Refusal To Change
The markets tank again. Every drop is due to an even uglier problem than the day before. Yet with each fall, I always here, “well, it can’t get worse than this”.
Why do people refuse to believe that this is an utterly disastrous situation? Or even a bad situation? The worldwide market and economy is in serious trouble. Don’t people learn from the previous few weeks or months? With each increasingly disastrous news, people always seem to look for the lighter side. We are now at the point of emerging market countries defaulting on their debt and I’m hearing, “well, that’s as bad as it can get”. Why? Why can’t Korea or Spain or Germany default on their debt?
This leads me to two conclusions. 1) This will be a long and hard recession or worse. We must get out of the denial. Not just a few smart analysts, but everyone. 2) The dollar will remain strong for the time being. With big countries going under, the demand for Dollars will remain strong. That helps a few big companies in the short term, but not Joe six-pack.
Just remember this. When and if China ever stops buying Treasuries, the world is over. Buy guns and learn how to hunt and fish.
*image source: thebigpicture
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