributing to the system you claim to hate. The reason they cause fear is to convince people to sell, to erase value, that way they can buy up the slack for a much cheaper price. It is unfortunate you can't see the system for what it really is. Those who succumb to fear will lose. They will always be a step behind and they will give the people who are playing the game everything for a discount.

If I'm a business man looking to accumulate wealth and consolidate to the top, the easiest way to do that is to create fear in the market. I won't give an in-depth break down as to why fear is such a great business tool, but trust me it is.



posted on May, 30 2010 @ 05:18 PM
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reply to post by grimreaper797
 


Very nice job grimreaper!



posted on May, 30 2010 @ 05:18 PM
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Originally posted by GreenBicMan

The stock market in the early 1900's was a mechanism for gambling much more than it is today.



The stock market didnt begin in the 1900's, but I dont dispute that by then it was already a mechanism for gambling.

www.nyse.com...


The New York Stock Exchange traces its origins to 1792, when 24 New York City stockbrokers and merchants signed the Buttonwood Agreement. This agreement set in motion the NYSE’s unwavering commitment to investors and issuers.


www.stockmarketinvestinginfo.com...


History brought us the Industrial Revolution, which also played a role in changing the face of the stock market. New form of investing began to emerge when people started to realize that profits could be made by re-selling the stock to others who saw value in a company. This was the beginning of the secondary market, known also as the speculators market. This market was more volatile than before, because it was now fueled by highly subjective speculation about the company’s future.




And I will watch the video. Thanks for the suggestion. It may or may not change my mind. I dont agree with many of the current views in economics. And I may be wrong. But then, so are many of todays current
economists. All of their great theories about how to keep the economy on an even keel just dont seem to be working as intended. Even Alan Greenspan has had to admit that his theories on "how it should be" were wrong.

www.guardian.co.uk...


A long-time cheerleader for deregulation, Greenspan admitted to a congressional committee yesterday that he had been "partially wrong" in his hands-off approach towards the banking industry and that the credit crunch had left him in a state of shocked disbelief. "I have found a flaw," said Greenspan, referring to his economic philosophy. "I don't know how significant or permanent it is. But I have been very distressed by that fact."


So, if I am completely clueless, at least I am not alone.



posted on May, 30 2010 @ 05:20 PM
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reply to post by HimWhoHathAnEar
 


You don't purchase gold for the sole reason of hedging. That's to simplify the market. If gold was only a hedge then every time the dollar goes down, gold should go up, but I can assure you that isn't the case. There are plenty of time where both gold and the dollar rise and fall in unison.

You know why Soros is buying gold? I am betting I do? It's the next bubble. The only way to make more money off that bubble, is to push fear. That is exactly what he is doing.

Gold will be the next bubble. Every week that goes by the limit to that bubble rises a bit. I recently felt 1800 was the upper limit but now its looking more like 1900 is the upper limit and I bet it could be more based on market conditions.

Investing in gold now is a great idea, only if you can pick the perfect time to sell it before the bubble pops.



posted on May, 30 2010 @ 05:26 PM
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Originally posted by grimreaper797

You call for a crash. All that would do is consolidate wealth to the top. You would be contributing to the system you claim to hate. The reason they cause fear is to convince people to sell, to erase value, that way they can buy up the slack for a much cheaper price. It is unfortunate you can't see the system for what it really is. Those who succumb to fear will lose. They will always be a step behind and they will give the people who are playing the game everything for a discount.



I cant speak for Boondock, but when I personally say I would like to see the whole thing come crumbling down, I dont just mean so that people can buy and consolidate wealth. I would like to see the whole mechanism that allows the creation of bubbles and the bursting of them to come crumbling down.

I agree with you about how fear is used to manipulate. And unfortunately, the ability to profit from the stock market is dependent upon having information that has real value, not information that is a form of manipulation, intended to drive you to behave one way or the other.

The whole mechanism needs to be disabled. IMHO. Not just a bubble burst on the way to another cycle.



posted on May, 30 2010 @ 05:28 PM
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reply to post by Illusionsaregrander
 


www.youtube.com...

Here you go

There is a movie where it is all in one, but unsure of where I can find it now.

The early 1900's great depression in most part was due to rampant speculation in the stock market as well as massive manipulation, Insider actions.....

That is why we have FINRA etc. now because of all of this in the past. The stock market was always a gamblers outlet.

Although it may have started pre 1800, it wasn't until 1850 I believe where we saw our first downfall. Someone can correct me but I think it was some railroad that went down. Anyway, it wasn't until 1900's that the market became a tool where many were invested/whatever you want to call it.

I have studied this quite a bit, and in the end there are no separating the gambling/investors as they have always went hand in hand.



posted on May, 30 2010 @ 05:34 PM
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Originally posted by boondock-saint
think u folks got it all worked out huh ??? lol

What Soros don't know is that he and all of you
are only buying digital gold. The real gold bars
do not exist to be traded. So when you go to cash
it all in, all of ya is gonna get one hell of a shock.
Ur gonna be in the same boat with us peasants

hahahaha

do ya'll really still think there's gold at Ft. Knox?
or the Federal Reserve?????


No I'm going to sell my 1900 dollars an ounce to over simplistic "investors" (can I really call them that) who think that gold is just a hedge against the dollar or some other simplistic idea.

In other words, I'll sell it to overly simplistic "investors" when I think it's time to cut and hold onto whatever I feel will go up, not down, in value.



It's under private control for the NWO and probably
hidden in some DUMBS facility far away from the
civil unrest which is about to happen when the
monetary system falls.

Anybody left in the markets around the world now
are just suckers. But best wishes with ur longshot
attempt at making a fortune. Ur fate has already
been decided and ya'll don't have a clue.


Hey, just stay out of the game if you don't understand how it's played.



posted on May, 30 2010 @ 05:36 PM
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reply to post by GreenBicMan
 


I dont disagree with anything you have said. Which is why I am not sure why we seem to be disagreeing.

I think the idea of selling stock to raise capital is a fine idea.

It is all the manipulation, insider trading and speculation that seem to be the problem. Its that secondary market that causes the problems. Its value skimming. Not value adding. And its problematic for societies, rather than being good for them. It does allow those who can manipulate the system to become very rich, but the question we need to ask ourselves is whether or not their becoming rich is worth the cost to society in general. If you believe in trickle down economics, you might think it IS good for society in general. I dont believe economies trickle down. I believe they trickle up, they always have, and the whole idea of trickling down in a laughable fallacy.

Others may disagree.



posted on May, 30 2010 @ 05:37 PM
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reply to post by Illusionsaregrander
 


But it won't it never will. The GLOBAL financial system would have to collapse. It's simply not possible. Just because the United States or a couple countries in the European Union have major debt issues does not mean the "system is in danger".

China has to put down restrictions to SLOW their growth. They are part of the global system of economics. It's here to stay, so learn to play the game, or stay away from it. The only way the system will change is if you become a major player in it and force the rules to be changed by out-maneuvering the other major players.

If you can out fox them and acquire enough of their wealth, then you can make the rules.



posted on May, 30 2010 @ 06:01 PM
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Originally posted by MrDarlingFace


I fail to understand that because it isn't true. Gold in 1970 was 35 dollars/ounce. Are you saying the dollar has been devalued that much since then to constitute gold being almost 1300 dollars an ounce now? That would be like saying a middle class house in 1970 cost 30,000 dollars back then and that same house would cost around 1.2 million dollars now. A house in 1970 that cost 30K would not cost 1.2 million right now. 35 dollars in 1970 did not equal 1300 dollars in today's money. So either gold was UNDERVALUED (and thus not worth the same as it always has been) or is OVERVALUED right now. Your defense is gold is always FAIRLY valued. Always constant. Yet nothing has increased that exponentially from 1970 to 2010...not even public college education or healthcare!



I think people are having an ass backwards view of value.

If I make 10,000 dollars a year and a house costs 30,000 dollars, then the house is worth value of 3 times what I make in a year.

Now, if I am making 100,000 dollars a year and that same house now costs 300,000 dollars, it's value is still 3 times what I make in a year.

Not to mention value is variable. The value of something is subjective to need or want, aka demand. Demand controls specifically what the value is.

(I just looked up what the median price of a house in 1970 was and it was 26,600 dollars and the average income was 8,734 dollars. I was pretty close for a guess on something I wasn't even alive for!)

Without going into detail, we all know that the housing bubble was just that, a bubble on HOUSING. It was not a bubble of the dollar. The demand for houses skyrocketed and caused a perceived value jump.

In reality, all things have no value, if I have so much of it I don't need it. If I have a guaranteed lifetime supply of oil, what is the value of oil to me? Nothing.

So lets not go on saying the dollar is worthless, or this is worthless, because everything varies in value. The dollar is merely a representation of that value.

"Devaluing" or creating money works against those who give credit. Now keep and mind that doesn't apply on an individuals level. You can run over to the credit card company and think you can beat them because of currency devaluation. Not going to happen. Reason being you don't get the same interest rates on debt that countries do.

Devaluing currency too fast is bad because the market cannot correct itself fast enough. Devaluing money is good for the borrower at the right speed because it devalues the debt as well. Not only does that mean that we owe less debt, but the interested on that debt has less value.

I'm going off on a tangent here so I'll get back on track.


Value is perceived. The value of the dollar has not gone down, as the market has readjusted itself to the value of the dollar. The only way you can say the value of the dollar has gone down is if prices skyrocket but the dollar does not. That means that the value of the door has gone down. This simply isn't the case.

ALSO note that you can't be like "well milk went up and my wages didn't so the dollar is losing value" There are too many factors to use the price of milk for you in your area recently, to justify that statement.

It is a complex system, and that complex system says the dollar still has a strong value.


Oh and by the way, gold is definitely overvalued. That doesn't mean sell it, as I think it will bubble to extremely overvalued.



posted on May, 30 2010 @ 06:13 PM
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Originally posted by Illusionsaregrander

With all due respect, if hope and faith are the only things keeping the market afloat, it needs to crash.


It isn't the only thing keeping the market afloat. It's the only thing keeping the market from being undervalued and allowing certain people to "Steal" the stock market.

If a bunch of people lost faith in the market, in reality what that means is that a majority of people lost faith in the ability of most the market to create profit.

Fact is, this simply isn't true. There are plenty of companies out there that will be profitable. They will be profitable for a variety of reasons.

The problem is most people don't see that because they aren't investors, they are average people. They shouldn't be involved in the markets. They should be hiring somebody who knows what they are doing, but they think they can do it themselves.



Stock prices may very well be based on things like "consumer confidence" but the question is, "Should they be?"


For some sectors? YES. For instance, retail. Consumer confidence is a key way in figuring out if they will be profitable or not. If consumer confidence is plummeting, I am not going to invest my money in a technology retailer, especially not one with a variety of other factors working against it like a debt ridden balance sheet and low cash on hand.



Or should there be a more stable way of valuing a company than simply the whim of the gamblers that particular day?


That is really oversimplifying the markets...kind of the entire problem with the markets actually. Massive amounts of people handling their own funds who oversimplify the markets and act on that.



Another question is, do we really want to sustain the markets if they are not working properly? One of the reasons I personally was opposed to the bailouts is because if you prop up a building that has a screwed up foundation, you are buying time. Not solving the problem. Some problems require a complete tear down in order to reconstruct on a more solid foundation. The Wall Street Casino may well be one of those things requiring a complete tear down.


Wall street is a part of the system, not it's entirety. We, as a country, simply don't have a say in whether or not "the system" gets restarted or not. The world will leave us behind. Not to mention, it isn't the markets that aren't working properly, it is government. THAT we have control over.

Government reform would go a long way toward reforming our local economy. After all, you don't see china having the same crisis. Part of the reason is that the government wouldn't bailout their businesses and reward failure. They don't borrow far more than they should instead of cutting costs.

Am I saying china is a model government? NOOOO WAY. I would never want to live under a government like theirs. But it is a lesson to you that it isn't the system that is the problem, but the people trying to control it for their own ends (government.)



posted on May, 30 2010 @ 06:19 PM
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reply to post by Illusionsaregrander
 


If you can find a route to a better faster progression of our being, let us know. As of right now, stock markets are the best, most effective way, for a company to raise money to give you technology and easy of life we have become accustomed to. If you have a better idea, share it. I'm all for seeing a more rapid expansion of technology and growth.



posted on May, 30 2010 @ 06:27 PM
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Originally posted by grimreaper797

Originally posted by boondock-saint
I would disagree with that analogy
due to the fact that the same corrupt
people in this system will invade the new
system like a virus.

Only a crash where EVERYBODY loses
everything can there be equality in
a new start. Else ur just trading one
corrupt system for another one.


I don't think you really understand how this whole thing works. There is physical wealth, the whole thing isn't entirely made up. That is not to say our currency hasn't been watered down ridiculously. Currency does not equal wealth directly though.

Whoever sells at the top of a market bubble is the person who consolidates the wealth. That is what a crash is in reality. It's a consolidation of wealth. Overvaluing creates perceived wealth, sure.


A smart person, and trust me the people at the top of the economic food chain are smart people (or can buy smart people to do their bidding) will be able to sell before the markets collapse, and then buy after they have.

What do you think happened this last crash? Value didn't just disappear into thin air. Certain people made a ton of money and increased their holding of wealth. They made money then that money increase in value. They made money coming and going while you lost your shirt.


You call for a crash. All that would do is consolidate wealth to the top. You would be contributing to the system you claim to hate. The reason they cause fear is to convince people to sell, to erase value, that way they can buy up the slack for a much cheaper price. It is unfortunate you can't see the system for what it really is. Those who succumb to fear will lose. They will always be a step behind and they will give the people who are playing the game everything for a discount.

If I'm a business man looking to accumulate wealth and consolidate to the top, the easiest way to do that is to create fear in the market. I won't give an in-depth break down as to why fear is such a great business tool, but trust me it is.


And you speak as someone with no idea what is just around the corner.

Wow, a few of you people just aren't getting it.



posted on May, 30 2010 @ 06:32 PM
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reply to post by Illusionsaregrander
 


Furthermore, if you really want to change the system for the better, IN MY OPINION, the best way would be to not allow people to have any control over what they are allowed to invest in unless they have certification to do so.

People without proper certification simply shouldn't be allowed to take part in the markets. If they want to hand their money over to somebody who does understand it and have that certification, by all means do so. But allowing people to pick what stocks they want to invest in, if they want to buy gold stocks, oil stocks, etc. etc. they should need certification.

Anyone certified wouldn't fall for the scare tactics, would understand what the consumer confidence index MEANS for investors, etc. etc.

Essentially, we need less people involved in the trading portion. They are too easy to misguide and manipulate.

This isn't like the 1930's when credit collapse caused a collapse. Bubbles are causing our problems now. These bubbles are created by people who don't know what they are doing and making poor investments in something already overvalued. They aren't following market fundamentals and are actually purposely investing in bubbles with the idea of selling before the bubble pops and screwing the people who didn't realize it was a bubble.

It will be like gold. So many people on here are buying gold because they think the dollar will collapse or something ridiculous. I'm buying gold because I know they are going to buy much more gold before the whole thing pops like a bubble.

I'm not investing in the value of gold, I'm investing in the foolishness of others to buy something way overvalued. And they will, because they don't understand the market. That is the problem we keep hitting.



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