Mother of all Bubbles?

There are more signs that a ‘bubble’ in money itself has manifested.

The talk about ‘what happens after QE2’ is a real concern to anyone watching the stock market.

Quantitative Easing Rounds1 and 2Taking a look at the chart, one can see the QE 1 & 2 rounds which amount to a $1.2 Trillion change of hands.  From the public to private sectors.  The idea that the American public account can and will go on funding this sort of transfer is madness.  Yet even now the specter of a QE3 is being heard of from many sources.

Without such a continuing ‘pumping up’ of the money supply at M1, there cannot be any way to slow the decrease in M3 (from banks and other private money creation instruments).

Quite literally 25-45% of the value on the Dow or other stock indexes may simply vanish overnight as the reality of no continuing expansion of the money supply.  When this happens the ‘agreements’ of money and what anything is worth will also dissipate.

Only the most stable valuations will continue, only commodities that we cannot live without will hold value.

Do not count on such things as value comparisons or estimates based on any of the old models for comparison, such as real estate, as these methods cannot account for such a radical change in the ‘basis’ of the system.

Only those who deliver those commodities, food, fuel, water, shelter and ‘real’ opportunity will be the survivors of the coming ‘pop’ of the bubble.  Look to oil companies and their supporting industries, look to agricultural production industry, carefully examine any geographic based investment for the water needs and supply, also likewise keep in mind the housing presence for any workers in such geographic bound investments.  Finally carefully consider the government stability in providing for opportunity to the people in the region they control and in what their motives are to maintain that opportunity while remaining stable.

Welcome to the Year of living Dangerously.

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