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Financial storm is coming

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Esso
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« on: January 26, 2016, 07:28:59 AM »

Hello at all,

the first days in 2016 at the stock markets are the craziest i have ever seen. A lot of indicators are showing that we are going into a recession. The Baltic dry index (Index for Shipping Goods)is at the lowest point ever. Imports and exports worldwide going significantly down in the last weeks. High yield bonds are going crazy. Chinas interbanking intrest rates explodes. The third avenue fond stopped payings to his custumours. The US Economic is weakining. Italians banks are struggeling. China is weakingin extremly. Stock Makets have lost in avg. about 10% in the first days of this year. Oil pirce and other comoditie prices have fallen between 50-80%.

This facts remeber me at the crises of 08.

I think that we will see a recession in 2016/17. 2008 will look like a joke againt it because debts are much higher than in 2008. I also think that this could be one of the biggest cirses in modern human history. The bond market is the huggest bubble ive ever seen. (Thanks to the worldwide central banks)

So my suggestions are now:

- Sell stocks and take the winnings with you (Today Dow at 15.820) or buy an insurance against a drop of stock markets (short stocks) to rebuy at lower prices
- Short the stock markets
- Be carfull with short term oil and comoditiy investments (if your going to buy or sell oil at the future market you have to know about forward curve esecially at oil market)
- buy a mix of gold and silver like 10-15% of your capital or go into mining stocks (during the last greatdepression in 1929 stocks went down (if you hade invested 10.000, at the low you had about 2.500)(gold and silver mining stocks went up from 10.000 to 62.000 in the same period)).
- keep a lot of your capital in cash (if you see inflationary tendencies then the time is cooming to invest the money)


If central banks will fail and cant stop the economy from falling into a recession we could see a huge crises but otherways a huge oppurtunitiy to buy stocks maybe 60-80% cheaper.

Everything could be diffrent maybe if the economy gains strenght again but the warnings are huge at the moment.
Also we have cycles which show that we have in average all 7-8 years a recession (2001, 2008, 2016?)

Keep in mind that everythiong can come diffrent at financial markets and i dont have to be right. So everything you do you do it at your own risk.


« Last Edit: January 26, 2016, 12:40:29 PM by Esso » Logged

Kokos, CFA
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« Reply #1 on: January 26, 2016, 11:45:04 AM »

Mining stocks will go down like everything else in equity markets if there is a recession.
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Esso
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« Reply #2 on: January 26, 2016, 12:39:18 PM »

your absolutly right. I have forgot to say that i was talking about gold and silver mining stocks. Not industrial metals.
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Kokos, CFA
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« Reply #3 on: January 26, 2016, 02:18:03 PM »

I know sir, but same applies to precious metals mining stocks imo. I attached graph of gold miners ETF during 2008 financial crisis vs SPX Index. You can see it did not offer much protection, not to talk about price appreciation. Btw. gold has a much larger above ground stockpile than most other mined commodities (there is more than 35 years of above ground gold supply at current consumption levels).

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francescosol
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« Reply #4 on: January 26, 2016, 02:35:48 PM »

very interesting.... there is a business tool with wich we can go short again the market, with the lower possible risk?
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Esso
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« Reply #5 on: January 26, 2016, 04:39:59 PM »

If we see a melt down in financial markets things will be diffrent than in 2008. my studies are going back to the depression in 1929 stocks lost there 80% value goldmines gained 620% value. My opinion is we will see short term deflation like 2008 and gold could fall shortly but than central banks will overreact and fight deflation with helicopter money. This could  be followed by a lose of trust into paper money -> and than people will switch into "safe heaven" markets. But all of this is speculation.  all i want to say with this is, that i see huge risks and i want to find the best assets. And i think cash(till infaltion starts)  and gold/silver could be very good at that moment. But nobody knows. We will see that happens. 
S&P is at 1897$, Gold at 1.118$  we will se there we will be in 2017.
« Last Edit: January 26, 2016, 04:43:36 PM by Esso » Logged

qbet
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« Reply #6 on: January 26, 2016, 05:32:19 PM »

If we see a melt down in financial markets things will be diffrent than in 2008. my studies are going back to the depression in 1929 stocks lost there 80% value goldmines gained 620% value. My opinion is we will see short term deflation like 2008 and gold could fall shortly but than central banks will overreact and fight deflation with helicopter money. This could  be followed by a lose of trust into paper money -> and than people will switch into "safe heaven" markets. But all of this is speculation.  all i want to say with this is, that i see huge risks and i want to find the best assets. And i think cash(till infaltion starts)  and gold/silver could be very good at that moment. But nobody knows. We will see that happens. 
S&P is at 1897$, Gold at 1.118$  we will se there we will be in 2017.
Why would the price of gold drop ?
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Esso
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« Reply #7 on: January 26, 2016, 05:53:28 PM »

If we see a melt down in financial markets things will be diffrent than in 2008. my studies are going back to the depression in 1929 stocks lost there 80% value goldmines gained 620% value. My opinion is we will see short term deflation like 2008 and gold could fall shortly but than central banks will overreact and fight deflation with helicopter money. This could  be followed by a lose of trust into paper money -> and than people will switch into "safe heaven" markets. But all of this is speculation.  all i want to say with this is, that i see huge risks and i want to find the best assets. And i think cash(till infaltion starts)  and gold/silver could be very good at that moment. But nobody knows. We will see that happens. 
S&P is at 1897$, Gold at 1.118$  we will se there we will be in 2017.
Why would the price of gold drop ?

because of short term deflation if everybody needs money they will liquidate their assets. but this doesnt mean that it has to drop eventually it will start rising instantly. 

Picture shows Gold&S&P Ratio if you look at great depression 1929 gold exploded compared to s&p.
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Kokos, CFA
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« Reply #8 on: January 27, 2016, 08:53:37 AM »

If we see a melt down in financial markets things will be diffrent than in 2008. my studies are going back to the depression in 1929 stocks lost there 80% value goldmines gained 620% value. My opinion is we will see short term deflation like 2008 and gold could fall shortly but than central banks will overreact and fight deflation with helicopter money. This could  be followed by a lose of trust into paper money -> and than people will switch into "safe heaven" markets. But all of this is speculation.  all i want to say with this is, that i see huge risks and i want to find the best assets. And i think cash(till infaltion starts)  and gold/silver could be very good at that moment. But nobody knows. We will see that happens. 
S&P is at 1897$, Gold at 1.118$  we will se there we will be in 2017.
Why would the price of gold drop ?

Rising interest rates.
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Esso
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« Reply #9 on: February 03, 2016, 07:17:19 PM »

If we see a melt down in financial markets things will be diffrent than in 2008. my studies are going back to the depression in 1929 stocks lost there 80% value goldmines gained 620% value. My opinion is we will see short term deflation like 2008 and gold could fall shortly but than central banks will overreact and fight deflation with helicopter money. This could  be followed by a lose of trust into paper money -> and than people will switch into "safe heaven" markets. But all of this is speculation.  all i want to say with this is, that i see huge risks and i want to find the best assets. And i think cash(till infaltion starts)  and gold/silver could be very good at that moment. But nobody knows. We will see that happens. 
S&P is at 1897$, Gold at 1.118$  we will se there we will be in 2017.
Why would the price of gold drop ?

Rising interest rates.

haha ;D... we will see lower or even negativ intrest rates in the next years. look at japan their intrest rates are at zero since almost 15 years. And since two days its at -0,10%... 
Central Banks are fighting the coming deflation with everything they have. And US intrest rates will go back to zero or maybe negative area.

that will they do if the next crisies will come ... giving everybody money for free to push the economy??? ;D
« Last Edit: February 03, 2016, 07:19:33 PM by Esso » Logged

Esso
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« Reply #10 on: February 11, 2016, 04:24:01 PM »

after two weeks we can look back at huge performance. its getting more and more clear that this could be a serious crisis.

Trades: Sell S&P, buy Gold/Silver, buy Gold Mines (HUI Index)

January 26:
S&P is at 1897$, Gold at 1.118$, Gold Miners Index was at 117

Today:
S&P is at 1812$  -> +5% Performance
Gold 1249$  -> +12%
Goldminers Index 159  (HUI) -> +35%
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vinciguerra
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« Reply #11 on: February 11, 2016, 07:17:19 PM »

gold as a hedge,  that's sooo the 20st century.  if you're so convinced why not just buy puts, short the market?  why the need for a very questionable long in gold?   
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Kokos, CFA
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« Reply #12 on: February 12, 2016, 08:44:36 AM »

Gold might run into problems if emerging market countries are forced to liquidate their gold reserves because of budget deficits. Not saying it is a bad investment, just that it is a possible negative catalyst. Personally, I would rather hold silver, maybe platinum based metals.
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