Sanrith Descartes
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Welp, that answers that. Hello inflation, my old friend. Glad to see you will be with us for a while yet.
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Investing General Discussion
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Flobee
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It was inevitable, this was always going to end with hyperinflation. I'm sure we'll seesaw back and forth a few more times, but there is no political will to tighten to the degree required. Even if there was the markets are so overextended they would collapse anyway. No win situation... How do you position in a currency collapse? Everyone should be seriously considering that situation.
USD will be the last to go, but it will go too. My 2c
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Gravel
Mr. Poopybutthole
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In a currency collapse you say fuck the economy, we save the currency at all costs. Been saying this for months now.
If the currency goes, the economy goes with it anyway. Trying to save the economy to the detriment of the currency is retarded.
If the currency goes, the economy goes with it anyway. Trying to save the economy to the detriment of the currency is retarded.
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Big Phoenix
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Nothing.
If Congress wasnt retarded theyd be repealing every anti business legislation there is.
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Well if you are lucky enough to be the few borrowing at 0% for the last decade of if you are a hook nosed goblin on the business end of the money printer then you prepare by buying up all hard assets the world has to offer, which anyone who has been paying attention knows they have been. Everyone else will be left with nothing but worthless paper.
UK is also a massively mismanaged state, no industry to speak of, no talent beyond finance. The GBP is the only thing between them and being Greece. This is a country that wasn’t even doing well in the good times in like 2016-19.
The US is in far better shape. Dominoes will fall here but I still doubt it makes it all the way to taking out the dollar
Flobee
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While I certainly agree that USD is in the best condition of any sovereign currency, thus will last the longest, I don't think it will survive in its current state. We're moving towards a paradigm shift in international FX and value storage. As far as I'm aware there isn't a single country in the world with a strong balance sheet because the entire economy is based on paper promises and since someone can print those promises when needed... they inevitably do. Regardless of anything else he's saying or doing, Putin is correct that we're heading into a world where hard assets will be the basis for trade, not paper promises.
We're just watching that process play out in slow motion. BRICS will be the first attempt to replace USD/SWIFT but I don't think that's where we land in the end. We may still be years away from this hitting the USD, but its coming. Current system is built on trust, something that is no longer abundant. If I'm correct that we're moving toward a monetary paradigm shift, where do you think you can store value to ride it out? Worth thinking about. Maybe you give that a 3% chance of happening... well perhaps you should allocate 3% of your assets somewhere to hedge that possibility?
Also, CBDC will be the proposed solution to this from ECB/FED. Just wait and see
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Aldarion
Egg Nazi
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Are the prices of ETFs based only on the price of the underlying asset (index or commodity), only on buying & selling of the ETF itself, or both?
The reason I ask is that it seems to me ETFs don't perfectly track the performance of the assets they're based on, in some cases just a time lag but in some cases a difference in magnitude too (not talking about 3x leveraged or anything).
So I'm just trying to understand why that is.
The reason I ask is that it seems to me ETFs don't perfectly track the performance of the assets they're based on, in some cases just a time lag but in some cases a difference in magnitude too (not talking about 3x leveraged or anything).
So I'm just trying to understand why that is.
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The biggest thing which will "protect" the USD is the fact that being the default reserve currency right now makes it the unstable card that the rest of the global financial house of cards is pretty much built on top of. USD goes the whole of the western world's financial system collapses. It's one reason I think the real "weapon of mass destruction" the US faces is BRICS. If they get their proverbial shit together to the point of having an economic bloc build which doesn't rely on USD, SWIFT, and the western hegemony for it's trade/finance structure then they represent around 4B people in the world whereas the "western world" only represents around 1B. At that point everything the US has been doing to sustain itself becomes essentially unsustainable moving forward.
It's possibly the ultimate capitalistic "Don't like it, build your own" game playing out on a geopolitical scale.
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My understanding is that the ETFs operate on their own share prices. But this is also not my strongest suit and probably something for the likes of
Sanrith Descartes
to be able to explain far better.The dollar isn’t getting replaced without a world war. What kind of hedge do you take for that?
the idea that any country would agree to BRICS being the new reserve currency is crazy. Those countries are all even bigger unreliable shitshows than the US. The US has faced a multi polar world before and been fine,
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Blazin
Creative Title
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I'm surprised the market moved up on this news, it's nothing other than a very temporary bandaid. It just creates a fake false demand for their currency for a few weeks. Tightening into a weak economy sucks, but they have to play catch up with the Fed or the dollar will just keep steam rolling them. THere is no choice, they have to tighten, and if they did the pound vs the dollar would improve. The recession is coming they can't stop it, and as gavel said they are picking the worse of two options and letting their currency go along with it.
I think the idea of market participants is that is a hint that the Fed will also cave to save them, if it becomes evident that they won't, then response will become decidedly negative. It will have the exact opposite effect and will crater the pound.
I think the idea of market participants is that is a hint that the Fed will also cave to save them, if it becomes evident that they won't, then response will become decidedly negative. It will have the exact opposite effect and will crater the pound.
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OU Ariakas
Diet Dr. Pepper Enjoyer
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My guy, how many times do you have to be told that the current system is not built on trust, it is build on a bribe. Use the US dollar as your reserve currency or be excluded from global trade. In the world you are describing the US becomes the biggest version of the mafia in the history.
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Fogel
Mr. Poopybutthole
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We're also the only country that can unilaterally assure that all the global trade lanes stay open. If any other country wants to take their ball and go home, the world will just laugh while we send in gun boat diplomacy. If we collapse or say fuck it, you all are on your own, then shit will get real.
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The problem the market has is market optimism and rallies based on fed easing make it easier for JP to keep fighting inflation and not go into QE mode because why do that if the markets are rallying anyway.
I consider these to all be bull traps until we really see either something break in employment or banking liquidity or inflation shows real signs of dropping. Otherwise I don’t think JP will stop tightening.
nordstream was also terrible news for Europe and the market did nothing. Just remember this is about wealth destruction and you don’t get that without lots of bull traps and slaughters.
Sanrith Descartes
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Remember, ammo is the only asset class guaranteed to go up in value over time.
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Sanrith Descartes
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If you look at a detailed quote of an ETF it will show its NAV and if it is trading at/above/below.l that NAV. Markets arent perfect so you will occasionally find ETFs actually trading at a discount to NAV.
With ETFs they are computer controlled to match the basket if holding s to the underlying index. Like eveything sometimes people/algos act in a non-rational manner and this can create the situations of trading above/below NAV. Massive volatility im sure can cause it as well as the computers and trades try to keep up.
Sanrith Descartes
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I think markets are moving thinking this BOE capitulation will provide Janet Powell cover to ease. Its insane of course. But so is NKLA having a market cap of over $1 billion.