Wednesday, August 26, 2009

This was a comment on Xtrends--


If oil test $35 in the next 2-5 years, that will confirm everything of course regarding the asset class balance. Oil refineries will halt production, everything will regress. It's hard to imagine this though..

We will be severly destroyed, and the debt will destroyed too !

At that point, we will actually go back 30-50 years in pricing index when homes were still $100k lol and gas was near $1-$2 tops !

That would be a 'real' correction, but a very devastating one that the WORLD GOV'Ts do not want happening.

Steveo response:

Government personnel want to perpetuate their own jobs, and add more people under them to increase their power base. They will pay any price and take any risk in order to perpetuate the status quo. They will not want to take their medicine, if there is even one chance in a 1000 that something else might work. It's like skiing through a mildly forested start to lose your balance and rather than taking a small fall, you try to correct, putting you into a more precarious and off balance position, and instead of taking a medium fall, you try to correct again and are now swinging wildly out of control. Now you are faced with a cornice on one side and the chance of slamming into a tree at 45 MPH. Does that bring it home? But you still think (hope) that with another more risky manuever that you might get out of it OK, or even get out of it smelling like a rose, with people cheering you as a hero.

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Insightful and Useful Comment!