John Mauldin and Central Banks

[DRumsfeld2000]

http://www.businessinsider.com/mauld...ackdown-2014-7

He makes some interesting comments on liquidity and the search for yield resulting in greater risks. He advises readers to look at investments that did well during the last crises. I get that and am prepared.

[Southernguy]

Re: John Mauldin and Central Banks

"investments that did well during the last crises. I get that and am prepared."

CASH

[coolhand]

Re: John Mauldin and Central Banks

"investments that did well during the last crises. I get that and am prepared."

CASH

The Maginot Line was expected to keep the French protected from the next time the Germans invaded as well. What if the performance of the markets is a sign that the next crisis has already started and is telling us cash will not perform as well next crisis?

The Fed's balance sheet is 26% of GDP, up from 5% prior to the crisis...in the next crisis, do we think the Fed will stand idly by and allow all their hard work to be undone? If they do, then the dollar will collapse b/c debt backs the dollar and as debt defaults, the dollar's value will plummet against real goods.

More likely is that the Fed will take their balance sheet towards 50% of GDP...I believe Zimbabwe's hit 60% in 2006 or so...not saying that US will become Zimbabwe....but I am saying that cash is likely to fare very poorly against essentials.

Why would China and the rest of the world that are the US' creditors & now represent the majority of world trade allow their countries to enter depression simply for the privilege of continuing to use dollars? Much easier to simply cut out the dollar, let the Americans deal with their own problems, and continue on. They have already built the infrastructure to do that.