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**ThePythonicCow** · August 04, 2009, 04:30 AM

Re: The New Banana Republic

I like this report. It aligns with my current investments.I recently went short the dollar, using several ETF's: FXC, FXY, FXF, FXE, UDN, CYB, MERKX. These positions are along with my gold positions and a short on long treasuries (TBT). I'm still about half invested in cash and short term treasury equivalents.

**thunderdownunder** · August 04, 2009, 05:42 AM

Re: The New Banana Republic

My advise is be careful of shorting long term treasuries. They might rise in an exponential curve if a crunch eventuates. Fear will drive money into the shortest and safest option, short dated bonds."Park it up" You have to understand that ALL investors seek, first, the return of capital and second the return on capital. Shorting long term T's, in my view is a risk if the government is Hamstrung. They have painted themselves into a corner and can't use Interest rates to fight off inflation. long T's offer just that bit more against the degradation of inflation while remaining (apparently) safe
Other advise was this is a bit of a boom for US companies that export -
Catapillar, Big Phama et all. We live in Australia so our exports that are denominate in USD settlement will suffer while imports will become cheaper (Excluding China & Japan as the first is unhappily tied to the USD and the second is defying gravity) Japan is an enigma. They are in worst shape than any industialised country. They can't fight inflation yet they are broadside exposed to commodities yet Yen just keeps getting stronger further weakening returns on exports while having increasing inputs. Deflation is dead even there. Short the yen;)
If the US stockmarket fell 18% over three months there would be sell orders galore but when your currency which is your stock in trade falls that much not a murmur. However Gravity has the last say and when the tide of inflation is on everyones lip it turns and tends to accelerate. Keep safe and liquid cause the first V of a W has formed.
Correction: The U has formed and the 'I' attached to the RH side is waiting for gravity to do its thing.

Please read pages 2-5 for a similar view that was expressed today, in no uncertain terms today, by a small company who has near perfect record over 100 years as estate planners. They think alike with only a few Asian influences that need watching.
http://www.contrahour.com/ItsJustTim...nArmstrong.pdf. Just 2-5 OK- The rest of the article needs tinfoil hats and it will drive you nuts
They believe the tide has turned or near about, within a month or three.
They advise Hard hats and Kevlar safety vests until the volatility and debt over hang are worked through and dispensed with properly as they should have been first time round. Closing argument was a stunner
"Nature tells us that a new crop is only viable with new seed, the remains of old crop must be plowed in as fertilizer to provide a clean field"
That explains the current green shoots in a new perspective you would have to agree. (Hint for the non Ag lads - they are weeds)

**ThePythonicCow** · August 04, 2009, 06:09 AM

Re: The New Banana Republic

Originally posted by thunderdownunder View Post

Short the yen;)

Could be. Of all my long currency positions, the yen has been the one going against me the most. I'm about to stop myself out of it.

Certainly your warnings about shorting long treasuries make sense. Last year, long treasuries were quite bullish when stocks tanked. The main reason that I'm in TBT is I am testing out some recommendations of Bert Dohmen, whose newsletter someone else posted here recently. At this point, my TBT position is small; just enough so that I will notice the pain or the gain and begin to form a stronger opinion of how Bert's advice plays out.

**Chomsky** · August 04, 2009, 08:48 AM

Re: The New Banana Republic

Isn't 90 days a quarter? 120 x 4 = 480, v. 365 days in a year.

**thunderdownunder** · August 04, 2009, 04:38 PM

Re: The New Banana Republic

Pardon for confusion. The figures given were for 4 months past and they were looking forward 2 quarters ie; dissecting that information for the effects in the near future
The future assumptions are for Inflation to increase substantially for most with the US suffering badly as the past $ fall, passes through the pipeline. They assume that the US companies have little room to absorb additional costs as the "fat" has been trimmed. They either pass it on quickly or tank the bottom line. Major Governments cannot fight the Inflation Genie as interest rates are effectively already Negative and to raise them as crushing blunt instrument will do serious damage

**GoldMiner** · June 14, 2014, 12:08 PM

Re: The New Banana Republic

The US will become a large Detroit and so will most of Europe.

The social signs are terrible: just watch the youth unemployment figures and the low economic productivity.

Oddly, the West is in decline... Sad to say.

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The New Banana Republic

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