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<DIV><FONT color=#ff0000 face=Arial size=2>As for making a living trading, I
have to wonder -<BR>stock and commodity exchange activity in the 30's all but
dried up resulting<BR>in little or no liquidity.<BR></FONT></DIV>
<DIV><FONT face=Arial><FONT size=2>How true, to make money trading you need
volitility. To get volitility you need buyers and sellers. To get buyers
and sellers you need liquidity. If the liquidity is not there, no buyers,
if no buyers, no sellers, therefore no liquidity, therefore no volitility,
therefore no trading vehicle to make money. If there is a big pop, and
yes, this bubble is the biggest so far so there should be an awful loud bang,
then I would submit that traders, for the most part, will cease to exist until
conditions improve.</FONT></FONT></DIV>
<DIV><FONT face=Arial>Matt</FONT></DIV>
<DIV><FONT face=Arial> </DIV></FONT>
<DIV style="FONT: 10pt arial">----- Original Message -----
<DIV style="BACKGROUND: #e4e4e4; font-color: black"><B>From:</B> <A
href="mailto:eadamy@xxxxxxxxxx"; title=eadamy@xxxxxxxxxx>Earl Adamy</A> </DIV>
<DIV><B>To:</B> <A href="mailto:realtraders@xxxxxxxxxxxx";
title=realtraders@xxxxxxxxxxxx>RealTraders Discussion Group</A> </DIV>
<DIV><B>Sent:</B> Tuesday, October 05, 1999 9:04 AM</DIV>
<DIV><B>Subject:</B> Re: How to protect assets</DIV></DIV>
<DIV><BR></DIV>I have studied this off and on in some detail over the past few
years and my<BR>most educated conclusion is that intermediate to long term US
treasuries<BR>should provide the greatest safety and highest return. This was
true in the<BR>early '30s and it was true more recently in Japan - in both cases
long term<BR>rates were driven to near zero levels by lack of credit demand
and<BR>government efforts to stimulate the economy. Another avenue is
carefully<BR>selected non-US currencies (I would favor stable European
currencies)<BR>however one must not lose sight of the fact that a bursting of
the US bubble<BR>is going to have world-wide consequences because of a) loss of
the world's<BR>most voracious consumers and b) difficulty in actually
repatriating the<BR>debts accumulated by the huge US trade and balance of
payments deficits. The<BR>most likely government action would be to crank up the
printing presses and<BR>print loads of money thereby devaluing all US domestic
and foreign debt and<BR>the US$ - keep in mind that the greatest portion of US
external debt is held<BR>by Japan and China. Historically, precious metals have
not proven to be a<BR>strong hedge during depressions or even major recessions
although price<BR>spikes in gold and gold stocks often precede a major decline
in equities so<BR>they are a good leading indicator of trouble.<BR><BR>The use
of treasuries for hedging the equity markets has been complicated by<BR>the
recent dramatic increases in interest rates resulting in loss of both<BR>income
and principal. Overall, the bursting of the bubble is not a pretty<BR>sight to
contemplate! As for making a living trading, I have to wonder -<BR>stock and
commodity exchange activity in the 30's all but dried up resulting<BR>in little
or no liquidity.<BR><BR>Earl<BR><BR>----- Original Message -----<BR>From: Gary
Fritz <fritz@xxxxxxxx><BR>To:
RealTraders Discussion Group <<A
href="mailto:realtraders@xxxxxxxxxxxx";>realtraders@xxxxxxxxxxxx</A>><BR>Sent:
Tuesday, October 05, 1999 8:52 AM<BR>Subject: How to protect
assets<BR><BR><BR>> Earl wrote:<BR>> > When the bubble does burst, as
it inevitably will, the retirement<BR>> > savings and pension plans of at
least two generations will be<BR>> > placed in jeopardy. Not only are
these generations at risk of<BR>> > losing their financial independence,
but government tax coffers<BR>> > shorn of the stock market tax bonanza
will be incapable of<BR>> > providing a safety net. Further, US workers
will wake up to find<BR>> > that few are in a position to support the huge
US service economy<BR>> > and that there are few manufacturing jobs
remaining. In short, what<BR>> > happened in Japan in 1989 won't begin to
compare to what will<BR>> > happen in the US when the bubble
bursts.<BR>><BR>> A very sobering prospect, indeed.<BR>><BR>> I have
wondered about the best way to protect one's assets against<BR>> this kind of
scenario. I don't have any idea how soon or how badly<BR>> it's going
to blow, but I agree with Earl that some kind of disaster<BR>> is
inevitable.<BR>><BR>> As traders, it's part of our job to make sure we
protect our assets.<BR>> It does us little good to make lots of dollars in
the market if those<BR>> dollars are worthless.<BR>><BR>> I think this
would be a good topic of discussion. It's probably of<BR>> most
interest to U.S. traders, since it's our currency and our<BR>> economy that
have been so mismanaged and are likely to fall. But<BR>> other
countries are likely to suffer from the collapse as well, so<BR>> all of us
may benefit from the ideas.<BR>><BR>> So: how should a trader
protect his assets and his financial future?<BR>><BR>> I think we're
fortunate in that we should be able to continue to earn<BR>> a living.
No one is going to lay us off, and our employers will not<BR>> go
bankrupt. (I hope, anyway, since our employers is us. :-) As<BR>>
long as we can adjust our trading style to the new financial<BR>> conditions
we *should* be able to continue to pay the bills. We<BR>> should
probably be careful not to have too much money tied up at any<BR>> one
brokerage, since I imagine some of them are going to crack up<BR>> when the
fertilizer hits the fan.<BR>><BR>> But what about our savings, our
retirement plans, etc? Do we buy a<BR>> stash of Krugerrands and gold
eagles and bury them in the garden? Do<BR>> we have to move our funds
into SF-denominated Swiss accounts to<BR>> protect them from a dollar
debacle? How do we protect their value?<BR>><BR>> And what of
non-traders? My parents are in their 70's and asked me<BR>> just this
weekend how they should protect their modest retirement<BR>> funds. I
wasn't quite sure what to tell them but said I would think<BR>> about
it. Any suggestions?<BR>> <BR>> Thanks,<BR>>
Gary<BR>><BR><BR></BODY></HTML>
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