The chances of another market meltdown?

[theo]

As I don't want to hijack Beauranderos' "silver supply tightening" thread any further, I thought I'd start a new discussion here. I'm concerned that there is another 2008 style (or worse) meltdown in the offing. I understand the arguement that the FED, by using QE, will not allow another massive sell off is compelling. However, if those in power are serious about luring retirement investors into guaranteed retirment accounts (filled with mostly with Treasury Bonds); another bear market would be helpful, perhaps even critical. Afterall how will they market Treasury Bonds paying 1% to 3% interest with most major stock averages at or near all-time highs.

This sell off would likely take the paper price PMs down at least 25% to 35%, giving certain well-informed parties a last opportunity the buy up miners and trusts (and perhaps even some physical) at a steep discount. This is why I argued that Barrytrot may yet be wrong in his $25 silver prediction. Finally I tend to think that those in power are resolved make it difficult (or even impossible) for PM holders to further profit off of such an "arcane (not to mention disloyal)" investment strategy.

The article below makes a compelling argument for a near-term sell off.

http://www.bestmindsinc.com/documents/W ... n23.13.pdf

"Shouldn’t investors of all levels be concerned with headlines like, Japan Enters Recession Before Election (FT, 12/10/12), It’s Official: Eurozone Enters Second Recession in Three Years (Time World, 11/15/12), or As China’s Economy Slows, Real Estate Bubble Looms (Washington Post, 10/2/12)? Has the delusion of “unlimited easing”(debt), removed the reality that GLOBAL equity markets can turn down as fast as they have exploded up? Should this not be troubling those who have been in a rush to “get in”?"

[68Camaro]

Chances? 100% and I personally think this is the year (not that intervention couldn't postpone this, again, as it did last year). Others agree (Gerald Celente, for example). Possible by May, probable (70+%) by Fall. Certain by 2017 (if something worse doesn't happen before then). If it doesn't happen, fine, but I'm prepping for it. The only reason it didn't happen last summer was massive central bank intervention. I think they're about out of ammo. They are great at kicking the can down the road, but there will come a time when they lose control. We're now at sooner rather than later.

Edit: That said the predictors that I follow said last Fall that we would hit a new market high, or near-high, this spring. Just before a melt-down begins. Don't be surprised at the current Dow - it may still go higher before it dives.

[68Camaro]

As to physical PM in the event of a sell-off. People with FRN's and abilty to react *might* be able to briefly snatch up some cheap PM. If they can, good on them. I'm not betting my future on it. There will be people dying to sell to cover other losses, but this will be largely paper PM. I believe physical PMs will - if they do ever drop - quickly become so scarce as to be near-impossible to source, regardless of the paper price.

[agmoose]

Based on the seven year cycle, 2001, 2008.....2015 is my guess. But it could certainly happen sooner, and I wouldn't be shocked at all.

[theo]

I think 2015 might be a good time for it; just after the mid-terms. Two more years of new normal, faux prosperity coupled with the intrepid leadership of John Boehner should give the Dems a fair chance to take back the house and at least a few governorships. With complete control of the government our President should be able to respond to the crisis of 2015 decisively with a series of sweeping decrees. We can guess as to what they may be.

However, another reason I think we will see a sell off (if not a major meltdown) this year is the increased regulation and taxes that we'll be seeing this year along with economic problems abroad. I have trouble seeing how most publicly traded corporations will even be able to maintain the illusion of profitability. It feels like it could pop at any time.

[njo.electric]

If it does happen, I don't expect it anytime soon. I would like to sell my stack and rebuy if there are any indications of a meltdown in the future..

[everything]

2015 sounds about right, because that's when they said they would "up" rates, those of us who buy PM's, know we are going the Japanese rate route (rates ain't going anywhere!), but at the same time equities could for some reason begin to wear thin and take it's dip, then champion another rate decrease, or rate "stay", instead of increase, like it's been doing all along anyways. I see this as the only way to continue our spending binges and to keep capital items capitalized. Although it would seem the middle class or consumer spending may falter due to inadequate wage growth, inflation seems to make sure they get all our money out of us eventually. QE, as it keeps hitting the streets, just gets churned back into tax revenue keeping the liquidity "float" alive. I think it's more of a clustercrapshoot than a real economy any more.

If TSHTF again, I wonder if QE will lose it's luster to "save" the markets in a meltdown. I have a penchant of telling people to stack cash, cash out on a good runup and get ready to buy back in big when the market goes south again. I used to think I had no intention on selling my growing silver stack, but I'm starting to think twice these days about getting lucky timing the market and growing that stack instead.

[68Camaro]

The underlying worst problem - the issue most likely to bring things down sooner than later - is the hundreds of trillions in world-wide derivatives liabilties, which are currently ignored when assessing financial health in balance sheets. Why are they ignored, you might ask? Because if they were included virtually every large financial institution would have already been assessed as bankrupt. Imagine the result of that. Sooner or later the curtain will open on the wizard and the issues will be exposed. That will be the start of SHTF (presuming something else doesn't start sooner).

[IdahoCopper]

The underlying worst problem - the issue most likely to bring things down sooner than later - is the hundreds of trillions in world-wide derivatives liabilties, which are currently ignored when assessing financial health in balance sheets. Why are they ignored, you might ask? Because if they were included virtually every large financial institution would have already been assessed as bankrupt. Imagine the result of that. Sooner or later the curtain will open on the wizard and the issues will be exposed. That will be the start of SHTF (presuming something else doesn't start sooner).

When this happens, the meltdown will happen in hours, not days or weeks. The computers will go on a trading frenzy until all the stock markets' breakers trip.

[Sterling Silver]

As to physical PM in the event of a sell-off. People with FRN's and abilty to react *might* be able to briefly snatch up some cheap PM. If they can, good on them. I'm not betting my future on it. There will be people dying to sell to cover other losses, but this will be largely paper PM. I believe physical PMs will - if they do ever drop - quickly become so scarce as to be near-impossible to source, regardless of the paper price.

We need a "like" button here. Until then, I agree totally 68Camaro.

[Coppercrazy]

I remember a year or so back there was talk of a possible break between the market price and the real price of physical precious metals-likewhat I mean is there would be a time where the market price is x but in reality nobody can get it for that price,its really trading much much higher..I think if there was another meltdown,this scenario would play out in the extreme--that is even if PM prices dropped 30 or 40% good luck getting it at that price unless you're lucky enough to find someone just going from the declared market price....I think we've already seen a disconnect between spot and what physical really sells for,just check completed auctions on ebay.Its just not that big of a spread now..

[68Camaro]

Paper silver below $31 this morning, but somehow I don't think we'll see physical follow it much. Premiums are up and rising.

[Engineer]

Paper silver below $31 this morning, but somehow I don't think we'll see physical follow it much. Premiums are up and rising.

This seems like a good time to order from one of the big dealers with automated pricing...GoldMart is under 23x face.

Unfortunately, I'm cash poor at the moment.

[silverflake]

Silver is down of late, gold is down and the S&P is at multiyear highs. Yet, I read where John Q. Public continues to pull money OUT from mutual funds on a net monthly basis! Something is seriously amiss here. Be nimble my friends. Buy physical and keep your stops tight if you're in the market.

Keep Stacking.

[68Camaro]

Again, without relying on this overmuch, a bellweather prediction made last year by a leading predictor who has a great track record (believe it was Celente) was to watch out for two things as a potential portent of a broad market crash to follow, and this year - a broad market top (or near-top) at or near the same time as a major paper PM drop.

[wagsthadog]

Hi all-

Slightly off topic, I agree with 68Camaro that Celente has a great track record, but lately he has gotten so whiny and annoying in interviews that I stick to reading his articles. I love me some Peter Schiff though. He never misses an opportunity to pounce on a guest or topic, and he always tears them apart in a bloody frenzy!

wags

[TwoPenniesEarned]

Central banks and the global financial elite want more PM's. It therefore makes sense that the price will drop. The drops occur with startling regularity and I'm sure that another one is just around the bend. Regular technical analysis will trick a bunch of us into going long and setting algorithms to ride it up, with a stop set at one sigma of drop or whatever, and the plunge will drill down through all those stops, triggering sell orders, which in turn will use our own greed to drive the price even lower. The elite will be waiting at the bottom.

Since Central Bankers still appear to be in charge of things, and since we aren't seeing any reform of government croneyism and insider trading etc. it would be foolhardy to think another plunge is not around the corner.

The game will eventually play itself out. Buy on the dips and keep on stacking