Originally posted by chook
View Post
From what I understand a small contraction in our money supply will have a massive flow on effect to asset prices. This is somewhat akin to chaos theory (i.e. a butterfly flaps its wings and causes a hurricane in the distance). Once asset prices begin to turn and fall then you see a race to the narrow exits (panic) which further drives prices down.
My biggest fear is the timing of this next downturn is far more inconvenient than the previous ones, i.e. you have a large swathe of the population (baby boomers) heading into retirement with almost all of their capital tied into real-estate and financial assets.
I couldn't warn people enough how severe this turn in the cycle will be. This will be my last warning and I need to spend more time learning how to mitigate the downside.
Comment