King Capital Group
of Silicon Valley
of Silicon Valley

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Our Opinion is that the economic catastrophe in the year 2008 will not resolve itself for a decade or two.

In the US, the wane of the baby-boomer population will only contribute to the collapse of housing values as will the collapse of credit from the greedy US banks, which will fall on their own.

The threat of inflation has been caused by and will only serve to create the US Federal Reserve to make mistake after mistake as it ignores, and will ultimately feel the gravity of, a housing and wage collapse in this new era, i.e. severe deflation much worse than the 1930 debacle.

People no longer contribute greatly to productivity; instead, machines are the greatest contributor. And the Fed has no clue how to understand or deal with the facts in the present day from its obsolete 1930 education.

Quantitative Easing

Our principal has increased by more than 80% from January through February 2011.

We don't like bragging, but we love comparisons.

In the Jan. - Feb. US market we hope you didn't satisfy for less.

We have used options to maximize gains on stock price movements in US tech-based equities.

Our opinion remains the deflationary opinion:

GE and CNBC can advertise whatever they want for whatever compensation they can achieve, but the facts are as follows:

  1. US home prices have been devastated.
  2. US wages and salaries have been devastated.
  3. Unemployment is at a record high and once the folks get back to work, they will be earning much less than before.
  4. There are two-for-one sales everywhere you look and they’re not the kind of “sales” that are simple US out-to-screw-you-advertisements, they are REAL acts of the deflationary cycle… from fast food to suits and other clothes.

The essentials of food, clothing, and shelter are rapidly becoming worthless because no one can afford what they could afford in prior times. The “Fed” has no incentive to speak the truth about economic collapse.

This is called DEFLATION and a few folks with smoke and mirrors cannot change the facts.

Yes, the Fed can print money and TV can promote fake inflation.

But the facts remain the same.

No real money is circulating. A freshman economics student can discern real money from fake money.

Interest rates will grow higher because the money is not real.

The same thing that happened to the US and to other countries starting in the year 1929 has also been happening since the year 2008. There have been no actions to halt or significantly influence economic demise. There is simply an attempt to prolong the inevitable for political reasons.

These are the same as the economic events leading to WW2.

Printing money will not create inflation in the US; instead, it is causing and will continue to cause severe DEFLATION as US banks hoard money to meet “capital” requirements while workers and professionals continue to be paid lesser and lesser amounts.

The monopoly-money will prove to be worthless both in the US and around the world, the European economies and currency will fail from the harsh reality of a poor work ethic, and the world will continue to head into a state of unpaid debt and economic collapse.

Previous Views

Equities in Silicon Valley continue to be overwhelmed by global economic conditions.

Our opinion is that the threat of continued deflation in the US is dominating equities markets in general and certainly surpasses earnings results as the look forward suggests decreasing earnings based on lower economic expectations.

Our opinion is the deflationary opinion:
Consider an airfare from San Jose, CA to Austin, TX. The fare is huge, 20-50%+ higher than a year ago. Higher price = sign of inflation or at least non-deflation? NO it’s definitely a sign of deflation. About 50% of the US airline fleets are parked in the Nevada deserts because they cannot operate at a profit. The available planes have been cut in half. A mere 40% loss of air travel demand creates a supply surplus and higher prices. The net performance/loss of air travel demand is in fact 30% to the red side. Assets are being taken out of service, not the other way around. 

We can’t believe a lot of the news we might hear. We are in a deflationary mode in the US. We need to adjust our plans accordingly. Don’t get left out.