The Incredible Shrinking... Everything

Maybe Richard Heinberg had it right when he titled his book "Peak Everything." I mean, usually when there's a recession, certain sectors do well. Not the same sectors every time, but the money usually moves somewhere - bonds, commodities, precious metals, real estate... somewhere.

But this time, everything is falling dramatically, and all at the same time. The stock market is nearing a 50% drop from it's peak. Oil is already over 50% down. As is corn. Houses are off about 20%, depending on who you ask. Gold is off 30% from it's peak. Bonds and money markets are both very shaky. All levels of government are reporting shortfalls, sometimes to the point of cutting municipal services.

So where have all those trillions of dollars gone?

Best I can figure is that they just went *poof*. As in massive deflation. Investors would love to buy or hold their gold, but they have to sell to cover their stock losses. And vice versa.

What does it all mean?

I don't know. But I don't think I really like it all that much.

An Indian friend of mine who has been through bank failures, economic swings, and other such nonsense likes to say that at times like this, you shouldn't worry so much about the return on your money, just the return of your money.

--