What Does The Coming Global Reset Mean To You? (Part 2)

• What Does The Coming Global Reset Mean To You? (Part 2) 
  by Bill Holter, http://blog.milesfranklin.com/ 
  I assume that a re set of currencies and financial markets are close at hand because the imbalances have gone too far mathematically.  I also have come to the conclusion that the re set will be “imposed” on the U.S. by China because they know the math involved and do not approve of our business practices.  The re set “concept” has gained much yardage over the last year as the imbalances have widened and the thought process has spread.  Personally, I see it as mathematically inevitable.  Some feel that any re set would be triggered by the U.S. others feel that Europe would do it, my personal opinion is that the Chinese have the greatest ability and stand to gain more from it than anyone else.  Even without a “push” or a planned event, I believe that the markets would sooner or later be cued by Mother Nature and force this event, manipulators be damned.
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  That said, what would a “re set” mean to you?  Well, it depends on “who” you are and how or where you have your assets positioned.  First off, the value of your “dollars” will fall against everything.  It will take more dollars to buy food, clothing, housing, transportation etc.  Depending on how severe the devaluation is, the resultant inflation will be the mirror of this.  If you are on a fixed income like a pension or Social Security or what have you, the amount of goods and services that you will be able to afford will be less.  If you have bank balances, these will also have a lowered purchasing power (not to mention probably “bailed in” and lowered balances).  Bonds however will receive a double whammy to financial purgatory.  Their “face amount” will have a lesser buying power with a devalued currency but on top of that, I believe that interest rates will be much higher which will discount the market value.  The above are pretty simple to figure out; it is the rest of the financial world which is a little more difficult to call.
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  In the difficult to call category are stocks, real estate and commodities.  As I mentioned the other day, stocks generally sell off initially and then recover but not enough to regain the loss of buying power in the currency.  Real estate in my opinion will be sold off; I say this because of the massive debt that is attached to it on a worldwide basis.  Couple the debt with higher interest rates and the fact that theoretically the Fed will be precluded from flooding the liquidity gates… and I think you will see very weak real estate prices with the exits clogged by sellers seeking liquidity.  Two other aspects to real estate that will hinder it are “taxes” and thus the ability of governments to tax them out from under the owners… and the lack of liquidity.  Liquidity is “king” during monetary crack ups and real estate “just isn’t it.”
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