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Cash and where we go from there
Old 06-06-2015, 05:52 PM   #1
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Cash and where we go from there

This may get me drummed out of ER, but I'm looking for a clear unbiased explanation of what's going on in the US Fed, the EU, China, Russia and places like Greece and Italy, and... how the IMF factors in to all of this.

Finance headlines from all directions come up with dire warnings of worldwide money chaos, a change to China as the new"dollar standard" and seemingly valid notices that US banks are trying to eliminate cash as a buying tool and are refusing to allow cash to be placed in safe deposit boxes.

All kinds of sources from The Atlantic, Motley Fool, NYT, Charles Hugh Smith, Zero Hedge, Forbes and the LinkTV, Aljazeera and MSNBC shows. Every one with a different "take" and when you read or watch the piece, all seem sincere and well sourced.

From the national debt, to the unfunded liabilities, to the underfunded pension funds and the overhang in Freddie and Fanny from the last bailout, the entire picture is a worrier's nightmare. The dire predictions about derivatives and hundreds of chartists predicting "whatever"... could drive a naive believer to think 1929 and make bad decisions... moneywise and personal.

All of this information comes in piecemeal... shocking headlines... doomsday... preppers... NRA... political biases, and those "papers"... hundreds of pages of "proof" theories, historical comparisons etc, etc, etc,,,
and those etc's cover a lot of ground.

Like nobody really knows, but secretly they "know".

Current scare headlines seem to center on the FED, and the movement in interest rates. Increasingly a lot more attention to "cash" and its' importance in trade. This, supposedly linked to the fear of "cash" encroaching on banks' liquidity.

I could go on and on... and truthfully, so could you. Who do you listen to? and do they seem to have a handle on the worldwide situation, or just a memory of the worldwide market when it last seemed this unstable?

A gigantic jigsaw puzzle that, for the past 7 years seems to have many solutions that never seem to materialize. Worse still...
Worse still... an 800 lb. gorilla in the room that everyone sees and knows about, but inevitably believes that if we don't disturb him... he'll let us go on going on, for another 7 years.

I don't have a dog in this fight, but the whole subject of money, and cash fascinates me as if I were watching a world-war begin...

I admit to being confused... every assumption has been torn to shreds. Every prediction (by anyone) has been wrong. I confess that those here on ER, who have poo-pooed the apocalyptic predictions have been right. the market continues... the earnings have continued... (even my own pitiful portfolio).

So my thinking has no validity. I confess and bow out.

Never leave an opening post without a question.

Who to listen to?
What's going to happen?

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Old 06-06-2015, 06:28 PM   #2
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Turn off the TV, kiss your wife, go for a walk and just enjoy being alive.

"Take therefore no thought for the morrow: for the morrow shall take thought for the things of itself. Sufficient unto the day is the evil thereof." Matthew 6:34 (KJV)
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Old 06-06-2015, 06:33 PM   #3
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When will you write the second chapter?


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Old 06-06-2015, 07:01 PM   #4
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I find the collective wisdom of the posters at this forum to have great calming value. It seems that the consensus to most anything is to turn off the news, take it easy, go for a walk, this too shall pass, and son on. And by golly, so it has...

I recall the panic of 2008 when it seemed the world really was heading down the chute rather rapidly. As it turned out a panic response then was absolutely the wrong thing to do. As for now... I dunno all I see is a lot of media froth.
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Old 06-06-2015, 07:30 PM   #5
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....all I see is a lot of media froth.
As an old friend of mine, who quit working at 35 and turns 64 in December, calls it..."Babble".
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Old 06-06-2015, 07:43 PM   #6
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I think 2008 time was a much scarier time, many parts of financial community were vulnerable and industry was way down. I just don't see the parallel today myself, we may have a market downturn from all time highs but the foundation is solid in my view.


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Old 06-06-2015, 08:23 PM   #7
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Turn off the TV, kiss your wife, go for a walk and just enjoy being alive. ...
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When will you write the second chapter?


OK, I'll admit to skimming and not reading every word. It comes across as Chicken Little talk, but more seriously, for ER types, 30 some years is a loooong time, and lots can happen. Including the US not being a world leader, and that could have dire consequences for US citizens.

But to address your questions:

Who to listen to? I'm not sure. There must be some very smart people out there with insight, but how to figure out who they are? And are they talking (to the general public)? Not the mass-media news talking heads.


What's going to happen? I dunno. What does Uncle Mick say? Stay the course? Be nimble?

-ERD50
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Old 06-06-2015, 09:07 PM   #8
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Don't worry, nothing bad Will happen until I retire next year. Enjoy it while you can!
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Old 06-06-2015, 09:14 PM   #9
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Finance headlines from all directions come up with dire warnings of worldwide money chaos, a change to China as the new"dollar standard" and seemingly valid notices that US banks are trying to eliminate cash as a buying tool and are refusing to allow cash to be placed in safe deposit boxes.

All kinds of sources from The Atlantic, Motley Fool, NYT, Charles Hugh Smith, Zero Hedge, Forbes and the LinkTV, Aljazeera and MSNBC shows. Every one with a different "take" and when you read or watch the piece, all seem sincere and well sourced.
I like the hyperbole and perhaps you are just pulling our strings. I have not seen any recent articles from reputable sources about "dire warnings of worldwide money chaos". In particular, I have not seen anything from the NYT on this, unless NYT is not "New York Times". I don't normally come across the other places you listed.

I have lived in nice places outside the US. I actually think it would be good for the US not to be thought of as the world leader. Let somebody else do that job for a while. It could be quite beneficial for US citizens.
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Old 06-06-2015, 10:38 PM   #10
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Originally Posted by imoldernu View Post
This may get me drummed out of ER, but I'm looking for a clear unbiased explanation of what's going on in the US Fed, the EU, China, Russia and places like Greece and Italy, and... how the IMF factors in to all of this.

You have forgotten sunspots and UFOs.

Ha
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Old 06-07-2015, 12:22 AM   #11
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Babble is a great description.

You can spend precious hours of your life trying to make sense of it.

Don't forget that the news media is a business, and their job is to keep making you come back for more as often as possible.

We severely limit our exposure. Most of it is crazy making.
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Old 06-07-2015, 02:19 AM   #12
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You have to understand that spreading fear is lucrative and the financial media with its dire predictions for looming financial catastrophe is simply employing its own version local TV's "if it bleeds, it leads" approach to attracting viewers/subscribers and therefore advertisers.
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Old 06-07-2015, 07:21 AM   #13
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Think of it this way... At any point in history the world was ending. WW1 before great depression, great depression, dust bowl, WW2, cold war, bay of pigs, Cuban missile crisis, civil rights riots, Vietnam, stagflation, oil crisis, Iran contra, tech crash, war on terror, housing bubble, etc etc.

So yeah... Maybe this time it'll really REALLY end... Or not.

If it does... Doesn't really matter where you put your money. If it doesn't... I matters some but not as much as being consistent and not over reacting. Oh yeah... If it does... It'll seem dumb to have wasted the good time left worrying about it .

Now... If you ENJOY trying to figure it out and make macro and micro financial decisions... That's different. In that case there's always lots of fun to be had

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Old 06-07-2015, 07:23 AM   #14
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Ric Edelman talked about this a couple weeks ago during his radio show. He offered this advice: Don't wait until next year, go to Europe this summer.
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Old 06-07-2015, 08:22 AM   #15
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Like nobody really knows, but secretly they "know".


What's going to happen?

Well, right abut now, I predict Golden State in five games. My next prediction is the Astro's end in third place and we fire the current manager.

(If you really want some perspective, read the Drudge Report!)
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Old 06-07-2015, 08:40 AM   #16
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Well, right abut now, I predict Golden State in five games. My next prediction is the Astro's end in third place and we fire the current manager.

(If you really want some perspective, read the Drudge Report!)
Well I don't turn off the news, as some suggest, but I do consider the source, take it with several gains of salt, and make my own judgements (the news has their own agendas - Duh!)

And that's an interesting baseball prediction, since the Astros have been in first place all season. Usually the only time you can say the Astros are in first place is on opening day. However, if they slip out of first place they may drop like a rock.
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Old 06-07-2015, 03:41 PM   #17
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As we bury this thread, and declare the winners (and the loser). ... just a single word to be on the stone placed over the grave.

CASH

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Old 06-07-2015, 04:05 PM   #18
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Just finished reading a book recommended by Charlie Munger:

Future Babble : Why Expert Predictions Fail – and Why We Believe Them Anyway |

Found it really interesting, especially the "Foxes vs. Hedgehogs" types.

In a nutshell it claims (and shows) that most experts are really bad at forecasting, move goal posts, have trouble admitting they are wrong etc ..

In addition, experts with simple stories get more airtime and attention. Those experts are even more wrong.

Things are gray, life is probablities. And we are all human with human flaws.

So: listen more to people who deal in shades and probabilities, with input from several sources. And recognize that most of the future is unpredictable to a very large degree.

Yet we have to decide something, and within those decision lie assumptions about the future. Personally I tend to go with "the future will likely better than the past".
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Old 06-08-2015, 08:45 AM   #19
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I think things are screwy in the finance world. Negative interest rates? Really?

That said, the resilience of the human animal is amazing. Governments can do what they want but people find a way to make things work.

Most of the world isn't as bad as Greece right now but, while there is some deprivation there, I'm not hearing about mass starvation. I am no fan of the ACA but after a few years in action we read on forums like this all sorts of mechanisms to make it work to your advantage. People find ways to work the system no matter what happens. An outbreak of war or plague might be an exception but anything less and I think we will adapt just fine.
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Old 06-08-2015, 08:54 AM   #20
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Just finished reading a book recommended by Charlie Munger:

Future Babble : Why Expert Predictions Fail and Why We Believe Them Anyway |

Found it really interesting, especially the "Foxes vs. Hedgehogs" types.

In a nutshell it claims (and shows) that most experts are really bad at forecasting, move goal posts, have trouble admitting they are wrong etc ..

In addition, experts with simple stories get more airtime and attention. Those experts are even more wrong.

Things are gray, life is probablities. And we are all human with human flaws.

So: listen more to people who deal in shades and probabilities, with input from several sources. And recognize that most of the future is unpredictable to a very large degree.

Yet we have to decide something, and within those decision lie assumptions about the future. Personally I tend to go with "the future will likely better than the past".
I was just thinking of Buffet and Munger - you don't see them panicking. You also don't see many of the very successful long-term investors panicking either. Indeed, they're sitting on plenty of cash, just waiting for an opportunity to put it to work when people sell low (after buying high).
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