Wednesday, May 29, 2013

Blow off top and perhap the Great Unravel

I could see a relentless final, even higher sloped push upward to really crush bears and get people to jump on the "got to have some stocks, you are insane not to have stocks" kick.

And maybe that comes to an end this year.   With a huge unravel, portrayed at first in Orwellian manner as a "healthy correction".   

Per item 2 of MISH's list below......I disagree with any ETF as a store of wealth.    Some ETFs can be good short term trading vehicles, but ETF "value" is created by option or swaps, and in a choatic environment, perhaps intentionally created, there value can swing wildly.   Review the flash crash.   Some ETFs went from 80 to 2 in minutes, with no market to buy to coverage your stop loss....until buyers come in at "2".     ETF's are therefore a joke.

Money in the bank can be FDIC insured, but we know the bankers, brokers, and those in charge of supervising them are criminals in cahoots.    When the chips are down, there is no reason the FDIC won't come out an say....hey we only can provide protection your sum aggregate of all accounts to $200,000, and we have put that $200,000 into safe keeping as the "Patriot Reserve Fund" to prevent runs on the banks.     Everything above $200,000 is gone, sorry.     That method protects the masses, to prevent revolt, and still keeps those with "something to lose" on the hook to avoid them making too much noise, or you will also lose the last $200,000 too.  

Finally, many legal bodies are now treating money you have "deposited" into a bank, instead treating it as a loan to the bank.    If the banks goes under, they declare bankruptcy, and they don't have to pay back their "loans".    That means you get screwed, legally.    You thought you had "deposits".

From MISH site.

Five FDIC Alternatives

  1. Treasury Direct:  You can safely buy short-term US treasuries directly.
  2. Short-Term Treasury Funds: The iShares Short Treasury Bond ETF (SHV) holds Short-term U.S. Treasury bonds with remaining maturities between 0 and 1 year.
  3. Brokerage account at places that hold excess cash in treasuries. Not all brokerages hold client cash safely. Interactive Brokers is one of the better ones in my opinion. ETrade nearly went under because of risks it took. See E*Trade Heads For Bankruptcy?
  4. Physical gold or silver in your possession
  5. GoldMoney, Bullion Vault, and other places that store precious metals for you.


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