preso upside npv 1655 per share, page-34

re: more signs of resources megaboom The M3 which has gone into hiding last coupla years so no-one can point the finger, is reportedly still running at 10% pa ......... thats monetary inflation ....... and necessary to try and keep the massively debt laden system alive. Been up to as high as 35% pa.

The greatest fear is debt default which triggers some kinda domino in the 350 TRILLION buck derivatives markets this monetary fiasco since the 1971 decoupling from the gold standard has been allowed to evolve. Whats the US GDP? 12 trillion ?

The yanks couldnt give a shiiite about the pleb housing market apart from the effects on consumer spending adding to the OVERT credibility of the USDX. The REAL worry is a number of hedge funds going down same time .......... cos who will be able to control? One at a time is kinda acceptable given notice cos they only print more and give time for another to buy it out and keep the system going.

I have no faith in the long term value of paper money. Yet in a debt-default induced asset deflation + paper devaluation commodity price inflation scenario, which I strongly believe we are now IN and evolving into further, PAPER CASH has its value in early stages cos u can pick up the defaulted assets at cents in the dollar ....... ASSUMING CONTROL is NOT LOST in an instant by some derivatives market meltdown ........ which from here on is a REAL Damoclean sword hanging by the slimmest of threads IMO.

If we retain CONTROL of global financial system, what we will see is an attempt to manage the USD devaluation so the massive debt in hand is devalued with it .... pretty clever if u can get away with it under control.

Back in 1971, this was basically the underlying long term motive IMO. BUT they didnt figure on such a MASSIVE derivatives market size evolving outa the liquidity generated and in the hands of inexperienced young-guns with no precent to learn from.

Hence the "cash is king, debt is death" chant of the GORM for deflation (recession,depression, property market devaluation, all asset class devaluation)

But in the latter case, cash is worthless even if u cant generate it as u r deafulting yr debts anyway ........ So what are we left with when all liabilities are met?

If we are LUCKY or have managed PROPERLY / CONSERVATIVELY, we are left with the paid -off roof over our heads ....... some CLEAR title in a resources supermarket which when the dust settles is still REAL and valuable to whatever extent ........ thats why I LOVE the U-part cos they wont want the lights to shut down ......... some gold / silver etc which historically has been the insurance policy retaining some kinda purchaising power during crises?

So we HOPE for controlled deflation keeping its nose in front of the latter ......... deflationery depression is EASY to control ........ stagflation combo is hard ........ hyperinflation is impossible ! Everyone is a loser no matter what in real terms BUT relatively safety is what we look for and try to prepare for.

Prepare for the worst and hope for the best is GORM strategy. But you MUST keep yr debt to manageable levels based an estimate of worse case scenario of u losing yr income generating abaility. I HATE debt at these times cos aint young enough to recover from any crash which wipes me out ......... and Ive been thru one financial crisis just like that, tho it was personal :)

Stock market crashes I have learned to not only navigate thru but ultimately take advantage of using basic GORM strategies which I keep touting in here. Ive experienced 3 such crashes since the early 70s and come out stronger after each. Nothing changes other than the magnitude ....... but they never had such a massive a Damoclean derivatives threatening before.

Remember LTCM in 1997 ........ only 6 billion bucks loss controlling 1 trillion bucks derivatives? DJIA fell from 9300 to 7600 or so as a direct result from memory. Thats was only a LITTLE ONE.

So yeah, if they dont keep the printing presses running hot even insecret, how else?

Personal opinion only and thats how I play it. Right now the education books on these things are being re-written so we gotta stay nimble and stay alert for surprises. Meanwhile 2007 seems like a boomlet in resources and thats why u gotta have cash on the side at all times ...... so u can be nimble enough to take advantage.

IMBOOC

Hope thats all kinda clear to you. Its clear and simple in in my mind and works for ME ...... whether by sheer luck or with Zeus's guidance.