The following account was written by an Argentine Banker who lived through his country's currency collapse. His grammar is not the best, but I think you get the idea. As stated at the end of the article, there are steps that can be taken now to profit from the coming dollar collapse. My understand is that there were more millionaires made during the Great Depression than at any other time in our history.
Also, click this link to find out just how close Britian came to a bank run last fall.
lunes 26 de enero de 2009
Strongman Shelford 's experience and predictions with meltdowns for YOU NOW.
Hi . You all know me. For those who don`t know me, I am a bank analyst in South America .
I trading stocks for almost more than 10 years. I followed the US markets for years too.
I have lived my first hyperinflation times in full conciousness at the age of 9. I remembered those times in a very clear way.
Times like 50% inflation per MONTH OR MORE. yES. Prices just double in matter of weeks.
I remembered the people talking about the DOLLAR ( save haven) every day every week.
The key was to collect your month pay, and run to buy all the food and stuff. I remember that While we were shopping , a food store employee was changing prices with some kind of machine, can by can, product by product. The key was to grab your food to the cashier before it got the new "price tag". ( not all the food store owned those codbars systems like now).
Life made me live in full consciouness the Argentinian collapse in 2001. Just like the Iceland collapse of now.
Bank run, devaluation overnight... freezing bank accounts, mess, president and economy minister escaping in a helicopter... food shortages... riots...the whole mess.
I got a business degree some years after the collapse at a very prestigious university . With this knowledge, I looked backward and I could understand the crisis very well. There are "Patterns" developing before a total meltdown.
I am trying to build your confidence in my words. Since I am afraid to tell you that most of the American people and certainly most of the people in the planet CANNOT ACCEPT THAT AMERICA IS HEADING TO A TOTAL MELTDOWN SOON. I DON`T UNDERSTAND WHY PEOPLE LIVE IN DENIAL. I HAVE ALERTED FRIENDS, RELATIVES, and even some co-workers.
But people live in "denial". America is "super power". "The dollar will not collapse." " It is "safe haven" for all the countries... " So, the whole sheeple of all the countries around the world live in denial about this great event that is going to take place , i believe, this year or next year.
I read 2 or 3 hours per day news from all around the world ( business news , market news: CNBC,BLOOMBERg,CNN MONEY,blogs, message boards, you name it).
And you can see a "shift in the paradigm" and these patterns developing that is SO CLEAR that you can`t believe why so many people cannot see it.
This guy , H. Paulson was a crook right? Ok, now there is another "crook" who is taking care of the "Treasury" ( being looted thorough "stimulus package" and providing a real party of inside trading there for crook friends)
The new guy, T. Geithner> he is starting very well! ( Senate look away "his tax income issues" ...LOL) AND THE arrogant stupid is telling CHINA ( country with the power to decide when USA is going to collapse) "hey you are manipulating your currency".
China, with their chinese patience, politely responded "mind your own business , moron. Eh, No, I am not interested in bringing you chaos right now. Go play with your printing press for now..."
IT is just unbeliavable.
And the SOLUTION: BUY THE PROBLEM. YES . Just create a bank to dump the garbage...or nationalize all the banks. let`s "buy the problem". LOL.
YOU CAN`T BUY THE PROBLEM!!! They are just winning time ( a.k.a looting the treasury to last moment) before everything goes to hell.
THE PATTERNS MENTIONED HERE ARE:
1) STATES or provinces collapse BEFORE federal government ( it happens in all collapsing economies. Just read economic history)
>> Pattern visible in USA: California and other states
2) DEBT/GDP > above 100% and rising
>> I think is above 300% ( not counting the biggest liabilities I think)
3) FISCAL DEFICIT AND TRADE DEFICIT
>> This was the thing that brought Argentina to its knees.
>> USA is totally visible. Both "twin deficits" formed a "guaranteed" pattern of doom.
4) The politicians "keep spending to the end"
>> These happened in most of the countries which headed quickly to total collapse. This is clearly visible in USA. The incoming president proposed the "Change" and brought more of 3) More deficit ( Obama plan 1 trillion dollar in february 2009)
This is EXACTLY what happened in Argentina. The "new president" proposed the "change", but he brought more spending and country collapsed later. He escaped in a helicopter.
5) Smart money escaped to foreign assets or hard assets.
>I am TIRED of reading about this. Thank GOD THERE IS smart and honest PEOPLE warning there like Peter Schiff to the sheeple masses.
6) Honest politicians are ignored or "minimized" by MAIN MEDIA.
>>> this is what happened to Ron Paul. They only congressman I heard that understood very well the situation of the general economy. Maybe there are more out there. I don`t know.
7) In this kind of "BIG meltdowns" people live "above their credit possibilites" too. Not just the government.
> pattern is clearly visible too. A "credit card bubble" and "home equity spending" ( home equity spending, that is just amazing! Americans do it big)
8) A minority of smart people started to get ready for the collapse.
> There is always a "smart minority" that take advantage of meltdowns.
I will tell you WHAT WAS THE BIGGEST BUSINESS in Argentina :
a) take a mortgage loan
b) buy a house ( in USA is difficult since a housing bubble burst simultaneously, so maybe it is not a fully applicable for the US meltdown)
c) convert all your saving to foreing and safe assets
d) wait overnight devaluation
e) brinng back your assets .
f) cancel your debt.
g) Shazaaam! A house for a tiny part of your savings! Well done !
Ok, enough of economic history.
Bond bubble is starting to burst.
gold & silver is moving up again.
1) Be careful with your pension "money" ( IRA)
2) Keep your money safe in PHYSICAL ASSETS AND SAFE ASSETS LIKE GOLD IN SWITZERLAND
uSE GOLDMONEY IF YOU WANT OR OTHER SOLUTIONS
3) Don`t DENY THE INCOMING COLLAPSE. IT CAN TAKE TIME, BUT IT WILL ARRIVE.
These are my best wishes for all you.
It took me 20 minutes think and write this for you. I am sure it will help, and save you money!
Best wishes.
Publicado por Strongman Shelford en 17:39
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Close Call For US Banks
Don't Buy A Car Just Yet
Never forget that in the long run, supply and demand determines prices. The following was just forwarded to me, which tells me that car prices are going to drop significantly in the coming months.
"Here is a slide show of pictures of car storage lots around the world for new cars that have to be sold. Then, consider that US rail shipping dropped last month and its the same this month at something like 17% plus... that the world economy has a huge glut of unsold inventory which will result in drastic production cutbacks world wide to come in future months, and of course big layoffs world wide that come with that."
Slideshow
"With many manufacturers on extended Christmas shutdown, the number of cars rolling off production lines in December fell 47.5% to just 53,823."
"Here is a slide show of pictures of car storage lots around the world for new cars that have to be sold. Then, consider that US rail shipping dropped last month and its the same this month at something like 17% plus... that the world economy has a huge glut of unsold inventory which will result in drastic production cutbacks world wide to come in future months, and of course big layoffs world wide that come with that."
Slideshow
"With many manufacturers on extended Christmas shutdown, the number of cars rolling off production lines in December fell 47.5% to just 53,823."
Why I Am Leaving The Mainstream Investment Business
I entered the investment world in 1983, fresh out of college as a broker with Jefferson-Pilot Financial Services. In those 24 years I've seen a lot of change in our business. Some good, some bad, but hey, that's life.
For eight years I worked as an Investment Officer in several banks, but eventually left due to the conflict of interest between what was best for the customer and what was best for the bank.
Cheat the customer, or lose your job. I saved them the trouble of firing me.
After going independent in 1994 I came to appreciate the fact that investor's are often completely dependent upon the advice of their advisors, which is a responsibility that should not be take lightly.
And because of this charge, I have sought to hold the hands of my clients through the the inevitable financial turbulence that life brings. After all, that's what we get paid for!
To this end, I have applied the following principles successfully for the last 24 years:
1. Only buy quality investments
2. Don't speculate
3. Hold investments for the long term
4. Don't panic out of quality investments during the inevitable downturns, in fact, buy more while the price is lower
5. Don't be afraid to sell investments that deteriorate in quality
6. Diversify among non-correlated asset types to achieve overall portfolio stability
Those rules are a thing of the past.
The New Rules
There are no new rules. There are no old rules. We are in the wild west and the Sheriff (US Treasury and the Federal Reserve) is on the payroll of the biggest crooks in town (the bankers).
Let's look at the validity of the above "tried and true" principles, in light of the recent developments within the financial services landscape.
Buy only quality investments.
Sounds good, but what is a quality investment? Two years ago Fannie, Freddie, Wachovia and a host of other companies were considered the highest quality investments available. But with regulators looking the other way, shareholders of these companies have been raped by insiders who are supposed to be loyal to the shareholders, but are only loyal to themselves.
Financial statements are useless in determining which companies are quality and which are not. Companies routinely inflate their financials, giving the impression of health when there is really rot and decay underneath.
Don't Speculate
Financial commentator Erich Simon writes, "It is fashionable these days to anticipate market bottoms based on contrarian indicators. The greater the number of bears, the closer to a bottom. But this is not an economic truism. Indeed, if you take the quantity of bad news and the pace at which it is assaulting the system, this indicator now is telegraphing a system in collapse. We have only to look to the droves of Madoffs coming into view, swindlers who operated under the umbrella of the SEC, the Enrons and the Tycos of yesterday. Nearly every publicly traded issue is now being exposed as a post-GAAP sham.
How big a sham? If you take the total number of shares outstanding in every publicly traded company (using the Wilshire) and divide it by gross money supply (never mind debt comparisons) one can gain insight into the worthlessness of equities -- and the insulting charade of liquidity injections at any level."
In light of the above, ANY investment is a speculation at this point.
Don't Panic Out Of Quality Investments During Inevitable Market Downturns
From Chris Laird's Prudent Squirrel Newsletter
"And, this leads me to another concern, which we have talked about before, the idea that when you invest in the financial markets, even the bond markets, you are really investing in a black box. What I call black box markets. In other words, most companies are not truthful about their health many times. Honestly, would you entrust thousands of dollars to someone and not know their financial status and only rely on some report they give each quarter????The financial industry in particular. And, there is nothing being done to improve this either, particularly with no less than the US Treasury saying they won’t say who is getting the TARP money.
So, the point is, you need to err on the side of caution, and certainly not trust the financial media that much, and even companies’ financial reports. This all goes for investment funds and money market funds as well. This goes for ETFs and everything too. There are shenanigans everywhere."
In light of the above, an advisor no longer has any basis for recommending that a customer hold or sell and investments. It is a crap shoot at best.
Diversify for Safety
The straw that broke the camel's back for me was when I recently allocated a larger portion of my clients' funds into gold shares as the economy and stock market deteriorated. In addition, the currency devalutation caused by the bailout package should have made gold, and gold mining shares skyrocket.
The idea of the increased allocation to metals was to offset the deterioration fundamentals of our paper positions.
Sure enough, the paper investments dropped as they were supposed to. But the metals funds (not gold itself) dropped even more!
According to Erich Simon, "The mining equities collapsed because they are subject to the same corruption as the broader indices. “Corruption” is one man's quest to secure a larger piece of real estate. The primary corruption in all the issues was stock dilution through share-printing and marketing through Wall Street under government sanction. Shares were exchanged for currency, and currency is a claim against man-hours of work so that governments can apportion scarce resources.
So the government, Wall Street and corporate insiders absorbed all of the prevailing man-hours of work and laid claim to all of the scarce resources, foremost among them, time -- yesterday's, today's and tomorrow's.
Meanwhile, mining shares have been looted along with the rest of the publicly traded issues. They have an underlying value, but a great deal of that value will not be available to U.S. investors because these global ventures have been targeted and are being absorbed by foreign ownership: “passive” investment by China, and more aggressive takeovers by others.
Governments like Japan, with their own imperialistic mandate, are securing ownership at the expense of greedy insiders who have been bankrupted by financial deleveraging. Against the growing tide of East versus West, a hungry and focused discipline versus wanton excess and division, a battle is raging that the West seems likely to lose.
The international race for ownership of metals mines, however, is testimony to the worth of these metals -- for industry and value (money). Gold is strong and gaining as a monetary unit accepted by both East and West. While ideological skirmishes roil the borders of an overcrowded planet, the larger investment reality is resource depletion.
What was left of the dot.com bust rocketed into real estate. A part of that remaining wealth is today moving into gold."
Outside of tangibles (gold), it no longer is possible for the average investor or advisor to know where value lies.
(to be continued)
For eight years I worked as an Investment Officer in several banks, but eventually left due to the conflict of interest between what was best for the customer and what was best for the bank.
Cheat the customer, or lose your job. I saved them the trouble of firing me.
After going independent in 1994 I came to appreciate the fact that investor's are often completely dependent upon the advice of their advisors, which is a responsibility that should not be take lightly.
And because of this charge, I have sought to hold the hands of my clients through the the inevitable financial turbulence that life brings. After all, that's what we get paid for!
To this end, I have applied the following principles successfully for the last 24 years:
1. Only buy quality investments
2. Don't speculate
3. Hold investments for the long term
4. Don't panic out of quality investments during the inevitable downturns, in fact, buy more while the price is lower
5. Don't be afraid to sell investments that deteriorate in quality
6. Diversify among non-correlated asset types to achieve overall portfolio stability
Those rules are a thing of the past.
The New Rules
There are no new rules. There are no old rules. We are in the wild west and the Sheriff (US Treasury and the Federal Reserve) is on the payroll of the biggest crooks in town (the bankers).
Let's look at the validity of the above "tried and true" principles, in light of the recent developments within the financial services landscape.
Buy only quality investments.
Sounds good, but what is a quality investment? Two years ago Fannie, Freddie, Wachovia and a host of other companies were considered the highest quality investments available. But with regulators looking the other way, shareholders of these companies have been raped by insiders who are supposed to be loyal to the shareholders, but are only loyal to themselves.
Financial statements are useless in determining which companies are quality and which are not. Companies routinely inflate their financials, giving the impression of health when there is really rot and decay underneath.
Don't Speculate
Financial commentator Erich Simon writes, "It is fashionable these days to anticipate market bottoms based on contrarian indicators. The greater the number of bears, the closer to a bottom. But this is not an economic truism. Indeed, if you take the quantity of bad news and the pace at which it is assaulting the system, this indicator now is telegraphing a system in collapse. We have only to look to the droves of Madoffs coming into view, swindlers who operated under the umbrella of the SEC, the Enrons and the Tycos of yesterday. Nearly every publicly traded issue is now being exposed as a post-GAAP sham.
How big a sham? If you take the total number of shares outstanding in every publicly traded company (using the Wilshire) and divide it by gross money supply (never mind debt comparisons) one can gain insight into the worthlessness of equities -- and the insulting charade of liquidity injections at any level."
In light of the above, ANY investment is a speculation at this point.
Don't Panic Out Of Quality Investments During Inevitable Market Downturns
From Chris Laird's Prudent Squirrel Newsletter
"And, this leads me to another concern, which we have talked about before, the idea that when you invest in the financial markets, even the bond markets, you are really investing in a black box. What I call black box markets. In other words, most companies are not truthful about their health many times. Honestly, would you entrust thousands of dollars to someone and not know their financial status and only rely on some report they give each quarter????The financial industry in particular. And, there is nothing being done to improve this either, particularly with no less than the US Treasury saying they won’t say who is getting the TARP money.
So, the point is, you need to err on the side of caution, and certainly not trust the financial media that much, and even companies’ financial reports. This all goes for investment funds and money market funds as well. This goes for ETFs and everything too. There are shenanigans everywhere."
In light of the above, an advisor no longer has any basis for recommending that a customer hold or sell and investments. It is a crap shoot at best.
Diversify for Safety
The straw that broke the camel's back for me was when I recently allocated a larger portion of my clients' funds into gold shares as the economy and stock market deteriorated. In addition, the currency devalutation caused by the bailout package should have made gold, and gold mining shares skyrocket.
The idea of the increased allocation to metals was to offset the deterioration fundamentals of our paper positions.
Sure enough, the paper investments dropped as they were supposed to. But the metals funds (not gold itself) dropped even more!
According to Erich Simon, "The mining equities collapsed because they are subject to the same corruption as the broader indices. “Corruption” is one man's quest to secure a larger piece of real estate. The primary corruption in all the issues was stock dilution through share-printing and marketing through Wall Street under government sanction. Shares were exchanged for currency, and currency is a claim against man-hours of work so that governments can apportion scarce resources.
So the government, Wall Street and corporate insiders absorbed all of the prevailing man-hours of work and laid claim to all of the scarce resources, foremost among them, time -- yesterday's, today's and tomorrow's.
Meanwhile, mining shares have been looted along with the rest of the publicly traded issues. They have an underlying value, but a great deal of that value will not be available to U.S. investors because these global ventures have been targeted and are being absorbed by foreign ownership: “passive” investment by China, and more aggressive takeovers by others.
Governments like Japan, with their own imperialistic mandate, are securing ownership at the expense of greedy insiders who have been bankrupted by financial deleveraging. Against the growing tide of East versus West, a hungry and focused discipline versus wanton excess and division, a battle is raging that the West seems likely to lose.
The international race for ownership of metals mines, however, is testimony to the worth of these metals -- for industry and value (money). Gold is strong and gaining as a monetary unit accepted by both East and West. While ideological skirmishes roil the borders of an overcrowded planet, the larger investment reality is resource depletion.
What was left of the dot.com bust rocketed into real estate. A part of that remaining wealth is today moving into gold."
Outside of tangibles (gold), it no longer is possible for the average investor or advisor to know where value lies.
(to be continued)
Insider Buying
Spoke to my gold dealer in New York yesterday and he said the the next wave of gold demand is about to begin. His office is in the Wall Street district and is two doors down from HSBC Bank, a large gold depository that covers an entire city block.
Anyway, he said a very high up Sr. Exec from Goldman Sachs yesterday and bought 1500 ounces of gold for his personal account.
When the insiders start to turn to gold, you know something is up. Especially when those insiders are in a business that is in direct competition for gold. Looks like they are scared and running for cover.
By the way, HSBC Bank houses my clients' gold that is purchased through IRAs. When my dealer was over there yesterday in the depository that is three football fields long, he said he had never seen it so full.
The last two days Wall Street has been shorting gold and forcing the price down, but this can't go on forever. Whenever they finally give up the ghost, this thing ought to get real fun.
Anyway, he said a very high up Sr. Exec from Goldman Sachs yesterday and bought 1500 ounces of gold for his personal account.
When the insiders start to turn to gold, you know something is up. Especially when those insiders are in a business that is in direct competition for gold. Looks like they are scared and running for cover.
By the way, HSBC Bank houses my clients' gold that is purchased through IRAs. When my dealer was over there yesterday in the depository that is three football fields long, he said he had never seen it so full.
The last two days Wall Street has been shorting gold and forcing the price down, but this can't go on forever. Whenever they finally give up the ghost, this thing ought to get real fun.
New Arab Currency Likely To Increase Gold Price
http://seekingalpha.com/article/112731-will-the-new-gcc-single-currency-include-gold
THe Gulf Cooperation Council (GCC) assistant secretary-general Mohammad Al Mazroui told Gulf News: ‘We first have to decide on the location of the Central Bank, then the Central Bank and Monetary Council will have to decide on the gold reserves for the Central Bank’.
The creation of the GCC single currency - likely to be known as the Khaleeji which means Gulf in Arabic - is a major gold event for two reasons.
First, the breaking of their dollar pegs by the Gulf Arab nations is clearly dollar negative. Secondly, any inclusion of gold either as a part of the monetary basket, or in the reserves of the new GCC Central Bank will create additional demand for the precious metal.
2009 deadline
The project is gathering pace, and no lesser a figure than Saudi Arabia’s King Abdullah has directed that GCC economic integration committees speed up their work and complete the whole exercise by September 2009.
It is only a couple of months since a group of Saudi businessmen allegedly bought $3.5 billion worth of gold, believed to be the largest ever single transaction for the precious metal. Perhaps in 2009 it will be gold rather than local currencies which become of interest to speculators about monetary reform in the GCC...."
THe Gulf Cooperation Council (GCC) assistant secretary-general Mohammad Al Mazroui told Gulf News: ‘We first have to decide on the location of the Central Bank, then the Central Bank and Monetary Council will have to decide on the gold reserves for the Central Bank’.
The creation of the GCC single currency - likely to be known as the Khaleeji which means Gulf in Arabic - is a major gold event for two reasons.
First, the breaking of their dollar pegs by the Gulf Arab nations is clearly dollar negative. Secondly, any inclusion of gold either as a part of the monetary basket, or in the reserves of the new GCC Central Bank will create additional demand for the precious metal.
2009 deadline
The project is gathering pace, and no lesser a figure than Saudi Arabia’s King Abdullah has directed that GCC economic integration committees speed up their work and complete the whole exercise by September 2009.
It is only a couple of months since a group of Saudi businessmen allegedly bought $3.5 billion worth of gold, believed to be the largest ever single transaction for the precious metal. Perhaps in 2009 it will be gold rather than local currencies which become of interest to speculators about monetary reform in the GCC...."
Another Experts 2009 Predictions
excerpts from Timothy Morge's 2009 Outlook
http://www.medianline.com/home.html
(Recap of why gold and other commodities fell in 2008)
"More and more, the world's other large economies are diversifying themselves out of their dependence on the dollar, both as a safe haven currency, and as the currency of choice when it comes to transactions. This was evident in July of this year, when the dollar reached its peak against the euro currency. Most long-only hedge funds and other investment vehicles and portfolios were holding large amounts of non-US currencies (euro currency and Canadian dollars, for example), rather than holding any significant dollar-based assets. They were either net outright long these currencies or had at least hedged their US dollar exposure completely.
When the credit crisis started to unfold in July, the hedge funds and investment portfolios that relied on lines of credit to fund their positions got calls from their lending institutions-calls that cancelled their trading lines of credit. These calls signaled the beginning of a huge liquidation of long-held positions in everything from currencies to gold and oil, and even corn, soybeans, and wheat. The mass liquidations meant two things: 1) Hard assets like oil, gold, and agricultural products plummeted in price, and 2) The US dollar came off its lows across the board, as short US dollar positions were closed, and some of the proceeds from these asset sales were turned back into US dollar assets (mainly medium- and long-term US Treasury bonds)."
(Fast forward to his predictions fro 2009)
"But as prices for commodities continue to strengthen, and as the US dollar continues to sell off, I believe people will begin to see the resurgent strength in commodity prices as a growing threat to the economy-as they should-and a sign that inflation is beginning to spiral out of control. The US Federal Reserve has been pumping money into the US economy at an annualized 78% year-over-year rate of growth. And that will eventually translate directly into a great deal of inflation. In fact, if it doesn't translate into double-digit inflation (as measured by the US government), it's a sign that the US economy is in a deep depression, not a recession.
To summarize:
I see the current sell off of the US dollar as the catalyst that will cause traders, investors, and consumers to buy commodities. I expect that most hard assets will experience "V" type bottoms and head higher as the dollar continues its fall. I believe we will see crude back at $90-$100 a barrel in 2009, and gold well over $1000 an ounce. This resurgence of commodity prices will bring double-digit inflation to the US, though it might take the US government's official numbers some time to reflect this move higher in inflation. Last, I see the US stock market making some upward progress heading into 2009, but I feel that any significant rally (a rally approaching 9600-9700) will end in an abrupt and deep sell off, most likely ending in a test of the 5700-5900 area of support."
http://www.medianline.com/home.html
(Recap of why gold and other commodities fell in 2008)
"More and more, the world's other large economies are diversifying themselves out of their dependence on the dollar, both as a safe haven currency, and as the currency of choice when it comes to transactions. This was evident in July of this year, when the dollar reached its peak against the euro currency. Most long-only hedge funds and other investment vehicles and portfolios were holding large amounts of non-US currencies (euro currency and Canadian dollars, for example), rather than holding any significant dollar-based assets. They were either net outright long these currencies or had at least hedged their US dollar exposure completely.
When the credit crisis started to unfold in July, the hedge funds and investment portfolios that relied on lines of credit to fund their positions got calls from their lending institutions-calls that cancelled their trading lines of credit. These calls signaled the beginning of a huge liquidation of long-held positions in everything from currencies to gold and oil, and even corn, soybeans, and wheat. The mass liquidations meant two things: 1) Hard assets like oil, gold, and agricultural products plummeted in price, and 2) The US dollar came off its lows across the board, as short US dollar positions were closed, and some of the proceeds from these asset sales were turned back into US dollar assets (mainly medium- and long-term US Treasury bonds)."
(Fast forward to his predictions fro 2009)
"But as prices for commodities continue to strengthen, and as the US dollar continues to sell off, I believe people will begin to see the resurgent strength in commodity prices as a growing threat to the economy-as they should-and a sign that inflation is beginning to spiral out of control. The US Federal Reserve has been pumping money into the US economy at an annualized 78% year-over-year rate of growth. And that will eventually translate directly into a great deal of inflation. In fact, if it doesn't translate into double-digit inflation (as measured by the US government), it's a sign that the US economy is in a deep depression, not a recession.
To summarize:
I see the current sell off of the US dollar as the catalyst that will cause traders, investors, and consumers to buy commodities. I expect that most hard assets will experience "V" type bottoms and head higher as the dollar continues its fall. I believe we will see crude back at $90-$100 a barrel in 2009, and gold well over $1000 an ounce. This resurgence of commodity prices will bring double-digit inflation to the US, though it might take the US government's official numbers some time to reflect this move higher in inflation. Last, I see the US stock market making some upward progress heading into 2009, but I feel that any significant rally (a rally approaching 9600-9700) will end in an abrupt and deep sell off, most likely ending in a test of the 5700-5900 area of support."
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