The boom has turned to bust

[Austrokiwi]

Before yesterdays drop in the US stock markets. A commentator on CNBC made a comment that was interesting its was word to the effect: Baby boomer's are getting to the point in their investment life cycle that theythey should be switching from stocks to treasuries and cash deposits!!!!!!

This would have a long term effect on equity, financial and property markets as where in the world is a baby boomer following the recommended investment programme put the cash from their equities............. Obviously gold comes to mind but the potential for new bubbles and busts is concerning.

[Austrokiwi]

Actually for some on e approaching retirement Gold is not a good idea.......no cash flow!!!

[Commercial Dan]

Actually for some on e approaching retirement Gold is not a good idea.......no cash flow!!!

No cashflow but it is the ultimate inflation hedge. The Govt in the US is lying to its people about inflation figures, they are way higher and they are losing purchasing power daily. Gold has held its value for centuries.

[Skeptic]

No cashflow but it is the ultimate inflation hedge. The Govt in the US is lying to its people about inflation figures, they are way higher and they are losing purchasing power daily. Gold has held its value for centuries.

If you have the time. What was it 25 years from it's peak in 1980 before it was worth the same amount again in real terms? And no revenue stream in the meantime....

[Austrokiwi]

No cashflow but it is the ultimate inflation hedge. The Govt in the US is lying to its people about inflation figures, they are way higher and they are losing purchasing power daily. Gold has held its value for centuries.

I agree but for some one moving into retirement their investments need to provide them money for day to day life Hence my comment! I have gold and silver. One day I am going to need money to live on at that point as scary as it will be I will have to convert my real money into every day play money!

[Stickman]

As an interesting commentary on how our economy is going, next time you are at your local mall, have a look at all of the 50% and 60% sales the retalers are advertising. Shows you just how tight things are for retailers.

[Badger]

I did read the the thread!!!!!! The link took me to your post responding to my elaboration on an earlier post of yours.

I am not so confident on Gold, On another Forum some one pointed out to me that 18 months ago I thought now would become a turning point (down)for gold( I had forgotten I had even thought that). I really have no feeling for what is going on now and would note that some gold players are currently shorting gold. The fact I can get no sense of direction on gold at the moment is uncomfortable.( for me)

Im mega bull gold but still "SHORT GOLD" its how you play the players in the market most of the gold movements are down to the attached paper indexes trading - influencing or manipulation depending on ya point of view!

But always during a "CORRECTION" ask ya self whats really changed ?

Answer "NOTHING" so sit tight...

Gold has one way to go with current central bankster policy UP UP UP!

Even if deflation does triumph the inflationary stealth actions of the banksters its still a safe investment.

Most investors I follow recommend 10% of a portfolio in gold and or silver some go higher 20%.

As always its up to the individual to decide there tolerance for risk!

[Gatekeeper]

I have a feeling, and it seems to have taken a turn as I said "June"
Gold & oil shooting up again last night, and the credit card mess starting to poke it's head through into view, to add to sub-prime.
Still think it's a good time to buy gold (and energy stocks), but closing soon. Wish I had some spare cash! I also have a feeling it might be a good idea to have some under the mattress at least.

My energy stocks went up 38% today - window closed for now.

[Austrokiwi]

More on the BIS AGM

BIS 78th Annual Report
VIII. Conclusion: the difficult task of damage control

30 June 2008


In the aftermath of a long credit-driven boom, it would not be surprising to see turmoil in financial markets, slowing real growth and temporarily rising inflation. The crucial questions at the present juncture have to do with the severity of these individual trends as they now appear and how they might interact. While difficult to predict, their interaction does appear to point to a deeper and more protracted global downturn than the consensus view seems to expect. At the same time, inflationary forces, particularly in emerging market economies, could also prove unexpectedly strong and persistent. A major factor in inflation prospects everywhere is likely to be the behaviour of wages, but in some countries the effect of a depreciating exchange rate on domestic prices could also play an unwelcome role.
With inflation a clear and present threat, and with real policy rates in most countries very low by historical standards, a global bias towards monetary tightening would seem appropriate. That said, the circumstances of different countries, both actual and prospective, currently rule out a "one size fits all" response. Moreover, should the global economy slow sharply and inflationary pressures recede, the bias to tightening would evidently also be reduced.
In the current and prospective environment, it should nonetheless be borne in mind that the effectiveness of a lowering of policy rates might be significantly reduced in the aftermath of a credit-induced spending boom. In view of the potential negative side effects of such a policy, not least the risk of encouraging further financial imbalances and misallocations of real resources, complementary policies might be envisaged to avoid overburdening monetary easing. Expansionary fiscal policy could have some merit, but in many countries current debt levels mean there is little room for manoeuvre. Steps to recognise and deal with losses and debt overhang problems, in a timely and orderly way, and subject to conditionality, must then be a high priority.
Perhaps the principal conclusion to be drawn from today's policy challenges is that it would have been better to avoid the build-up of credit excesses in the first place. In future, this could be done through the establishment of a new macrofinancial stability framework, which would call for both monetary and macroprudential policies to "lean against the wind" of the credit cycle. Recognising that cycles can be attenuated but not eliminated, a number of preparatory steps are also suggested that would allow periods of financial turmoil or crisis to be more effectively managed.




Re bit in bold: If I am reading this right they are saying some governments should spend, But teh problem is they may alraeady be in too much debt!!