[gework]

(11-25-2018 02:39 AM)jbkunt2 Wrote:  

I agree with the above. The federal debt and deficit is terrifying.

The clown Republicans who tore Obama to shreds for increasing the deficit during a downturn are a disgrace. They have blown it up during relatively rosy economic times.

It’s disgusting.

The deficit won't go down until the whole thing is either too ridiculous to continue or the game collapses.

When Trump was elected I called:

1) the economy would see good growth based on real fundamentals
2) he would continue to wrack up the defecit

It's electorally impossible to roll back the state in the current environment. Too many people who vote for the conservative in name only parties are dependent on the government.

The US has huge room to take on more debt and will continue to do. Currently the US debt service is about 7% of the budget. Japan is at 25% and still one of the better houses in a bad neighbourhood. Debt and welfare will continue to envelop the entire budget until people abandon the whole thing.

I think we will see a crash in the next few years and another around 2030. With those and the coming social security and muni pension crisis, debt to GDP will head past 250%.

(11-25-2018 09:53 PM)Swell Wrote:  

I'm new to investing and I'm curious that is the general opinion of high dividend stocks?

They are generally paid out by big companies that are in mature markets that at best can take market share, like oil, gas and banking. Thus they are not likely to have upstart competitors. If it's a sound market for the future, like energy, then they should be pretty safe. But right now they are mostly overbought and I think we are heading for a crash.

(11-27-2018 08:34 AM)Arado Wrote:  

I'm pretty conflicted about gold.

Gold is a hedge against big inflation+. Stock selling and the coming real bloodbath is deflationary - people are chasing dollar's - whose value goes up. The increasing asset liquidations of the increasingly retired population is deflationary.

In the 08 crash most of the QE money didn't come into circulation. It was used to prop up the banks who'd become illiquid. Money velocity went down, so fewer dollars chasing an economy that lagged in slowing to that drying up - deflationary.

The gold rally was due to fear that there would be big inflation due to the QE and stimulus. But all that did was paper over some of the deflationary pressures. It didn't cause inflation. Thus the gold bull run was based on speculation that was wrong.

If we are going into a crash it will again be deflationary. Inflationary forces are more money coming into the real economy and that money moving faster. The Fed can and will be able to paper it over again. QE will return and that's when we'll probably see another unnecessary gold rally based on the feat that this time it really will be the end. But it probably won't be.

I think the only likely scenario in which we'll see dollar inflation is if the world starts dumping their reserve dollars and T-bills, which will only happen if there is something that becomes more valued than the dollar, like the yuan.

So, now gold prices are fair and the gold stocks about the same. If we crash, they will go down like last time, as there will again be a rush to the dollar and away from assets and equities. That would be the best time to buy.

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Anyone have any tips on what to buy to sit out until the crash?