Thursday, April 24, 2014

24 Apr 2014

 Long term is as high as it's ever been.  Amazing.
 Medium term is rallying (lagging the short term indicator)
Short term fell slightly today.  Remains in overbought territory.

Ever since the Russia / Ukraine crisis began, I became worried.  It just didn't seem like it was going to be resolved quickly.  It disappeared from the news as the news highlighted the missing airliner for weeks. Meanwhile, it continued to bubble under the surface.  It seems like it is about to explode and be apparent to everyone.

The US' hegemony on the use of force in the world is on the decline.  China and Russia want their place in the spotlight.  The US is currently being tested on "red line" after "red line," and it is becoming apparent that we no longer are the biggest dog in the fight or simply, have too much to lose.  The economic woes continue to plague the country in spite of what the news tells you (and the stock market reflects).  War has always been convenient in times like this.

Student credit has gone asymptotic the past five years.  The monetary base has been exploding.  All this fuel and still not much of a fire in the engine of the US economy.

The US finds itself in a difficult situation.  We declare war, Russia and China can dump treasuries or abandon the dollar for settling petro sales.  We declare war, extreme inflation to cover costs.  Dollar loses value anyways.  All negatives for a precarious economy.  Traditionally government bonds would be a safe haven from these events, but I'm not sure that would still be the case.

We don't declare war, it becomes obvious that we are just a small dog with a loud bark that only picks on extremely poor nations.  A truly confident nation wouldn't need to be paranoid about national security.

It seems the only assets (art, collectibles, precious metals, defendable/ariable land) that don't have counterparty risks are the safest - they will not "blow up" as other paper instruments could, but they could continue to decline in value for the mean time.

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