Seems like some Australians have heard the peak oil message
http://youtu.be/Q_xI_8aLjds
And just to confound my expectations - we have an SPX breakout this morning. Best not to stand in the path of the oncoming train. Move higher will be fueled by short covering…
Hi Colleen,
Good discussion, and maybe I can expand a bit more.
To me it all boils down to a matter of what is valuable, i.e. what is wealth?
In short, the current paradigm (to be clear, I'm not invoking a shadowy group, but rather the corrupt group of government officials and corporate finance cartels who are openly maintaining a system of currency that transfers wealth and favors a select few at the expense of many, and no Hugh, this is not capitalism, it is thuggery) is playing a Jedi mind trick on the masses.
They are convincing a large number of folks to exchange true wealth for fake wealth, maybe not value-less wealth, but exchange their hard-earned labor at a big sale price- should we pay police $35K a year and Wall Street commodities traders $2.5 million a year? Who is providing valuable service and who is not? Who is creating true wealth, the farmer or the Hedge fund manager?
Yes, we need a few bankers, it can be a noble and helpful profession. We don't need 40% of our economy involving moving unbacked "dollars" around in a circular loop.
The alternative is don't let the parasites play Jedi mind tricks. Yes you have to live in the present fiat currency system, and you will get paid in this fiat money, but you don't have to exchange your hard work and value creation for worthless dollars or anything that is mere paper and denominated in dollars.
The Arch Druid, John Micheal Greer, who I believe was a guest of Chris' a few moons ago, gave very cogent descriptions of the different types of value:
"I’m referring, of course, to the cavalier way in which the concept of money was treated in last week’s post. In terms of mainstream economics, it’s nonsense to talk about wealth or value without discussing how those things are reflected in some form of pricing mechanism – that is, how they’re measured in money. The widely held belief that the wealth produced by nature is valueless until it’s transformed into something else by human labor, in fact, bases itself largely on the fact that nobody has to pay the nonhuman world for that wealth, and so figuring out its price poses a major challenge – not insoluble, but significant enough that few economists have been willing to take it up.
Since Adam Smith launched modern economics in 1776 with The Wealth of Nations, unresolved disputes over the nature of money have formed a fault line running straight through the heartland of economic thought. Some economists – these days, the majority – treat wealth and money as interchangeable concepts. Others – the minority nowadays – draw a sharp distinction between them. Those who accept the identity of money and wealth seem most often to think of the rules governing money as something akin to laws of nature, untainted by human purposes and agendas; those who draw a distinction between them tend to see those rules as social constructs that benefit some people at the expense of others.
Longtime readers of The Archdruid Report will probably have little trouble guessing where along this spectrum of debate I can be found. It’s simple cultural chauvinism to insist that the particular, and peculiar, form of money used in contemporary Western societies is the only one that matters. Over the span of human history, money is a fairly late invention, and until very recently it played only a small part in the lives of most people even in the societies that used it; until the eighteenth century, even in the Western world, a majority of all goods and services were produced and exchanged within the household economy, or in local customary economies that made no use of money, and only the well off could expect to handle money on a daily basis."
[Nature, Wealth, and Money, The Archdruid Report, http://thearchdruidreport.blogspot.com/2009/07/nature-wealth-and-money.html]
Chris, and others, have laid out in this blog entry a very clear way some strategies on how to make fiat currency with shorting, trading stops and strategies, and it's all good. Good for Chris, and he is a very sharp guy who clearly wants to make fiat dollars out of the current paradigm.
All I am saying is that, whether you follow Chris' excellent advice and try to make extra fiat dollars, or take a more risk-averse approach where you stay out of dollar-denominated markets, IMHO, you better exchange those dollars quickly for things of use value and real value like gold, land, tools, solar panels, skills education, etc.
I am concerned that sooner rather than later, those dollars will no longer have any exchange value as they do now, as they go the way of all unbacked fiat currencies.
Thanks for an interesting discussion,
H
I wrestled with what "backing" for a currency is for a long time. Certainly in the old days, 35 dollars = one ounce of gold. The currency had gold backing. This was easy to understand.But it turns out, you don't really need any explicit backing for a currency to be valuable. (The USD is an "proof by existence" of this statement). Currency is valuable at a core level because of the things you can buy with it, assuming an artificial scarcity mechanism exists to limit currency creation.
Thought Experiment:
If you live in the US, and you have a $100, it has value because you can go to the corner store and buy a very nice bottle of wine with it.
But now let's move you to Europe. You have that same $100 bill. It still has value - through an extended trade process, you could get that same bottle of wine, minus transportation costs.
Then imagine that, overnight, all the $100 bills were suddenly no longer accepted as legal tender within the borders of the US. Most likely, regardless of where you are, that $100 bill would not be able to get you any wine at all.
So at its core, I claim that your $100 bill currently has value because people know it can eventually be exchanged for valuable stuff in the US.
All the discussions about "unbacked fiat currency" misses this important subtety. In my opinion, we don't really have a fiat currency. We have an economy/stuff-backed currency. Unlike the old days, the currency isn't backed by a fixed amount of physical amount of gold, the sum total of all currency in existence is backed by the entire collection of wealth within the borders of the United States. As that wealth varies, or as the supply of currency varies, so does the perceived value of the USD. This yields the equation:
USD Value = Total US Wealth / Total Credit & Currency
This says if Total Wealth increases while Currency remains fixed, USD has more perceived value. If Currency increases while Total Wealth remains largely unchanged, USD has less perceived value.
That's my (simplified) theory anyway. There's the safe-haven effects which distort things, and changes in confidence, perceptions, and expectations…but at its core, I think this equation tends to dominate over the long haul.
Gold-backing a currency is a useful mechanism that limits the creation of money & credit. However, any other system which also limited the creation of money and credit would work equally well. Ultimately, every currency is only backed by the stuff you can buy with it - be it a gold-backed currency, or our current stuff-backed USD.
Surely all fiat currencies are unbacked (forced upon us through bankruptcy, and human resources are now the surety for these credit loans through government bonds, ie bondage into slavery or the birth certificate.Bankers credit in the form of interest bearing promissory notes ie debt. Since all currency in circulation is loaned into existence, then any notes that we have in our possession count as someone else debt.
We don't buy anything with these IOUs, we can only discharge our liabilities (the west is bankrupt so there is no money only credit) in return for goods or services that come with no property rights, as our ability to pay was removed when the money (gold and silver) disappeared.
Just my tuppence worth.
Surely all fiat currencies are unbacked (forced upon us through bankruptcy, and human resources are now the surety for these credit loans through government bonds, ie bondage into slavery or the birth certificate.Bankers credit in the form of interest bearing promissory notes ie debt. Since all currency in circulation is loaned into existence, then any notes that we have in our possession count as someone else debt.
We don't buy anything with these IOUs, we can only discharge our liabilities (the west is bankrupt so there is no money only credit) in return for goods or services that come with no property rights, as our ability to pay was removed when the money (gold and silver) disappeared.
Just my tuppence worth.
Surely all fiat currencies are unbacked (forced upon us through bankruptcy, and human resources are now the surety for these credit loans through government bonds, ie bondage into slavery or the birth certificate.Surely I have no idea what you're talking about.
We don't buy anything with these IOUs, we can only discharge our liabilities (the west is bankrupt so there is no money only credit) in return for goods or services that come with no property rights, as our ability to pay was removed when the money (gold and silver) disappeared.Well speak for yourself. I buy stuff all the time with these "IOUs". And if you have any left over you don't want, please send them to me. I find them pretty useful.
Thanks for this post. Its a question I've wrestled with myself. Seems to me, no matter how you slice it, all currency is fiat in that it is worth precisely what it will buy. And, that is dependent on the whims of people in the final analysis.The value of currency is, of course, measured in different ways. The dxy places the value of the dollar according to a basket of other currencies, themselves fiat.
[quote]
Euro (EUR), 57.6% weight
Japanese yen (JPY) 13.6% weight
Pound sterling (GBP), 11.9% weight
Canadian dollar (CAD), 9.1% weight
Swedish krona (SEK), 4.2% weight
Swiss franc (CHF) 3.6% weight[/quote]
I don't find that very reassuring. I have to disagree with your formula for valuing the usd because there doesn't seem to be any correlation between our cumulative wealth and what the usd will buy. For instance, yesterday the dxy fell by .63%.
http://www.marketwatch.com/investing/index/dxy
Did our national wealth suddenly increase or decrease by .63%? I don't think so. We can theoretically just buy less or more of it with a usd. In fact, though, we can probably buy the same stuff we could yesterday.
Next, the Fed is creating usds/debt at a pace of $65B a month currently, down from $85B a month for the last few years. Has all of that "printing" changed the value of the dollar much? Measured by the dxy it is right about where it was in mid 2009 when Bernanke was cranking up the presses. Of course there have been fluctuations in between, but has any of that reflected the real value of the usd? I doubt it.
The same can be said for the value of gold. It was valued at $35/ounce for 30 some years until 1971. It is now $1,300 and something and has fluctuated wildly in the interim. Did any of that have anything to do with real value? How about bitcoin?
http://bitcoincharts.com/charts/bitstampUSD#tgSzm1g10zm2g25zv
Link to this chart · Larger chart
Use this link to bookmark or share this chart. Select "Custom Time" to create a permanent link to a specific date.
Does that look stable?
Ultimately, I think that is as much as can be said for the value of any currency at any time.
Thanks for the conversation.
Doug
I do appreciate H, Kug's and Dave's input here because I understand that what you are saying is sincere through reflection and hard work. Not to denigrate anyone else, I just felt comfortable when reading your words.
I internalize only after processing what I see, the daily pulse of transactions and allow a good bit of time to pass before I have my instinctive trends (somewhat formalized). The instinctive part is critical for me as I have seen over my lifetime trends that just repeat, and repeat again. It is why the recent podcast about how humans are just hot wired for bubbles made so much sense to me. This requires too that I read a great deal and apply it in the world I live. It is why (for now) all I can see is a battered system that has been on the brink of calamity only to be held up by confidence, hope, dollars, sometimes imaginary dollars, and imaginary dollars falls into the rhelm of the baffle them with BS. Still, baffle them with BS has value, right? So much of that goes on without a dollar of printing. I/we have to wade through that too. Markets move on whether a word is an adverb or adjective.
The dollars I speak of is whatever dollar you use.
I look at the fundamentals and historical data. I do this because I do believe we are hot wired and some things are just going to happen, and is exposed at some point to reality, and that's where history can be revisited and conclusions drawn. It is at this point in the data stream that the real meets the unreal, gets washed and battered before everything that matters is left standing. Supply and Demand, the strongest fundamental of them all and will always be most important. Where the world comes to grip with the 100 year cycle, give or take a few years is yet to be determined still, during this 100 years cycle. "Is this time Different" (NOPE).
I am really into the demographics part of the equation because older people do things a certain way. I see this, relate to it, and can easily understand the truth just by knowing how subsets of the human economy move from independence to dependence.
If we just look at the Baby Boomers we see approximately 78.9 million people at various stages of this 20 year grouping and will easily tell what will most likely be what they will demand at certain stages. Same with the new born to 20 crowd (Mr. Dent who appears on the front page here at PP does a wonderful job of setting this concept up for a quick catch up if you haven't followed demographic trends before).
Having already lived through 3 aging cycles I can relate very clearly with each subset. I raised the new born to 20 so understand that. Lived through and stayed abreast of the second cycle through my kids. Just arrived at the end of the next grouping, the 40 to 60 and have a pretty good idea of what I will be doing for the next 20 years with my peers. Really valuable to me is where we all came from, what we did and our experiences. Just critiquing myself I can tell you I will have to pay the piper right along with those I made mischief with. The added bonus is I have grand children so they are my love factor, important for my continued life cycle as they relieve stress which everyone at my age understands is a huge component to whether I need to save more cash for an added 10 years more of life because of the joy they bring me/us.
Now tying all this back to the economy and what money means to me. I believe that money, be it gold, dollars or anything of value is backed by Confidence and Hope. It's what drives my desires to wait or spend on any particular item. This could be an exchange in barter, dollars or any item of value that I have that someone else wants, and visa versus (sp). It is the value I put on that item and the "I must have that now factor" which gets me to negotiate with my stores of wealth. The decision to use my wealth is my confidence in the system. Is the economy going to correct then I will wait and buy cheaper. Is the economy healthy and if so it is only going to get more expensive as more dollars chase after goods or services, so buy now. Confidence and Hope then, very important to me, and has value also, and is why I do all of this in the first place. My labors for understanding (perceived (?).
I am not married to any values per se but can readily see that I/we are conditioned and have no choice really to use what the system has engineered for the ease of exchange which is dollar bills (pick your currency, doesn't matter). Now, I would gladly pay you in gold if you have something I want but I'll pay you in dollars and you'll have to go get the gold yourself because it is such a hassle to do on my own. I would have to measure up the agreed upon sum and now I see difficulty If this is unacceptable to you then I pass on the agreement to purchase. I would do this figuring I can get a less hassled exchange with someone else. Some things I could recognize as too important to negotiate though and would do as asked. My loved ones life, extremes like this would move me to action.
Dollars has garnered a tremendous amount of confidence and is where most everyone feels safe.
The dollar (any) has intrinsic value too, Hope. It is nationalistic, represents a long history of struggles and gain and here we are, we made it through. Whew!
It is generational and is passed down. A great gifting that everyone appreciates. Your legacy, and is free to the gifted person. It is the essence of a Man or Woman's life of hard work and accomplishment. The measuring stick. Things more important are character, sound advice, the gifting of love to those you love and being kind and concerned are values greater than wealth but, still, free cash is always exciting. Besides, you are dead so being a good person is passed along down through your kids (hopefully). Cash though is for the living and that usually has a terrific side effect.
Take this away and unbridled fear is soon to follow. The fabric frays and streets are filled with the discontented fighting for ideals. It is why I believe that as Reserve Currency and its effect in every corner of the world will take a tremendous amount of effort and negotiation to change this system. This just feels like a long way off. Given that just about everyone believes the Euro is a flawed currency and was doomed to fail from the beginning then I believe the world will still take up the dollar to protect and keep the engines at least sputtering along until change is made, and my strongest reason is that people are adverse to change.
I read all the stories on China and the vast gold reserves. I see this as potentially a new reserve currency. What I don't see is when? We can all guess and make prediction but so much time and negotiation will need to be done amicably before that is dropped into the worlds lap. Why? So much Debt and the world is really very insecure, and will be for many years that to drop that into the world would cause undo hardships that could have at least been measured and slowly implemented. It will be a Great Depression, world wide, before that emergency measure is enacted are just a huge guess on my part.
Bottom line, everything is a medium of exchange. Its just that the dollar as it sits in the world today is most familiar, most respected, most liquid, and to my knowledge has always given me fair value with every dollar spent. I am sure this is because "I want that now", and was able to negotiate its price and took it home. 99.99999% of the time using US dollar bills, or checks, or debit card.
Finally, the only issue of value to me right now is DEBT. World wide, and is why every Central Banker is throwing everything at the system now. Simply, we have too much, and this means default, and default is destructive by definition, and Deflationary by definition. So it isn't really a stretch to think that all the Central Banks efforts since 2008 has only led to more Debt instead of letting the great unwind happen. It will unwind, no doubts here, To give some added gasoline to the fire, China went from 9 Trillion to 24 Trillion in added debt in just the last 5 years (since 2008). Based on collateral. If this collateral is in any way impaired (it most certainly is: Housing (?) then 2008 will be a do over at some point going forward and may result in lower lows but it will NOT go to higher highs, that is something I will bet on in the not to distant future and I will do this with US dollars. Well, it very well could go to higher highs but the risk to the upside for minimal gains that will be lost in the great unwind, and quick as the HFT sell isn't worth it. IMHO
Note: I am aware of the flip sides to any thought experiment so I am trying to be real for the next 10 year time frame with myself, only myself, and anticipate that I will need to be flexible. Believe me when I say this that since I have signed up here at PP you people have helped me shape or refine many of my thoughts. As so many have at other Blog sites. Zerohedge is invaluable for instance. I will concede I have no idea what the future holds and are not looking to upset anyone's own thought process. I respect all of your determinations. Just to even attempt to make any guess at the future is heroic. I do respect the efforts it takes to make determination and then live ones own life accordingly. This isn't a game, but I take to it, and is a bunch of guesses and I wish everyone success in just feeding and taking care of loved ones. Succeed at this and you have all the wealth in the world.
C
Why? People with dough got no where else to go!
[quote=davefairtex]1) Option #1: the ETF "SH" - a non-leveraged reverse bet on the S&P 500. It has some unfortunate counterparty risk (all the TBTF banks are taking the other side of the trade via "swaps" - so if one of those banks fails, that portion of your bet will be defaulted on) but short of a bank meltdown, SH should be great in either an IRA or a regular taxable account.
http://www.proshares.com/funds/sh_daily_holdings.html
So SH is both a bet against the equity market, and a bet FOR the TBTF banks. Its important to know who is on the hook to pay off your bets.
2) Option #2: go short the "SPY" ETF. It is holding actual stocks, so you aren't exposed to the TBTFs. But you can't short in an IRA, if you are so inclined, and you also have to have your trading account set up for short sales. And you have to pay the dividend.
http://portfolios.morningstar.com/fund/holdings?&t=ARCX:SPY
3) Option #3: sell short one or more ES contract (e-mini futures) which exposes you to $50 per 1 point of SPX change. Market drops 40 SPX points = $2000 profit. but…those are too exciting for most people: just one contract gives you a $92,500 exposure to the S&P 500. One virtue of them is, they're traded 24 hours a day.
4) Option #4: buy puts. They're insurance - however they decay in value over time, plus their price varies based on how volatile the market is perceived to be. They can result in a big payoff for a small investment, but most of the time they expire worthless, so you end up losing 100% if you don't bail out quickly when you're wrong. So unless you understand options, and/or you are dead certain you are right - and you'll be right within a specific timeframe - it is probably best to avoid them.
[/quote]
Option 5 - Don't play this game
It simply amazes me that intelligent people fall prey to this ploy again and again. Haven't you all seen the evidence, again and again, that this is a sucker's game? Vampires need blood. Why do you want the vampires to thrive by giving them more blood? Why not deprive them of your blood? If you're a retail investor, stay out. If you're dumb money, stay out. You will never effectively compete against the big boys, especially in these times. Unless you have inside information or have some level of control or influence, the odds are stacked against you. Like a casino though, those who (temporarily) win will crow about their winning, drawing in those who lose. Ignore the squawking crows who are, not infrequently, simply screen staring dweebs scrounging for scraps among the financial detritus. The best suggestion is STAY OUT OF THE CASINO!
Open a business. Open two businesses. Open three businesses. And really think about those businesses. When another thread here mentioned business possibilities or bemoaned the lack of business opportunities, I was struck by the lack of creativity that was displayed. There are ALWAYS business opportunities, whether an economy is growing, in steady state, or collapsing. The point is to be sensitive enough, quick enough, agile enough, and responsive enough to capitalize (there's that dirty word, so some) upon the opportunities presented and then be ready to move on.
Why own a share of a business that you have no control over? Why not own 100% of a business that you control, that you make or break? But for pete's sake, don't open some dimwit business that doesn't have a snowball's chance in hell of surviving just because you happen to like what that business is about. I've seen that happen all too often. Go into it with open eyes and a discerning, thinking, creative mind. Hard work alone doesn't cut it but hard work you will do if you want to succeed.
Am I going to tell you the business ideas I've personally implemented? No. Why should I? I did that at one time in the past but never again for a variety of reasons. Does that seem somehow "not nice"? Well think about how many of you have regularly read Dave Fairtex's information or Tyler Durden's information and yet you know nothing about them. Most of the time the information is very good. But sometimes it isn't. Have you recognized the difference? Do you realize the advantages that can be obtained when the occasional bit of inaccurate information is passed off as accurate and the mass recipients of it act accordingly.
Here's a hint about one strategy though. You will be copied after being successful but by that time you will already be moving on to the next idea. Americans in particular love newness. They will go after almost anything that is new … for a while. Until they get bored and move on to their next novelty/attention fix. Build the business quickly, building on the newness momentum and then sell it at its peak. Hard to do, just like selling a stock when it's skyrocketing is hard to do. But long standing, stable, single focus businesses will become harder and harder to profitably sustain. Flexibility is the key. Proactive flexibility will serve you better than ex post facto, reactive resilience.
If you looked at the genesis of the thread it wasn't, "SHOULD I be shorting the market" it was "HOW do I short the market." Given that - you think I should have answered, "I know better than you - don't play!" and its corollary answer "I'm not going to tell you!"I had (basically) two alternatives.
Option #1: Don't tell the original poster how to play, don't educate anyone, and say "oh my no, you couldn't possibly do well, I know what's better for you, just stay out of the game" and keep them in the dark.
Option #2: Educate and enable someone, giving them some simple rules that if followed will keep them out of 90% of the trouble they will run into, and then hope for the best.
Given this is a site whose main philosophies are "education", "understanding the world through data" right alongside "trust yourself" … my instinct was to provide the information rather than holding it back "for their own protection."
Trading is hard, mostly because of human emotion: the desire to be right, the fear of missing out, the greed that springs to life when you see everyone else making easy money. Its the 2003-2007 housing bubble AND 2008-2009 crash, but in real time played out over hours and days rather than years.
The thing is, mostly I think you are right. People are generally better off doing stuff they understand, that is close to home, over which they can exercise a fair degree of control. But who am I to interfere with someone else's free will by keeping information from them?
Dave,
So, going along with your line of reasoning, if people asked you the best way of killing themselves, you would educate them, give them data, and tell them to trust themselves, since they're probably going to do it anyway and you feel morally obligated to inform them and not interfere with their free will?
Because that's what most of them will do … kill themselves, financially.
Dave is handling himself here exactly as he should.PeakProsperity.com is a place for respectful idea exchange on topics relating to the Three Es (please familiarize yourself with our civility guidelines). We're all trying to gather facts and perspective before making our own individual minds about what to do.
Bullying people into silence – through strawman hyperboles or otherwise – is not welcome here.
So, going along with your line of reasoning, if people asked you the best way of killing themselves, you would educate them, give them data, and tell them to trust themselves, since they're probably going to do it anyway and you feel morally obligated to inform them and not interfere with their free will?So equating shorting the stock market with death is a false analogy. You can come back from a trade loss. I know, I have done exactly that. What's more, you can actually learn from the experience, if you really want to. I have done that also. Experience is a great teacher, and often its the only teacher that some people will listen to. My intent is to arm a curious person with information, in the hopes that the loss will happen less often, and the learning will be more rapid. On the other hand, death happens exactly once, and from that state, there is no coming back - at least for the vast majority of us. And since there is no coming back, there is no learning that can occur, at least no learning that can apply to the current lifetime. So in answer to your (rhetorical) question, because the two things are strikingly different - chalk and cheese as it were - I would treat them differently. At this rate, I'm guessing a reference to Hitler is next. http://en.wikipedia.org/wiki/Godwin's_law
understand that you and me are the collateral for all the IOUs in circulation. Forced by coercion to work for and to pay our way in life with valueless paper of which the main purpose is the theft of our toil via taxation and inflation. Its created, owned by(they made it and it has their name on it, not your name or mine) and loan into existence by the onerous banking interests. Another reason why we cannot buy anything is because our parents were unwitting participants that gave up our birthright to own property when they signed our birth certificates. The public owns all that we have, the only thing that we do own is…nothing. This is another reason why we cannot buy anything, as that would indicate a property right, which as I have already stated we no longer have.
Communism anyone?
[quote=Adam Taggart]Dave is handling himself here exactly as he should.
PeakProsperity.com is a place for respectful idea exchange on topics relating to the Three Es (please familiarize yourself with our civility guidelines). We're all trying to gather facts and perspective before making our own individual minds about what to do.
Bullying people into silence – through strawman hyperboles or otherwise – is not welcome here.
[/quote]
No one's bullying anyone here. I made a simple analogy. Sounds like your finger is a little quick on a very sensitive accusatory trigger. Actually, you're doing to me exactly what you're falsely accusing me of. Is censorship the modus operandi here?
...understand that you and me are the collateral for all the IOUs in circulation. Forced by coercion to work for and to pay our way in life with valueless paper of which the main purpose is the theft of our toil via taxation and inflation. Its created, owned by(they made it and it has their name on it, not your name or mine) and loan into existence by the onerous banking interests.Well you should just speak for yourself. I have no debt, I can live where I like, I'm not the collateral for anything, I buy stuff when and where I like using dollars, and it all seems to work great. If you have a different experience with reality than I do - well it sounds unpleasant for you. Sometimes life is what you make of it. And if you have any of that valueless paper lying around, please send it to me. I'll find something to do with it. [I wish there were some real true believers out there who had so much faith in their belief systems that they actually sent me their "valueless dollars" just to prove me wrong...so far, no luck]
[quote=davefairtex]
So equating shorting the stock market with death is a false analogy. You can come back from a trade loss. I know, I have done exactly that. What's more, you can actually learn from the experience, if you really want to. I have done that also. Experience is a great teacher, and often its the only teacher that some people will listen to. My intent is to arm a curious person with information, in the hopes that the loss will happen less often, and the learning will be more rapid. On the other hand, death happens exactly once, and from that state, there is no coming back - at least for the vast majority of us. And since there is no coming back, there is no learning that can occur, at least no learning that can apply to the current lifetime. So in answer to your (rhetorical) question, because the two things are strikingly different - chalk and cheese as it were - I would treat them differently. At this rate, I'm guessing a reference to Hitler is next. http://en.wikipedia.org/wiki/Godwin's_law [/quote] I don't agree that it's a false analogy. It's a metaphorical analogy. When someone says, "You're killing me", it's generally recognized to be a figurative rather than a literal statement. And I think I posed a valid question. With regards to the Hitler reference, may I point out that you brought that subject up, not me. But with due respect and consideration of your statement, forgive me for any error in the perceived accuracy of my analogy and allow me to restate, hopefully with more clarity and precision that unequivocally makes my point, what I had hoped to express. "Why would you not attempt to discourage someone from shorting this market when, in all likelihood, if they need your advice to understand how to short the market, they will most likely come out a financial loser when attempting to do so?"
So, going along with your line of reasoning, if people asked you the best way of killing themselves, you would educate them, give them data, and tell them to trust themselves, since they're probably going to do it anyway and you feel morally obligated to inform them and not interfere with their free will?
"Why would you not attempt to discourage someone from shorting this market when, in all likelihood, if they need your advice to understand how to short the market, they will most likely come out a financial loser when attempting to do so?"Your question is indeed clear and precise and everything I could want. I say well done! Now then, to your question. I presumed that the person asking the question fits the general demographic of PP - relatively well educated, older, with money, is data driven, and in this particular case, is interested in gaining understanding about market mechanisms. What's more, this was in the context of an article that talks about shorting the market, when to short, etc. In that context, supplementing that article with HOW to short just seemed to be a logical next step, especially when someone specifically asked the question. So there you go. Fantastic to have a rational discussion - intelligent people can differ on how they respond - we agree on the perils of neophytes shorting more than we disagree - but my self-appointed role isn't to baby-sit, it is to educate, and that's especially true when someone specifically asks about HOW.