Janszen Scenario Update Two – Part III: Practice Run - Eric Janszen

[think365]

Re: Janszen Scenario Update Two – Part III: Practice Run - Eric Janszen

Bernanke's comments and the Q&A afterwords added little or nothing to the FED's written announcement, except for the regular caveat that they may need take more action in the future (but obviously, not now). The overall market reaction, so far, is moderately negative.

Also, of note, Bernanke did not come on strong on the "fiscal cliff" issue (like saying it could result in a 4% negative hit to GDP, etc). While he mentioned that it would be nice if Congress would "help" out through responsible fiscal policy (eg., extend tax credits, streamline and economize government programs, etc), he mitigated the pressure on them by stating that there were still things the Fed could do to help the economy with "unconventional" monetary policy. However, he did state that such "unconventional" policies are untested and could carry with them some "risks".

Overall: status quo for now.

[raja]

Re: Janszen Scenario Update Two – Part III: Practice Run - Eric Janszen

We’ll hold gold until the international monetary system finishes its slow motion collapse, unless war breaks out and it collapses in a hurry.

When "the international monetary system finishes its slow motion collapse", how would one get rid of the gold? Sell it for fiat? After a monetary collapse, fiat won't be worth anything.

I see three possible strategies:

1) Sell gold right before the collapse, and immediately buy things of value -- houses, tractors, land, anything "real" that won't lose value during the crash. This would be hard to time, but after the crash the government might pass nasty laws dealing with gold ownership, so this could be the safest move.

2) Hold the gold until after the monetary system crashes, then trade it for "real" stuff.

3) When the world economy recovers, sell the gold for the new fiat, which will hopefully be stabilized and worth something, then invest the fiat.

Gold will being accorded a lot more respect after the fall of fiat, so it should be easy to sell or trade.
But government interference could be a problem. Gold owners are in the minority, so lack the political ability to protect themselves.

[thriftyandboringinohio]

Re: Janszen Scenario Update Two – Part III: Practice Run - Eric Janszen

When "the international monetary system finishes its slow motion collapse", how would one get rid of the gold? Sell it for fiat? After a monetary collapse, fiat won't be worth anything.

I see three possible strategies:

1) Sell gold right before the collapse, and immediately buy things of value -- houses, tractors, land, anything "real" that won't lose value during the crash. This would be hard to time, but after the crash the government might pass nasty laws dealing with gold ownership, so this could be the safest move.

2) Hold the gold until after the monetary system crashes, then trade it for "real" stuff.

3) When the world economy recovers, sell the gold for the new fiat, which will hopefully be stabilized and worth something, then invest the fiat.

Gold will being accorded a lot more respect after the fall of fiat, so it should be easy to sell or trade.
But government interference could be a problem. Gold owners are in the minority, so lack the political ability to protect themselves.

All 3 options would work for me.
My initial plan was centered on option one, to try to capture the overshoot in gold during the panic.

[dummass]

Re: Janszen Scenario Update Two – Part III: Practice Run - Eric Janszen

Perhaps collapse isn't the correct term. More like decay (rusty metal or termite infested wood).

[BadJuju]

Re: Janszen Scenario Update Two – Part III: Practice Run - Eric Janszen

Perhaps collapse isn't the correct term. More like decay (rusty metal or termite infested wood).

Although the implications of the chart suck, it is also a good thing in light of peak cheap oil. People need to move away from fossil fuel intensive transportation. If people just tried to be more energy efficient and conserve, it would produce a major economic boost.

[metalman]

Re: Janszen Scenario Update Two – Part III: Practice Run - Eric Janszen

Although the implications of the chart suck, it is also a good thing in light of peak cheap oil. People need to move away from fossil fuel intensive transportation. If people just tried to be more energy efficient and conserve, it would produce a major economic boost.

peak cheap oil = rising prices

when gas prices go up folks ride trains/busses more... if they have the option.

http://usnews.msnbc.msn.com/_news/20...p-reports?lite

fast price rise = economic shock...



solution...

raise gas taxes 50 cents/year & diesel 25 cents.

use the tax $$$ to build public transport.

in 4 yrs gas = $6 & diesel = $5... cars fleet smaller... more efficient diesel cars on the road... folks drive fewer miles... usa energy efficiency shoots up.

prep the usa auto industry on the plan... gm & ford kick ass

win, win, win

[BadJuju]

Re: Janszen Scenario Update Two – Part III: Practice Run - Eric Janszen

win, win, win

Yup!

[jk]

Re: Janszen Scenario Update Two – Part III: Practice Run - Eric Janszen

solution...

raise gas taxes 50 cents/year & diesel 25 cents.

use the tax $$$ to build public transport.

in 4 yrs gas = $6 & diesel = $5... cars fleet smaller... more efficient diesel cars on the road... folks drive fewer miles... usa energy efficiency shoots up.

prep the usa auto industry on the plan... gm & ford kick ass

win, win, win

yeah, everything but the election that would allow you to put those policies in place.

[c1ue]

Re: Janszen Scenario Update Two – Part III: Practice Run - Eric Janszen

yeah, everything but the election that would allow you to put those policies in place.

And more importantly, the next election where the President who does this gets booted out.

The well of good will was thoroughly used and abused by Obama...

[jk]

Re: Janszen Scenario Update Two – Part III: Practice Run - Eric Janszen

the only justification for such policies that has a chance of flying politically, is national security. the right geopolitical situation and "the president addresses the nation" in prime time....

[raja]

Re: Janszen Scenario Update Two – Part III: Practice Run - Eric Janszen

Originally Posted by EJ
We’ll hold gold until the international monetary system finishes its slow motion collapse, unless war breaks out and it collapses in a hurry.

Below is a chart EJ put out in 2010.

If the "US Bond Treasury market blow up" mentioned in the chart is the same thing as the "international monetary system collapse", it looks like gold will not collapse, although it does dip down once inflation starts to subside.

When EJ says "we're going to hold gold until the international monetary system finishes it's collapse", is he suggesting to sell at that $6000 peak in the chart below? It seems to me that the best thing would be continue to hold gold until the dust settles, rather than try to time the top. Or to attempt to sell gold when Treasuries hit 25%, as the chart depicts -- then use the $$ to buy Treasuries and lock in 25% for the next 30 years.

[bart]

Re: Janszen Scenario Update Two – Part III: Practice Run - Eric Janszen

the only justification for such policies that has a chance of flying politically, is national security. the right geopolitical situation and "the president addresses the nation" in prime time....

*sarc*, thought for the day:

http://www.nowandfutures.com/grins/b..._means_war.wav

[jk]

Re: Janszen Scenario Update Two – Part III: Practice Run - Eric Janszen

Below is a chart EJ put out in 2010.

If the "US Bond Treasury market blow up" mentioned in the chart is the same thing as the "international monetary system collapse", it looks like gold will not collapse, although it does dip down once inflation starts to subside.

When EJ says "we're going to hold gold until the international monetary system finishes it's collapse", is he suggesting to sell at that $6000 peak in the chart below? It seems to me that the best thing would be continue to hold gold until the dust settles, rather than try to time the top. Or to attempt to sell gold when Treasuries hit 25%, as the chart depicts -- then use the $$ to buy Treasuries and lock in 25% for the next 30 years.

i think we have a few days between now and then to watch how things unfold, and don't actually have to decide on a plan at this moment.

[jk]

Re: Janszen Scenario Update Two – Part III: Practice Run - Eric Janszen

*sarc*, thought for the day:

http://www.nowandfutures.com/grins/b..._means_war.wav

and here i thought that was going to be the marx brothers from duck soup.

[raja]

Re: Janszen Scenario Update Two – Part III: Practice Run - Eric Janszen

i think we have a few days between now and then to watch how things unfold, and don't actually have to decide on a plan at this moment.

That's one scenario . . . .

But what about a collapse of the global financial system, like in 2008, this time brought about by a financial tsunami started in Europe . . . and the Fed isn't able to orchestrate a save. Banks freeze up; economic life comes to a standstill.
If that scenario played out, it could do so in a week.

Of course, in that instance it would be best to hold onto gold . . . .