World economy talk

[uls]

http://finance.yahoo.com/q/bc?s=EURU...=on&z=m&q=l&c=
Euro/USD 2 year

[uls]

If everyone is debasing their own currency, the USD would be falling against other falling currencies

no argument there, sir emanzano

who would have known there would be global coordinated rate cuts?

and everyone would be looking after their own economies...

beggar thy neighbor

---

Told you these guys know their chops.

i still believe those guys are experimenting and don't really know the outcome of their actions...

they are learning as they go

hehe

[emanzano]

Yeah I am not arguing against pitting paper money against paper money. They are all just printing it away anyway so in the long run more or less lang yan... While there are some paper money (fiat money) that might strive better than some (IMO the Yen and the Swissy) they will also depreciate against real assets... But are you willing to bet that in 5 years time that Gold price will remain the same? I am betting 5 years from now Gold will be $2000 who knows? Pero sigurado gold lipad yan, oil too and pretty much any real asset like land and agriculture.

FREE FALL AGAINST REAL ASSETS. Now I will bet on that!

Firstly, NOTHING will be worth the same in 5 years. Not oil, gold, cars, water, etc. NOTHING. These will all be affected by inflation. But my point is, EVERYTHING will be affected by inflation. It's as inevitable as death and taxes. So prices go up, but so do our salaries. These will just negate each other's effects. Hyperinflation is a different matter. But like i said in one of my prevous posts, i dont think that will happen, simply because all the First world nations are doing the same thing to their economies, so the effects will just cancel each other out, more or less.

When you say "lipad", care to quantify it? Maybe you can peg how much gold will be in a year's time, then let's compare it to the US inflation rate for the same period. If we're talking about a +-10% difference, in my opinion, hindi "lipad" ang tawag doon.

"Free fall against real assets." - again, how do you define a "free fall"? Let's compare how much Land would cost a year from now (xmas time 2009). My guess is that Land would probably be lower than it is today because of all this deleveraging. And most likely, there wont be a +-10% difference between land cost and where the USD will be at that time.

[emanzano]

http://moneycentral.msn.com/investor...rm=1&CP=0&PT=9

hi uls if you would be kind enough to post the chart in the above link, i would greatly appreciate it.

the graph there shows the 5-yr chart of the Euro vs USD. If we perform a technical analysis on that chart, we will see that the Euro has been appreciating vs. the USD by around 3% per year. The spikes and dips are just short-term effects of knee-jerk reactions of the various govts (such as what happened between July to Dec of this year).


Now, the graph below shows the the Euro:USD chart over the past 10 years. (Again, uls, if you would kindly post it please.... sorry, you'll have to teach me how you post these charts )

http://moneycentral.msn.com/investor...m=1&CP=0&PT=10

If we could all recall, the dotcom bubble in the US peaked in 2000, and hit rock bottom during the end of 2002. During Jan '00 to June'02, the USD even appreciated vs. the Euro. (http://pls check NASDAQ Index on thi...Dot-com_bubble).

The current housing bubble is similar to the dot-com bubble Yes, you may argue that there are diffirences, but in essence they are the same, i.e., "unrealistic valuations". But during the the dotcom bubble burst, the USD did NOT free fall. Personally, i expect the USD to depreciate annually vs the Euro and/or other major currencies (between 3% to a max of 5% per year). But it will NOT freefall as you predict it (i define freefall as approx 10%-15% per year). Why? Because i think that anything less, we can survive it.

[emanzano]

i still believe those guys are experimenting and don't really know the outcome of their actions...

they are learning as they go

hehe

we will see soon enough, my friend.

[tidus1203]

Firstly, NOTHING will be worth the same in 5 years. Not oil, gold, cars, water, etc. NOTHING. These will all be affected by inflation. But my point is, EVERYTHING will be affected by inflation. It's as inevitable as death and taxes. So prices go up, but so do our salaries. These will just negate each other's effects. Hyperinflation is a different matter. But like i said in one of my prevous posts, i dont think that will happen, simply because all the First world nations are doing the same thing to their economies, so the effects will just cancel each other out, more or less.

When you say "lipad", care to quantify it? Maybe you can peg how much gold will be in a year's time, then let's compare it to the US inflation rate for the same period. If we're talking about a +-10% difference, in my opinion, hindi "lipad" ang tawag doon.

"Free fall against real assets." - again, how do you define a "free fall"? Let's compare how much Land would cost a year from now (xmas time 2009). My guess is that Land would probably be lower than it is today because of all this deleveraging. And most likely, there wont be a +-10% difference between land cost and where the USD will be at that time.

How about double in 3 years for Gold? So around $2000 or maybe even $3000 by the time Obama's administration is done. emanzano, never in the history of the world have they increased the money supply at such a sharper pace than they are doing today... Although those guys never print the M3 stats anymore (one wonders why?) the last time they did we saw a really sharp increase in the slope of the M3 upward. And we have to also remember that the national debt of the US has increased significantly since they stopped printing M3 and this year alone they have nearly doubled their debt because of all these bailouts and prop ups. Now you don't have to be smart to realiz that when the debt increases siguradong pati money supply increases. Yes everything right now is falling, EVERYTHING because of deleveraging. But are you saying deleveraging will still be upon us in 5 years time? IMO deleveraging will be temporary and if you print enough money eventually the economy will be back up again of course with unintended consequences. That's is why I am buying gold. In fact if you like the USD so much I have a handful here and if you have gold bars or coins I will buy it from you even higher than market prices

[tidus1203]

http://finance.yahoo.com/q/bc?s=EURU...=on&z=m&q=l&c=
Euro/USD 2 year

This chart tells you why I am a trader and not a buy and holder. Buy and Hold is DEAD!!! You should know when to get out as well...

[uls]

sir Emanzano, copy image location

5 year Euro/USD


Quote by sir Emanzano:

the graph there shows the 5-yr chart of the Euro vs USD. If we perform a technical analysis on that chart, we will see that the Euro has been appreciating vs. the USD by around 3% per year. The spikes and dips are just short-term effects of knee-jerk reactions of the various govts (such as what happened between July to Dec of this year).

10 year Euro/USD


Quote by sir Emanzano:

If we could all recall, the dotcom bubble in the US peaked in 2000, and hit rock bottom during the end of 2002. During Jan '00 to June'02, the USD even appreciated vs. the Euro. (http://pls check NASDAQ Index on thi...Dot-com_bubble).

The current housing bubble is similar to the dot-com bubble Yes, you may argue that there are diffirences, but in essence they are the same, i.e., "unrealistic valuations". But during the the dotcom bubble burst, the USD did NOT free fall. Personally, i expect the USD to depreciate annually vs the Euro and/or other major currencies (between 3% to a max of 5% per year). But it will NOT freefall as you predict it (i define freefall as approx 10%-15% per year). Why? Because i think that anything less, we can survive it.

[emanzano]

emanzano, never in the history of the world have they increased the money supply at such a sharper pace than they are doing today... Although those guys never print the M3 stats anymore (one wonders why?) the last time they did we saw a really sharp increase in the slope of the M3 upward. And we have to also remember that the national debt of the US has increased significantly since they stopped printing M3 and this year alone they have nearly doubled their debt because of all these bailouts and prop ups.

You know tidus, you never actually answer my points. everytime i post, you mostly reply with sweeping generalizations, classroom theories, and sometimes BS.

How about double in 3 years for Gold? So around $2000 or maybe even $3000 by the time Obama's administration is done.

double for gold in 3 years? that's just a little over a 25% increase per year. That's hardly impressive since Gold has appreciated consistently by an average of 16% per annum for the last 5 years (it was $400 per ounce in 2003). And compare this to the over 50% devaluation of Asian currencies within a year back in '97, it's hardly newsworthy. But hey, I'll be happy to take your lunch money. What would you like to bet? The all you can eat proposal in starbucks? So how much is Gold Today?, then lets track it again xmas 2011. We can track it annually too although i highly doubt it will cost around $1,050 per ounce next xmas.

Now you don't have to be smart to realiz that when the debt increases siguradong pati money supply increases. Yes everything right now is falling, EVERYTHING because of deleveraging. But are you saying deleveraging will still be upon us in 5 years time?

Firstly, you just parroted my post when i said that everything was subject to inflation due to deleveraging. However, where did i say that there will be deleveraging 5 years from now? What i said is that inflation will forever be with us. Prices will always go up in the future no matter what we do. That was my point.

In fact if you like the USD so much I have a handful here and if you have gold bars or coins I will buy it from you even higher than market prices

I only have around $3k set aside for travel (i mean, why would i need more when i'm a filipino living in the philippines, diba?). I bought these at P44:1. If i sold it today, i could get P46:1 for it. Wow, i would even make money! So for a filipino who's in possesion of $100k now, are you saying that he should get the hell out of the US$? If he bought that 3 months ago at P46:1, are you saying he should "GET OUT of the US Dollar NOW!!!" (as your title says) and basically sell it at the same price? Why should he get out of it, because there's a chance that the Peso will appreciate to P40:1 in the next 3 months (that's just a 15% appreciation, nothing spectacular compared to the devaluation in '97)? Aside from market blips, when in our history did the Philippines Peso appreciate medium-term against the USD? Never.

Now i'm beginning to see how useless this warning is to 99% of Filipinos.

[emanzano]

This chart tells you why I am a trader and not a buy and holder. Buy and Hold is DEAD!!! You should know when to get out as well...

Buy and Hold is dead??? Are you kidding me?! Timing is everything in this game, dude. When things bottom out next year and things go back to their true valuations, it will be time to buy & hold again.

And some people think common sense is better than an MBA or a PhD...

Your post proves nothing except that you day trade.

[tidus1203]

Nope I don't day trade (I don't see anything wrong with day trading though its actually quite profitable if you know what you're doing) but I always have an exit plan. Buy and hold is dead IMO. If you bought stocks in 2003 which was the low after the NASDAQ bubble and held until now you basically did not make money and factor in inflation you are down so much. If I bought at 2003 and exited in early 2007 I would have made around 40% not a great amount but I guess better than losing money... But if you want to buy and hold its up to you, I will always have an exit plan. In that EUR/USD chart if you didn't have an exit plan you are basically back where you where when the year started.

[tidus1203]

By the way I also made substantial amounts on the Yen and I exited 80% of my positions already. You see, markets always give opportunities to make money but it will always take it back if you don't want to exit... I am not saying the Yen will no longer go up from here but you ahve to also know when to pack up and take profits because if you don't di mo mamalayan Y100 na ulit ang USD and you lost a lot of opportunity.

[tidus1203]

Regarding inflation: I am not predicitng mild inflation by all means. If these people successfully reflate the economy I am thinking in the regions of 15%-20% inflation in the USD. Foreign countries will stop lending the US money and eventually the USD loses its status. And don't tell me it won't happen. It happened before in the British Pound.

[uls]

USD index
http://www.bloomberg.com/apps/quote?ticker=DXY%3AIND


Gold price
http://www.kitco.com/charts/livegold.html

[emanzano]

Nope I don't day trade (I don't see anything wrong with day trading though its actually quite profitable if you know what you're doing) but I always have an exit plan. Buy and hold is dead IMO. If you bought stocks in 2003 which was the low after the NASDAQ bubble and held until now you basically did not make money and factor in inflation you are down so much. If I bought at 2003 and exited in early 2007 I would have made around 40% not a great amount but I guess better than losing money... But if you want to buy and hold its up to you, I will always have an exit plan. In that EUR/USD chart if you didn't have an exit plan you are basically back where you where when the year started.

Just to clarify... i didnt say there was anything wrong with day trading. In fact i do day trade sometimes. yes, it's quite profitable if you know what you're doing. So i congratulate you if you made a killing.

Again, all of this is about timing. Even a buy & hold strategy requires a lot of analysis, and you will either win or lose money based on your timing. So next year would be a good time to get into equities again (like GE and other blue chips). And how long should we hold on to them... 1 year, 2 years? it all depends on the timing. IMO, holding a stock longer than 6 months is already a buy & hold strategy.

[emanzano]

Regarding inflation: I am not predicitng mild inflation by all means. If these people successfully reflate the economy I am thinking in the regions of 15%-20% inflation in the USD. Foreign countries will stop lending the US money and eventually the USD loses its status. And don't tell me it won't happen. It happened before in the British Pound.

Here is my forecast... US inflation will NOT reach 15%. Reason is that the other first world countries are also pump priming their economies. If only the US did it, then i would agree with you. But since parts of europe, china, japan are doing it also, then they will just cancel each other out, more or less.

For the US, i think 10% inflation would be the ceiling. But we will see. Besides, I too, am just an armchair economist.

[emanzano]

uls, thanks a lot for posting the charts.

aside from the differing opinions, i find a lot of value in these data charts as they represent "the proof of the pudding." These are the hard facts, and it is up to us individuals to interpret them. Obviously, you see things differently than i do. But that is good since i'm forced to reflect upon my own analysis more in-depth. And if i still believe in my point of view, then my belief is already stronger since i've already bounced it off yours. And i am a better man for it, as i sure you are too.

[tidus1203]

Just to clarify... i didnt say there was anything wrong with day trading. In fact i do day trade sometimes. yes, it's quite profitable if you know what you're doing. So i congratulate you if you made a killing.

Again, all of this is about timing. Even a buy & hold strategy requires a lot of analysis, and you will either win or lose money based on your timing. So next year would be a good time to get into equities again (like GE and other blue chips). And how long should we hold on to them... 1 year, 2 years? it all depends on the timing. IMO, holding a stock longer than 6 months is already a buy & hold strategy.

Nope 6 months is not buy and hold. The concept of buy and hold is just cashing it in when you need the money otherwise hold. So if you do 6 months that is a trade. Even some people make multi-year trades people like Jim Rogers do trades on the macro level that's why he holds trades even for 5 years. I am more of the swing and position type of trader. Within the year normally... But Gold for me is near buy and hold unless something changes. The market and the economy is flexible and is not constant so we too should be flexible and not constant. If things pursuade me to think that inflation in the US will be contained even after all these monetizing and reflating then I will retract my ideas but everything I see points to that and they are now even more (Obama's massive stimulus when he gets into office) likely to reflate and increase the money supply so I stand firm that inflation will be in the double digits when they successfully reflate...

[emanzano]

Nope 6 months is not buy and hold. The concept of buy and hold is just cashing it in when you need the money otherwise hold. So if you do 6 months that is a trade.

Six months is not a buy & hold? It's only a "buy & hold" strategy if i sell it because i need the money?? So you mean if i buy stocks today then forget about it, then 6 months down the road i realize that i've made enough money already and i want to cash in even if i dont need the money yet, then it's not a buy & hold strategy? Come on dude, dont get stuck on textbook definitions! Besides, where do you get these definitions anyway???

If things pursuade me to think that inflation in the US will be contained even after all these monetizing and reflating then I will retract my ideas but everything I see points to that and they are now even more (Obama's massive stimulus when he gets into office) likely to reflate and increase the money supply so I stand firm that inflation will be in the double digits when they successfully reflate...

We're simply exchanging point-of-views. It's good that you stand firm on your ideas. And no one's asking you to retract anything (maybe some are just asking that you take it easy with the Fed-is-so-stupid remarks, including me).

[slamtaz]

errr... if i may butt in, stocks are essentially & intrinsically meant to be traded &/or used in trading. so whether you buy & hold or take a long/short position, all these are trading activities that anyone who deals with stocks does. i believe, it all starts when a stock is issued and only ends when the same is retired.

historical analysis coupled with current evaluation of fundamentals (e.g. social, political, financial) both on the macro and micro levels inclusive of any &/or all decisions made that alters all these will affect how any one stock, commodity or what not will be valuated.

but as always, predictions and forecasts are just like a boxing match, all the factors i mentioned in the preceeding paragraph will matter but even with the most sophisticated, scientific, elaborate approach &/or methodology, still there will always be the so called "unforseen" events that can turn the tide of events. and i know, all the former were meant to minimize the impact of any unforseen event and some even to the extent of factoring such unforseen event (though i wonder how, since it's unforseen in the 1st place )

if we're to use this thread as an example, what was the PHP/USD exchange rate when this thread started? i'm sure a lot of analysis & a strong conviction went in to come up with this statement so let's see, if anyone holding on to USD dumped it wayback when the thread started, would they have gained more or less as compared to right now? i'm sure it will all vary depending on when you did or will dump it.

i would like to share the point that it's always good have a principled conviction as to how things will happen, but until such time it happens, all predictions/forecasts will remain as such, prediction/forecast. nothing more, nothing less. so, i guess it will be good for the discussion to go easy on making such very strong pronouncements as to how ridiculous, stupid, astute, spectacular (insert other derogatory or appreciative adjective here) a decision/action is because, for one, unless we ourselves made such decision/action, we will never be 100% sure how exactly some other person or group of person made theirs.

my :twocents:

:peace: