tag:blogger.com,1999:blog-2986124651030959736.post5979078872525367223..comments2024-03-28T09:42:38.695-05:00Comments on Stocks, Bonds & Politics: Financial Armageddon-Avoided or Just Delayed/Bought 50 WMT at 53.52/Bought 50 MWR in regular IRA at 22.25TENNINDEPENDENThttp://www.blogger.com/profile/17444227958539559639noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-2986124651030959736.post-986474807437775542010-12-27T11:30:32.629-06:002010-12-27T11:30:32.629-06:00You may want to read this decision by the U.S. Cou...You may want to read this decision by the U.S. Court of Appeals for the 4th Circuit, in a case involving Mr. Stansberry. http://pacer.ca4.uscourts.gov/opinion.pdf/081037.P.pdf<br /><br />I am predicting a depression triggered by sovereign defaults. The most serious default will occur when there is a failed U.S. treasury auction. http://www.istockanalyst.com/article/<br />viewarticle/articleid/3861666 Then followed by several more. The problem will ultimately be the sheer amount of debt that has to be financed. <br /><br />If that came to pass, there will be asset classes that may hold their value. Those asset classes would not be state or municipal bonds, where the rot is already extensive, or U.S. treasury bonds. <br /><br /> Possibly, senior notes from large financially viable U.S. corporations would be an alternative. Interest on those notes have to be paid to avoid bankruptcy and those corporations will do whatever necessary to continue their business. This would include companies like Coca Cola or JNJ, but would not include any financial company or any company with a large financial business like GE. Bonds from emerging market nations may also be an option. Also, many banks will survive this kind of catastrophe and cash at financially sound institutions may be safe. <br /><br />When I refer to foreign government bonds, I do not mean Costa Rica. I am referring now to Australia, Canada, & Switzerland. Part of my planning for this possibility includes the ownership of the Permanent Portfolio mutual fund that is heavy into gold and silver and Swiss government bonds. <br /><br />I am not predicting an imminent debacle. We may very well have a long term bull market in stocks take hold first. The long term forecast, meaning ten to fifteen years from now, is that the budget problems in the U.S. will become increasingly more dire in the coming years, made worse by a rise in interest rates.<br /><br />At the abnormally low rates prevailing now, the treasury incurred 413 billion in interest expense in FY 2010 to service the national debt. http://www.treasurydirect.gov/govt<br />/reports/ir/ir_expense.htm<br /><br />I am predicting that this amount will exceed 1 trillion within ten years. <br /><br /> The need for refinancing maturing debt and issuing new debt to fund future deficits will eventually swamp the capacity and willingness of lenders to feed the beast which will lead to a U.S. default. That series of defaults will be the trigger for the depression in this scenario. <br /><br />The recent recession has just exposed the rot in finances among many state and local governments. Their problems will just become worse too. It is just amazing to me that Illinois has not been paying its vendors for months now.TENNINDEPENDENThttps://www.blogger.com/profile/17444227958539559639noreply@blogger.comtag:blogger.com,1999:blog-2986124651030959736.post-64532439306107699282010-12-27T10:06:04.127-06:002010-12-27T10:06:04.127-06:00This video is interesting, to take your worst case...This video is interesting, to take your worst case scenario to the EXTREME.<br />http://www.youtube.com/watch?v=nI-BIVWlc7A<br />(Porter Stansberry/End Of America)<br />Trouble is, in this outcome, assets in overseas banks will be frozen most likely by the US authorities. I have a friend in Costa Rica, the US froze his account to pay taxes, not too safe anywhere.I tend to think we slip into inflation/hyperinflation rather than an official USD default or devaluation. Comments appreciated.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2986124651030959736.post-67359714748346847692010-12-27T09:09:34.197-06:002010-12-27T09:09:34.197-06:00I was only able to find this (old now)on TPs phase...I was only able to find this (old now)on TPs phase-outs<br /><br />http://www.bankbryancave.com/capital-treatment-of-trust-preferred-securities-and-tarp-cpp-preferred-stock/Anonymousnoreply@blogger.com