The Worst Is Ahead (Roubini)

The Worst Is Ahead (Roubini)
forbes.com

http://www.bloomberg.com/apps/news?pid=20601087&sid=aatl...

Henry Paulson said in September they would comply with congressional demands for transparency in a $700 billion bailout of the banking system. Two months later, as the Fed lends far more than that in separate rescue programs that didn't require approval by Congress, Americans have no idea where their money is going or what securities the banks are pledging in return.

Well, I doubt Ben would buy quality securities since quality securities are usually sold on the open market.

ultimately we will get hyperinflation as the govt prints literally trillions to monetize the various debts of the govt. the strong dollar now is just a head fake as the yen carry trade and other various forex arbitrages unwind.

all real estate will lose 50%. everything. that is what happened in japan in the 90s...even desirable tokyo condos lost 50%. 50% will be the minimum downside for real estate.

actually its worth noting that when japan went down the toilet in the 90s, they were the world's biggest saver and lender. we are the world's biggest borrower. so don't expect anything as gentle as japan's ten-year recession.

expect an end to all of this around 2020, and this will only end when people see taking on debt, any debt, as about as attractive as sharing needles with a junkie. when this is over its impossible to say what the economy will look like, but you can be sure people will be dealing in tangibles...cash or barter.

the best thing you can do now is -preserve capital-. you are going to need it to survive. forget the charlatans telling you to "double down" because they have some anecdotes of companies exploding out of temporary down times....none of your luminaries have lived through anything like this, and indeed many of the superstars of the roaring twenties were literally gutted by the market turmoil of the 30s...they just refused to believe the downside would last very long, they thought it was all just a buying opportunity...little did they know how far things would fall.