U Not Gonna Like This

Someone left a comment about my article "Rescuing Your Money":

BrianFH said...
R U a "market maker"?

Nope. I'm not a stock trader or a speculator, I don't even play one on TV. (Sorry to all you cleché haters out there.)

There are several factors that play into the current situation:

First, the retirement of the Baby Boomers (See HERE,and HERE for more.)

Second, overspending of money by the U.S. govt. ($9 trillion gross national debt is owed by the "General Fund." )

This caused forigen govts. to stop using dollars as early as 2004 (maybe late 2003.) Countries in the Middle East and Europe have been ditching dollars for about 3-4 years now. (A sort of "flight-to-liquidity" for a much more stable currency if you will, more and more countries have been using dollars.) The pace of dollar dumping has increased with the Sub Prime Meltdown.

And of course the aforementioned the Sub-Prime Time Bomb™ from HERE:

Chain lightning

11 November 2007

Cliff Taylor explains why a crisis which began with a
dip in the US housing market has set off a sequence of
events culminating in severe bad news for the Irish
economy.

Slowly but surely, it has become clear that the crisis
started by sub-prime lending in the US is set to have
a major impact on the world economy. In the space of
just over three months, the crisis has broken, then
appeared to ease, then returned with a vengeance.

Here is how the trend has unfolded, and how it has
become clear that it is of major significance for our
economy. Is the current turmoil in financial markets
still due to the US sub-prime crisis?

Timeline

June 30, 2004
The US Federal Reserve starts a cycle of interest rate
rises that lift borrowing costs from 1 per cent, their
lowest level since the 1950s, to their current levels.
The Fed raises rates 17 times to slow inflation, with
two recent cuts in response to the crisis.

August 2005 – 2006
Higher borrowing costs begin to affect the US housing
market and the property boom starts to slow. Defaults
on sub-prime mortgages start to increase.

March 12, 2007
Shares in New Century Financial, one of the biggest
sub-prime lenders in the US, are suspended amid fears
it may be heading for bankruptcy.

April 2
New Century Financial files for Chapter 11 bankruptcy
protection.

June 14
Reports emerge that Bear Stearns is liquidating its
assets in a hedge fund that made large bets on the US
sub-prime market.

June 20
Merrill Lynch seizes and sells $800 million (€545
million) of bonds that are being used as collateral
for loans made to Bear Stearns’ hedge funds.

July 4
The Financial Services Authority (FSA) in Britain says
it will take action against five brokers that sell
sub-prime mortgages, claiming they offer loans to
people who should not be given them.

July 20
Federal Reserve chairman Ben Bernanke warns that the
crisis in the US sub-prime lending market could cost
up to $100 billion.

July 26
Steady falls in Irish banking shares drive the Iseq
index below 8,500.

July 27
Worries about the sub-prime crisis hammer global stock
markets and the main US Dow Jones stock index loses
4.2 per cent in five sessions, its worst weekly
decline in almost five years.

August 3
US stock markets fall heavily. A top Bear Stearns
executive says credit markets are in the worst turmoil
he has seen in 22 years.

August 5
AIB executives buy shares in the bank. Chief executive
Eugene Sheehy spends €2.8 million buying AIB stock in
a move that should bolster confidence in the share
price outlook.

August 6
American Home Mortgage, one of the largest US
independent home loan providers, files for bankruptcy
after laying off most of its staff.

August 9
French bank BNP Paribas suspends three investment
funds worth €2 billion (stg£1.4 billion), citing
problems in the US sub-prime mortgage sector. BNP says
it cannot value the assets in the fund, because the
market has disappeared.
Dutch bank NIBC announces losses of €137 million from
asset-backed securities in the first half of this
year. The European Central Bank (ECB) pumps €95
billion into the eurozone banking market to allay
fears about a sub-prime credit crunch. The US Federal
Reserve and the Bank of Japan take similar steps.

August 13
Wall Street giant Goldman Sachs says it will pump $2
billion into one of its funds to help shore up its
value.

August 17
The US Federal Reserve cuts the interest rate at which
it lends to banks by a quarter of a percentage point
to help banks deal with credit problems.

August 26
German regional bank SachsenLB is sold to Germany’s
biggest regional bank, Landesbank Baden-Wuerttemberg,
after coming close to collapsing because of its
exposure to sub-prime debt.

September 4
The rate at which British banks lend to each other –
known as the London Interbank Offered Rate (Libor) –
rises to its highest level in almost nine years.

September 14
British bank Northern Rock says ‘‘extreme conditions’’
in financial markets forced it to approach the Bank of
England for assistance. The Iseq index falls to below
8,000.

September 17
Northern Rock’s problems deepen as the bank run gets
worse and queues of worried customers lengthen at many
of its 76 branches. The Iseq plummets to below 7,500.

September 18
The Fed cuts interest rates by 0.5 per cent. A rally
in Irish shares begins which takes the index back
above 8,500 over the next month.

October 31
The Fed cuts rates by a further 0.25 per cent.

November 3
Continued concerns of further sub-prime losses among
international banks drags shares down further. The
Iseq falls below 7,000.

November 8
Irish bank stocks plummet to their lowest levels in
three years.

© Post Publications Limited

These factors have caused gold to stealiy rise higher during the last several months and will probably hit it's high ($850) before the end of this month. In addition the Euro is also doing better against the dollar. The dollar will probably crash, if it doesn't there will be a prolonged crisis or long term recession.

For some reason when the dollar slides gold goes up. I dunno why this is but if I ever find out I'll be glad to post an explanation..

HERE is a Newswire article with further information.

So at this particular point in time it would just be a good idea to start trying to make a move towards acquiring some bullion coins and Euros to try to ease the impact of the comming financial problems.

PS. I've heard that the British Pound aslo had a crisis in which it lost 80% of it's value but I'm having a diffcult time finding anything about it. Again, if I find anything about this I'll post it.

So start trying to make money in Euros, and try to buy bullion coins whenver money allows you to do so, and you may end up better off in the long run. (Or at least until any pending crisis is over.)