Average SD family 2000 vs 2010

[Eugene]

[quote]But why do you think there has been so much investment in emerging markets and in global assets, commodities, etc.? Who do you think is behind all of that money? The financial institutions are behind a lot of that buying (hedging against inflation)[/quote]

The red graph seems to be back on trend of pre-crisis growth. It’s just normal dynamics of emerging economies. China is growing like crazy, for example, even though it’s very hard to invest there for foreigners. You can’t even buy and sell RMB in the forex market, you need to go through one of the state-owned banks and you need a special dispensation from the communist government.

[quote]BTW, do you really think stocks were undervalued in 2009 based on fundamentals (especially forward-looking)?[/quote]

Absolutely. Companies like AA or CAT were trading at single digit P/E’s.

[quote] Do you think the price increases around the world happened **in spite** of all that stimulus?[/quote]

I think that price increases are part of the trend. All those various forms of stimulus helped shorten the crisis somewhat, but they have not been big enough to make any inappropriate influences on prices. Most of them weren’t even real (like the aforementioned tripling of the monetary base), they were just moving digits around with no impact on the physical world around us.

[CA renter]

Do you think that if the central banks and governments around the world (indluding China) were to have allowed everything to fall to wherever it was going to go, without any intervention, that those single-digit P/Es (and prices of assets, in general) were out of line?

I guess what I’m trying to get at is that the “growth” of the preceeding ~10 years was due to excessive and **totally unsustainable** leverage; and by deleveraging to fundamentally sustainable levels, this “growth” would have to be reversed.

IMHO, the “financial crisis” was happening as asset prices (and “growth”) were accelerating to unsustainable heights as a result of all of that leverage and debt (that could NEVER be covered). Those prices and growth rates were never “normal” to begin with.

[CA renter]

Do you think that if the central banks and governments around the world (indluding China) were to have allowed everything to fall to wherever it was going to go, without any intervention, that those single-digit P/Es (and prices of assets, in general) were out of line?

I guess what I’m trying to get at is that the “growth” of the preceeding ~10 years was due to excessive and **totally unsustainable** leverage; and by deleveraging to fundamentally sustainable levels, this “growth” would have to be reversed.

IMHO, the “financial crisis” was happening as asset prices (and “growth”) were accelerating to unsustainable heights as a result of all of that leverage and debt (that could NEVER be covered). Those prices and growth rates were never “normal” to begin with.

[CA renter]

Do you think that if the central banks and governments around the world (indluding China) were to have allowed everything to fall to wherever it was going to go, without any intervention, that those single-digit P/Es (and prices of assets, in general) were out of line?

I guess what I’m trying to get at is that the “growth” of the preceeding ~10 years was due to excessive and **totally unsustainable** leverage; and by deleveraging to fundamentally sustainable levels, this “growth” would have to be reversed.

IMHO, the “financial crisis” was happening as asset prices (and “growth”) were accelerating to unsustainable heights as a result of all of that leverage and debt (that could NEVER be covered). Those prices and growth rates were never “normal” to begin with.

[CA renter]

Do you think that if the central banks and governments around the world (indluding China) were to have allowed everything to fall to wherever it was going to go, without any intervention, that those single-digit P/Es (and prices of assets, in general) were out of line?

I guess what I’m trying to get at is that the “growth” of the preceeding ~10 years was due to excessive and **totally unsustainable** leverage; and by deleveraging to fundamentally sustainable levels, this “growth” would have to be reversed.

IMHO, the “financial crisis” was happening as asset prices (and “growth”) were accelerating to unsustainable heights as a result of all of that leverage and debt (that could NEVER be covered). Those prices and growth rates were never “normal” to begin with.

[CA renter]

Do you think that if the central banks and governments around the world (indluding China) were to have allowed everything to fall to wherever it was going to go, without any intervention, that those single-digit P/Es (and prices of assets, in general) were out of line?

I guess what I’m trying to get at is that the “growth” of the preceeding ~10 years was due to excessive and **totally unsustainable** leverage; and by deleveraging to fundamentally sustainable levels, this “growth” would have to be reversed.

IMHO, the “financial crisis” was happening as asset prices (and “growth”) were accelerating to unsustainable heights as a result of all of that leverage and debt (that could NEVER be covered). Those prices and growth rates were never “normal” to begin with.

[sobmaz]

[quote=Eugene][quote=sobmaz]
The newly created capital is used to buy necessities, necessities that are increasingly made in Asia.

Mr. Ching Chong, is lifted out of poverty producing what we now fail to produce for ourselves. Mr. Chong, takes his new economic freedom and buys MILK. Hey buys oil.

So, your average guy isn’t getting more, however more people now have the means to buy world commodities.

The situation is, we can now create infinite amounts of capital out of thin air, lifting billions out of poverty but mother nature just won’t cooperate with that infinite word.

Prior to 1972, capital formation had limits.[/quote]

That newly created capital is not used to buy anything. It is not in the hands of people who do any real buying. It never leaves the vaults of financial institutions.[/quote]

You have got to be kidding, right?

Let me spell it out for you.

The FED prints money and buys u.s. treasuries, keeping borrowing costs low for the Federal Government. The Federal Government, able to borrow at near zero rates, borrows for wars, stimulus and the reproductive cycle of the Duck Billed Platapussy.

When the Federal Government can borrow into existence trillions of dollars at near zero rates, that money makes it to Iraq for bribes, for Iraqi schools and roads. The Federal Government is able to extend unemployment benefits. The Federal Government is able to bail out Freddie Mac and Fanniea and on and on and on.

All this money begins circulating in the world economy and ends up in the hands of more and more people who then consume more and more commodities.

Where you get the idea newly created money doesn’t see the light of day, well, I think you have been listening to Ben Bernanke a bit too much.

A lot of smart economist disagree with you and Ben, and the ultimate truth detector does as well, which is Gold.

[sobmaz]

[quote=Eugene][quote=sobmaz]
The newly created capital is used to buy necessities, necessities that are increasingly made in Asia.

Mr. Ching Chong, is lifted out of poverty producing what we now fail to produce for ourselves. Mr. Chong, takes his new economic freedom and buys MILK. Hey buys oil.

So, your average guy isn’t getting more, however more people now have the means to buy world commodities.

The situation is, we can now create infinite amounts of capital out of thin air, lifting billions out of poverty but mother nature just won’t cooperate with that infinite word.

Prior to 1972, capital formation had limits.[/quote]

That newly created capital is not used to buy anything. It is not in the hands of people who do any real buying. It never leaves the vaults of financial institutions.[/quote]

You have got to be kidding, right?

Let me spell it out for you.

The FED prints money and buys u.s. treasuries, keeping borrowing costs low for the Federal Government. The Federal Government, able to borrow at near zero rates, borrows for wars, stimulus and the reproductive cycle of the Duck Billed Platapussy.

When the Federal Government can borrow into existence trillions of dollars at near zero rates, that money makes it to Iraq for bribes, for Iraqi schools and roads. The Federal Government is able to extend unemployment benefits. The Federal Government is able to bail out Freddie Mac and Fanniea and on and on and on.

All this money begins circulating in the world economy and ends up in the hands of more and more people who then consume more and more commodities.

Where you get the idea newly created money doesn’t see the light of day, well, I think you have been listening to Ben Bernanke a bit too much.

A lot of smart economist disagree with you and Ben, and the ultimate truth detector does as well, which is Gold.

[sobmaz]

[quote=Eugene][quote=sobmaz]
The newly created capital is used to buy necessities, necessities that are increasingly made in Asia.

Mr. Ching Chong, is lifted out of poverty producing what we now fail to produce for ourselves. Mr. Chong, takes his new economic freedom and buys MILK. Hey buys oil.

So, your average guy isn’t getting more, however more people now have the means to buy world commodities.

The situation is, we can now create infinite amounts of capital out of thin air, lifting billions out of poverty but mother nature just won’t cooperate with that infinite word.

Prior to 1972, capital formation had limits.[/quote]

That newly created capital is not used to buy anything. It is not in the hands of people who do any real buying. It never leaves the vaults of financial institutions.[/quote]

You have got to be kidding, right?

Let me spell it out for you.

The FED prints money and buys u.s. treasuries, keeping borrowing costs low for the Federal Government. The Federal Government, able to borrow at near zero rates, borrows for wars, stimulus and the reproductive cycle of the Duck Billed Platapussy.

When the Federal Government can borrow into existence trillions of dollars at near zero rates, that money makes it to Iraq for bribes, for Iraqi schools and roads. The Federal Government is able to extend unemployment benefits. The Federal Government is able to bail out Freddie Mac and Fanniea and on and on and on.

All this money begins circulating in the world economy and ends up in the hands of more and more people who then consume more and more commodities.

Where you get the idea newly created money doesn’t see the light of day, well, I think you have been listening to Ben Bernanke a bit too much.

A lot of smart economist disagree with you and Ben, and the ultimate truth detector does as well, which is Gold.

[sobmaz]

[quote=Eugene][quote=sobmaz]
The newly created capital is used to buy necessities, necessities that are increasingly made in Asia.

Mr. Ching Chong, is lifted out of poverty producing what we now fail to produce for ourselves. Mr. Chong, takes his new economic freedom and buys MILK. Hey buys oil.

So, your average guy isn’t getting more, however more people now have the means to buy world commodities.

The situation is, we can now create infinite amounts of capital out of thin air, lifting billions out of poverty but mother nature just won’t cooperate with that infinite word.

Prior to 1972, capital formation had limits.[/quote]

That newly created capital is not used to buy anything. It is not in the hands of people who do any real buying. It never leaves the vaults of financial institutions.[/quote]

You have got to be kidding, right?

Let me spell it out for you.

The FED prints money and buys u.s. treasuries, keeping borrowing costs low for the Federal Government. The Federal Government, able to borrow at near zero rates, borrows for wars, stimulus and the reproductive cycle of the Duck Billed Platapussy.

When the Federal Government can borrow into existence trillions of dollars at near zero rates, that money makes it to Iraq for bribes, for Iraqi schools and roads. The Federal Government is able to extend unemployment benefits. The Federal Government is able to bail out Freddie Mac and Fanniea and on and on and on.

All this money begins circulating in the world economy and ends up in the hands of more and more people who then consume more and more commodities.

Where you get the idea newly created money doesn’t see the light of day, well, I think you have been listening to Ben Bernanke a bit too much.

A lot of smart economist disagree with you and Ben, and the ultimate truth detector does as well, which is Gold.

[sobmaz]

[quote=Eugene][quote=sobmaz]
The newly created capital is used to buy necessities, necessities that are increasingly made in Asia.

Mr. Ching Chong, is lifted out of poverty producing what we now fail to produce for ourselves. Mr. Chong, takes his new economic freedom and buys MILK. Hey buys oil.

So, your average guy isn’t getting more, however more people now have the means to buy world commodities.

The situation is, we can now create infinite amounts of capital out of thin air, lifting billions out of poverty but mother nature just won’t cooperate with that infinite word.

Prior to 1972, capital formation had limits.[/quote]

That newly created capital is not used to buy anything. It is not in the hands of people who do any real buying. It never leaves the vaults of financial institutions.[/quote]

You have got to be kidding, right?

Let me spell it out for you.

The FED prints money and buys u.s. treasuries, keeping borrowing costs low for the Federal Government. The Federal Government, able to borrow at near zero rates, borrows for wars, stimulus and the reproductive cycle of the Duck Billed Platapussy.

When the Federal Government can borrow into existence trillions of dollars at near zero rates, that money makes it to Iraq for bribes, for Iraqi schools and roads. The Federal Government is able to extend unemployment benefits. The Federal Government is able to bail out Freddie Mac and Fanniea and on and on and on.

All this money begins circulating in the world economy and ends up in the hands of more and more people who then consume more and more commodities.

Where you get the idea newly created money doesn’t see the light of day, well, I think you have been listening to Ben Bernanke a bit too much.

A lot of smart economist disagree with you and Ben, and the ultimate truth detector does as well, which is Gold.

[Eugene]

[quote]Do you think that if the central banks and governments around the world (indluding China) were to have allowed everything to fall to wherever it was going to go, without any intervention, that those single-digit P/Es (and prices of assets, in general) were out of line?[/quote]

Things could have fallen deeper than they were. TEMPORARILY. But there was still real demand for AA aluminum, for CAT heavy machinery, and for TXN chips in the world, and it didn’t evaporate as a result of a phase in a business cycle.

[Eugene]

[quote]Do you think that if the central banks and governments around the world (indluding China) were to have allowed everything to fall to wherever it was going to go, without any intervention, that those single-digit P/Es (and prices of assets, in general) were out of line?[/quote]

Things could have fallen deeper than they were. TEMPORARILY. But there was still real demand for AA aluminum, for CAT heavy machinery, and for TXN chips in the world, and it didn’t evaporate as a result of a phase in a business cycle.

[Eugene]

[quote]Do you think that if the central banks and governments around the world (indluding China) were to have allowed everything to fall to wherever it was going to go, without any intervention, that those single-digit P/Es (and prices of assets, in general) were out of line?[/quote]

Things could have fallen deeper than they were. TEMPORARILY. But there was still real demand for AA aluminum, for CAT heavy machinery, and for TXN chips in the world, and it didn’t evaporate as a result of a phase in a business cycle.

[Eugene]

[quote]Do you think that if the central banks and governments around the world (indluding China) were to have allowed everything to fall to wherever it was going to go, without any intervention, that those single-digit P/Es (and prices of assets, in general) were out of line?[/quote]

Things could have fallen deeper than they were. TEMPORARILY. But there was still real demand for AA aluminum, for CAT heavy machinery, and for TXN chips in the world, and it didn’t evaporate as a result of a phase in a business cycle.

[Author]

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