Barring a complete socio-economic meltdown
Define "complete"
I am planning not for the end of society, but rather for the collapse of the USD, ~20% unemployment, massive inflation, state budgets going to nearly zilch, religious charities setting up soup kitchens, a(nother) major war to take peoples' minds off their troubles (no idea against who), possibly some states splitting off from the USA after a few years of such.
The next impending wave of this correction is merger and acquisition.
No. This one is different. M+A's require big capital investments that nobody but the very very biggest behemoths want to make.
So a few blue chips and mammoths sitting on mountains of cash (like, say, MSFT and ORCL, ahem) will do a lot of eating. But not enough to impact the wider economy.
if the Alpha bank can afford that debt within their acceptable ratio without tipping into the red.
Which are these banks you are referring to, with plenty of cash and looking for good risk to invest in? I'm not seeing it.
Coinciding with this is an expected period of stagflation or deflation, depending on the actual numbers to define which one.
Bernanke will never allow deflation, at any cost.
Stagflation -- sure. You bet. But not tame like the late-70s-early-80s.StagReallyBigFlation, maybe StagHyperFlation.
The dollar has bottomed
I am literally betting my life savings it has a lot farther to fall.
, and metal commodities are beginning to fall - China is experiencing a glut of warehoused production and is slowing in its stockpiling efforts, which increases the supply side and lowers commodities cost. As the dollar gains strength and stabilizes, gold is falling, requiring less dollars to buy an equivalent ounce. This causes selling pressure on gold, furthering its decline. This wave could take a really long time, I've seen some estimates that go out as far as 2017. That would include our impending correction, in the next few months, a long slow uphill period of bull market for about 6+ years, ending in your fatal Black Swan.
Assuming, of course, we ever get into the Bullish phase, ever.
Last sentence is the key.
Any fall in gold (or, more usefully, silver) is a very temporary buying opportunity.
The uphill is more like 6-18 months, not 6 years.
Its all about the banks, Denis. And energy.
M$ and ORCL, they'll do whatever they do.
The banks were already arguably solvent in many cases, many could have earned their way out of the mess or been absorbed. Instead, they were artificially primed with a trillion in liquidity. Thats where the M+A activity will come from, banks. Goldman, Wells, BofA, JPM, and a bunch of stimulated regional leaders are all poised to absorb a fuck-ton of minor-leaguers, who also took a bunch of bail-out juice. This will create a whole new financial landscape in the next decade. These guys are gonna be rock-fuckin'-solid for a long time to come.
This 6(lol) to 18 month thing is a pipe dream, it is nothing but grim determination on your part to believe what you already believe.
This is, in my estimation, a bear market correction. Not a bull market. Bear markets don't mean death, they are a phase of the economic environment. This whole thing was a reaction to the emerging markets surge in conjunction with the mortgage/debt bubble. Simultaneous, severe blows which occurred when we were peaking on a long, sustained bull rally. Bear markets usually begin before the top, this started two years ago. Now, we're fully bearish, and this is a correction up. It will resume and bottom again. (but not as deep)
Thats where your bull phase will begin. When all the water in the pool finally stops sloshing around. Maybe a year from now, something like that. And they take a while to run. Thats where the energy comes in. As we slowly untangle ourselves from foreign oil dependence, domestic green shit will grind to life. Every year, more green cars are sold. More solar comes on line. More wind comes on line. Less oil money leaves our shores. Percent by percent, we grow. This impacts tech, industry, and a lot of home-grown builders who were beat down in the housing fuckup. Domestic, domestic, domestic. Banks at the ready to loan against profit and recovery.
Why do you think gold stalled? I just told ya, bears begin a while before bullishness is fully complete. Gold is a contrarian indicator of the economy, you know that. And its well known that gold works in concert with oil. We may see the death throwes of oil in the next few years, and gold will follow. As oil demand wanes, price will spike to keep the profit rolling as a constant. Them arabs want their trillion bucks next year, too. So that'll probably make gold flirt with highs again. But I wouldn't start growing horns on gold, that'd be a mistake.
I think I've made it abundantly clear, I wish you nothing but the best of success, I would gladly shake your hand and toast your profit. In fact, I look forward to it. But I think it'll take a while longer than the next two-three years to play out.
The Free Talk Live BBS
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