What will you do the day after the next market crash?

Chairman Ben S. Bernanke and Secretary of the Treasury Timothy F. Geithner don't know. It is a luxury you can't afford. Get ready before September 9th for the Post Crash Economy.
By: Shalom P. Hamou
 
June 23, 2010 - PRLog -- No one disagrees now: the global economy is in a fragile condition. We will soon discover that governments, central banks and supra national bodies will be powerless when faced with another slow down of economic activity or an outright market collapse.


Diagnostic and Prognostic:

Fiscal Policy:

Also called Keynesian stimulus has found its limit as people and financial markets become wary of further deficits and, more importantly, powerful vested interests oppose it.

Monetary Policy:

That also has reached its limit with short-term interest rates close to zero in every developed economy. Central banks will find it difficult to decrease it lower than what they call the zero lower limity. The so called 'quantitative easing', which have pumped trillions of liquidity that can't find their way into real investment. If they were we would witness some sort of inflation which we don't. It raises the question: What several trillion dollars more will do that 2 trillion dollars didn't do. Will people accept another round of these obviously unjust measures? The last non conventional monetary policy tool, devaluation of the currency, has also already been exhausted.

What can yhey do the Japanese couldn't during the last decade, which is now 17 years old, when faced with a milder local collapse of the economy?

Symptoms:

Long-term yields go down as they have since 1981. At some point they won't reward the bond holder for interest-rate risk, sooner or later investors will prefer cash at 0% interest rate rather than any lon-term investment: it is the crash.

Long-term trend of the Yields of US Treasury Bonds:

http://bigcharts.marketwatch.com/advchart/frames/frames.a...

Short-term trend of the Yields of US Treasury Bonds:

http://bigcharts.marketwatch.com/advchart/frames/frames.a...

I estimate that the fair value of that yield is around 4.60% against 4.09% now. That yield is already below the lowest reached before the Great Recession, which was 4.15%. I believe that any value below 3.90% would be unsustainable and a small shock would make it return to its fair value and investors will retreat from any long-term investments.

Consequences:

Chaos will necessarily follow: social and political turmoil, military adventures, racism and xenophobia... All the evils that the world has already experienced after Black Thursday in 1929.


Prescription:

As credit is the flaw in the ideology that backs that failing economy the single plausible alternative to the Deep Depression is an Adjusted Credit Free, Free Market Economy.

The right to participate is granted to anyone who will have registered the serial number of a €5 euro note and will have signed the participants agreements. That right is linked uniquely to the effective ownership of the note. It is the owner's responsibility that these are authentic and constitute a legal tender.

The right to register a note is strictly limited to one per household.

Registering does not constitutes an obligation to participate but a right to do so at anytime in the future.

Participants Agreement:


    •   Not to steal from another participant.
    •   Not to hurt another participant.
    •   Not to lend money with interest to other participant.
    •   Not to own any long term assets or work
        (except to provide for food or shelter):

------------------> from September 09th, 2010 at 9:00 AM EST.

------------------> till September 17th, 2010 at 4:00 PM EST.

Long-Term Assets:

Long-term assets are anything which is not directed to your own day to day consumption: businesses, Stocks, debt instruments, real estate, and commodities including gold or silver.

The proceeds must be held either in cash or invested in short term treasuries (maturing in less than two years and held with the emitting treasuries. (With Treasury Direct for the US Dollar.)

No holding must be deposited with any bank.

Participation:

We don't expect a strong participation rate before the crash but we already know it will explode as fast as the stock market will dwindle after the catastrophic event. The higher our participation rate before the crash the faster we will be able to implement our economy and limit the extent of the consequences of Chaos.

Our Facebook page:  'The Post Crash Economy' has 233 fans.

http://www.facebook.com/apps/application.php?id=110393935...

Our Facebook event: 'Getting Ready for the Post Crash Economy' has 141 confirmed guests when 183 may be attending.

http://www.facebook.com/event.php?eid=132651053416423

Our Site:              

http://post-crash.com


http://www.youtube.com/watch?v=3u2qRXb4xCU



# # #

Since the spring of 1994 I have been worried by the long-term downward trend of long-term yields, which, I proved, would at some point be such that they will not be sufficient to reward interest rate risk. I soon found out that its root cause was the very existence of credit. As it is discriminatory, it is the main cause of an increasing revenue gap between the rich and the poor. It increases the volume of supply derived by investments and proportionally decreases the demand for good and services. I had ample time to devise an alternative economy that will be fairer, more prosperous and stable: The Adjusted Credit Free, Free Market Economy..
End
Source:Shalom P. Hamou
Email:***@no-w.com Email Verified
Zip:69671
Tags:Economy, Finance, Stock Market, Fiscal Stimulus, Keynes, Monetary Policy, Bernanke, Market Crash, Depression, Economics
Industry:Financial, Banking, Government
Location:Tel Aviv - Tel Aviv - Israel
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