Economics

I don't know why this sub-prime, financial crisis disaster is continuing to be spread out. The US economy is bankrupt and, for some reason, the people managing this at government and private investor level are terrified to admit it. To me, they are prolonging the agony.

Each time a Bear Sterns (or in the UK, a Northern Rock) go cap in hand to the government is a clear indicator that there is no money. Modern economics are built on confidence and inflated economic statistics to get everyone to continue playing the game but ultimately there is a boom and bust cycle for a rich to poor system to work. This requires a big financial clearout once in a while where the smart investors have long since secured and hidden their wealth while the greedy people keep playing in an ever tighter game with little latitude to spin their old tricks.

At the end of the day the whole economy is a game played with other peoples money where, in an abstract way, you have to go to these people to get the money to play. That is banks. But when they cannot 'find' the money. The bubble bursts.

I think a 40% cut in the value of the US Economy is on the cards - expect the Dow Jones to be around 8,000 by the end of the year - gold at 1400 and oil above $150.. i'll date stamp that now!