Wednesday 22 August 2012

Terminal velocity?.......................from Rico

Skydivers understand "terminal velocity"...in simple terms, that's the speed where you cannot fall any faster than you already are falling.
- The technical explanation is that maximum velocity is reached when drag force equals driving force. They mean the same thing: you cannot fall any faster.

They also understand the concept that "it's not the fall, but the sudden STOP that will kill you."

The "velocity of money" has never been lower in modern US history.
- People are worried, credit is tight, times are hard, and money does not change hands very rapidly. When an economy is very sick, money does not circulate. This was last seen in the 1930's.

"It's not the historic 'slow' velocity of money, but the sudden STOP that will kill the economy."

Big money, Jacob Rothschild, John Paulson, and George Soros are dumping their fiat money for bullion. They are preparing for something....
- And so is Warren Buffet. This should really concern you, since he is saying something loud-and-clear about American municipalities, cities, and states. Warren has just decided to drop his CDS contracts worth ~$8 billion at a P&L cost of hundreds of millions of Dollars.

"It's not that credit protection contracts are unprofitable, but when the municipalities, cities, and states suddenly STOP making their payments it would kill Berkshire Hathaway."




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