Never before has the government’s manipulation of financial markets created greater dangers — and opportunities — for investors!
How do we know? Because lesser manipulations in recent years have already proven to be disastrous.
They led to a stock market bubble and bust in 2000 … to an even larger housing bubble and bust in 2007 … and then the greatest banking crisis of our lifetime in 2008.
Nothing Learned
What’s most ironic is that, despite those obvious failures, now those very same policies — even larger in scope than ever before — have led to still another massive bubble, this time in the one asset that, until now, had been considered above the fray: U.S. government debt.
We know how disastrous the sovereign debt crisis has been in Europe. We know that the United States government’s finances are definitely not in better shape. And we also can anticipate that a bust in U.S. debt could make the housing and banking crisis of 2008 look mild by comparison.
The only remaining question is not if, but HOW a debt crisis will hit the U.S. as well. I see two possible scenarios …
Bond collapse scenario. Mass psychology in global bond and currency markets drive the action.
One night, you go to bed thinking that the majority of market participants retain confidence in government debt, more than enough to prop up bond markets forever.
Then, the next morning you wake up to discover that the global confidence in the U.S. has been shattered by a singular event, and all hell is breaking loose.
Borrowing becomes next to impossible or prohibitively expensive. Banks fail. The financial system as we know it unravels. The economy plunges into another recession.
A video replay of 2008? No. Because this time governments do not have the will or the means to fight it.
Recession scenario. We wind up essentially falling off the same cliff as in the bond collapse scenario, but we get there via a different pathway.
This scenario begins where the first scenario ends — with a double-dip recession.
The recession guts government tax revenues, bloating the federal deficit even further.
And this is what leads to a government funding crisis, much as it has for many cities and states around the U.S.
Which Scenario Will it Be?
Still too soon to say. But we already have some evidence that BOTH are in process.
S&P’s warning on Monday, putting the U.S. government’s debt outlook on “negative” status, was just one more reminder of the unfolding debt crisis scenario.
Meanwhile, we also see abundant new signs of the double-dip recession scenario:
- Inflation: Historically rapid rises in inflation have consistently triggered a recession, or at a minimum, severe bear markets or crashes. Since inflationary pressures are clearly on the rise, this indicator is a clear warning sign.
- Severely rising crude oil prices have also been associated with recessions in the past. Increases of more than 150% in two years rarely happen. But when they do, a recession isn’t far off. So this indicator is currently also in “recession warning” mode.
- The U.S. housing market has started to fall again. And the mortgage credit reset schedule seems to assure much more downward pressure during the next 12 to 15 months. This doesn’t bode well for the housing market itself, the banking sector, or the economy. Indeed, a sustainable economic recovery with an ongoing price slump in housing is highly improbable.
- Then we have rising interest rates. In both the U.S. and in Europe the bond market is driving longer term rates up. And in emerging markets, central banks have long started with restrictive monetary measures, hiking interest rates and reserve requirements. Needless to say, rising interest rates can trigger bear markets and recessions.
These are four strong reasons for another economic downturn in the not-too-distant future.
With governments already massively over-indebted …
With inflation expectations on the rise, and …
With central banks starting to jack up interest rates …
I doubt the governments of Europe or the U.S. can pull another rabbit out of the hat. Soon the stock market will feel the pressure, and the economy would likely follow.
My recommendation: If you’re overloaded with stocks, use inverse ETFs like the ProShares UltraShort Financials ETF (symbol: SKF). They’re easy to buy. You can never lose more than you invest. And they’re a very good hedge.
Best wishes,
Claus
{ 41 comments }
The case you make here, Claus, for market impact, especially financials, seems very logical at least in the initial impact.
As with the market crash in the fall of 2008 and the subsequent bull market beginning in Spring 2009 that seems to be topping or turning down now, do you see a similar pattern emerging?
Eventually, the issues with debt and dealing with it will create hurdles for business which even if there’s a resulting bull market, will bring it all back down. At least that’s what I think.
However, if the apparent difference in analysis you seem to have with Larry are more than just timing, a Money & Markets Point – Counterpoint video debate with him soon would be very interesting.
when it all fails – it will only be worth the paper it’s written on.
All paper is fiat… Only gold and silver will suffice.
Yes, it is inevitable that the debt collapse will resume until debt is liquidated to a resonable level, this will be either be in a controlled way or an out of control way, as we see that we still have many believers that government can guareentee a cradle to grave package of benifits, I must assume it will be an out of control way, obviously with 1550 gold and 45.00 silver there are more who believe we will not be able to fix this without a catastropic crash.
Claus,
What is the name of the stock advertised in the middle of the page? The small Maryland company that has received a FDA landmark ruling. I cannot watch video’s on my internet, this is why I am asking.
Kyle, go to the website, then click away from it. When you do you will get a nag screen asking if you really want to leave the page. Click ‘cancel’ and stay on the page. Doing this will take you to the transcript of the entire video.
I greatly admire Claus’s pieces. They are clear, logical and intelligent. Nevertheless, in view of the market’s obliviousness, I wonder if his analytic tools are obsolete. Much like the generals always fighting the last war.
David Roth, I totally agree with you. Claus analysis and his conclusions are always consistent, clear and easy to accept. Unlike Larry Edelson who supports actions of FEDs chief Bernanke saying: ” if I were in Ben Bernanke’s shoes, I would be taking the exact same steps as he is” or “Bernanke is doing the right thing” ( http://www.uncommonwisdomdaily.com/the-biggest-bet-of-all-time-10352#comments ).
Most of us know FED is heating up the markets as it used to do many times in the past creating bubbles, inflation and artificial euphoria . They allow new criminal actions like HFT, lending huge amounts of money to, for example “wives of the banksters” at zero cost and risk to them, bailing out bankrupt and inefficient organization, firms on Cayman Islands, etc. Their US destructive policies, creativity and actions are endless.
Our money will be worthless until we change the WHO is printing its quantity – the creatures from Jekyll Island – and take away their control of the government.
Andrew-
You got it right.
Glad to see you agree with my prior statement regarding a government bubble.
What now is the “risk-free rate”?
The fact that so many Americans continue to worship big govt is the main problem.There seems to be no limit to what Americans allow their govt to do.Since govt is so inefficient and destroyer of wealth, more govt just means a poorer country and lower standard of living for most.Expect to see calls for higher taxes on the rich and corporations,lots of price controls and eventually rationing.No one could have predicted the level of govt involvement in the economy before the 2008 crash and I expect a lot more in the future.
Commodities look good and we all know according to what my guru the great “H—-” says that the relationship between dollars and the price of gold is inverse.
So, hold your gold so you can fill your wheelbarrow with dollars and thereby to buy some bread.
JC
It is not “government manipulation of financial markets” that created the latest financial crisis, anymore than that was the cause of the 1930s “Great Depression”. The cause is, and was, the LACK OF sufficient GOVERNMENT REGULATION of financial markets. Clinton’s signature of the repeal of Glass-Steagall, coupled with failure to fix the conflict of interest in rating agency practices, were instrumental. You Austrian school folks know this, but your ideology overides your common sense.
Let’s see if I understand this line of thought. The repeal Glass-Steagall, coupled with failure to fix the conflict of interest in rating agency practices, caused this financial mess?
First I have to set some boundaries in order to be understood. One can either have a free market or one can have a controlled market. Unfortunately IT IS A BLACK AND WHITE proposition. If one has even just a little control over a market then that market is controlled.
Yes I will agree that there was a loss of control over the market with the repeal of Glass-Steagall. In fact that loss of control was the major cause of the financial sector meltdown. The reality is that the United States of America has controlled markets. Controlled markets are anathemic to CAPITALISM. They are SOCIALIST. Liberty and Freedom merely become A FARCE, slogans without meaning, in a controlled marketplace.
I happen to want Liberty and Freedom. That is the principle behind the Founding of the United States of America. Our forefathers desired to escape the tyranny of European Central Banking practices. We had many challenges to our Freedom in the 19th century and the challenges were wisely not enacted into law. Liberty and Freedom in this country manifested our prosperity. Now, because of the lack of Freedom and Liberty, America is in decline.
Unfortunately in 1914 the Federal Reserve Banking Act was enacted into law and our market has been controlled ever since. Our Dollar has lost over 98% of its purchasing power since Congress abdicated its Constitutional responsibility “to coin money and set the value thereupon” to the Federal Reserve, A CORPORATION OF PRIVATE BANKS, the member Banks remaining a closely guarded secret. The United States Constitution did not give Congress any right to delagate this responsibility, to set the value of money, to a private corporation.
This PRIVATE CORPORATION, the Federal Reserve, has destroyed the value of the United States Dollar with their “control” over the marketplace. They decoupled the U.S. Dollar from Gold back in August, 1971 and doomed our currency to fail. Actually that is the root cause of the current financial crisis. Gold disciplines a nation not to inflate its currency supply as there is a finite amount of the precious metal.
So I am writing that a free market is the best market. I am also writing that we need a precious metal backed currency to provide stability. There is no real growth in any market without stability.
I do not believe in any control other than that over fraudulent activity. Banks that are weak, due to mistakes in their business practices, actually need to fail. Banks which are prudent with their depositor’s wealth will weather any financial storm.
The Austrian Model is a model of Freedom. Freedom comes with a price…an economic price. Yet with freedom there is prosperity.
Bollocks (!) and you admit to it in your last sentence. Does anybody ‘know’ all potential factors bearing on ‘market behaviour’? Scan a few (peer-reviewed) articles in ‘Nature’, Science’ (etc.) on seismic hazard prediction, climate change, etc, etc., and you’ll get a clear picture of the limited extent to which ‘specialists’ can make forecasts. As a (in this case financial) ‘soothsayer’ by all means ‘pay your penny and take your choice’ but don’t pretend (to yourself or others) that your predictions are rest on any rigorous analysis of ‘facts’.
Claus,
If either of your collapse senarios is correct, what will be the effect on foreign stocks that are traded on the NYSE and Nasdaq? I own ETF’s and stocks in China and other Asian countries as well as South America.
How can you never lose more than you invest with SKF? Morningstar shows it down 16% for the past 12 months. What am I missing here?
I also bought some TBT’s, treasury ultrashorts, on your advice. I am losing about 10% a month. Will they go up if the bond market collapses?
I find all these guys views timely but to profit from it just buy their advise.
I have Mike for my wife’s money , I use Larry and we are doing great
Martin,
he is saying that you can loose the money you invest, you just cannot loose more than that,
as may be the case with some other speculative financial products
If you invest $1,000.00 in any stock and it drops to 0. The most you have lost is the $1,000.
As always, I appreciate the “contrary” point of view offered by Weiss Research. It’s refreshing to read financial analysis that doesn’t follow the herd. As we’ve seen, the so-called tried and true financial strategies of the past no longer work in a climate of corruption, non-enforced regulation, unparalleled debt, and recession. Which leads me in to my next point, which I offer with the utmost respect.
In a potential “worst case scenario” in which an entire economic system collapses, there is little that anyone could do to create lasting wealth. My parallel evidence is the bomb shelter craze of the cold war. The theory went that if you stockpiled enough survival supplies in a radioactive-proof bomb shelter, you could “survive” nuclear winter and emerge with a remnant of other survivors. That theory was proven to have serious flaws. For starters, if one survived a holocaust, there are untold and unforeseen dangers in the form of long-term radioactivity, mass extinction and lasting climate changes…not to mention the impracticality of having a meaningful existence in a hollowed out cylinder for the remainder of one’s life. A parallel argument holds true in a worst-case scenario economic collapse. Even if one accumulates stocks, gold and other safe haven financial instruments, one still has the “nuclear winter aftermath” to contend with. The landscape of a post-apocalyptic economy is an unstable picture at best. Wholesale segments of society would be overturned. With potential mass unemployment, industry collapse, disruptions in basic services (electricity, water, food supply, law enforcement, healthcare, etc.), there is little that any one individual could do to preserve a way of life as we presently have grown accustomed to. True, wealth accumulation may offer some protection in a potentially barter-based world. However, if the entire social fabric of a society has been disrupted by mass economic collapse, accumulating wealth is little more than building a bomb shelter to endure a nuclear winter.
Having said that, I both greatly respect and follow your insights. I do urge you to focus more on the bigger picture if in fact your scenario(s) unfold. Our society was based on basic values that transcend the accumulation of individual wealth. We must acquire a readiness to help large groups of people with basic needs. We must devise strategies to rebuild the aforementioned basic services. We must have contingency plans that will ensure that a new playing field will be built where everyone eventually has the opportunity once again to profit. In short, any long term survival strategy must envision the age-old concept of the greater good. It was the outright disregard for that basic value that led us down this sordid road in the first place. The brave new world of the post-2008 recession will necessitate sacrifice, a commitment to something bigger than any one person, and a determination not to allow another 2008 to happen again. These concepts all involve a willingness to invest in things, people and wealth that the “herd” currently isn’t paying too much attention to.
Right on, Dave, I agree with your comments wholeheartedly.
You seem to get it. Things are going to be dramatically different in the United States after the collapse of the Dollar. It will not be like Nuclear Winter, however. Yes there are going to be shortages in services and goods for those without Gold and Silver.
Even though Weimar Republic Germany went through its hyperinflation period most people survived it. Some of the wealthy prospered from it and were rewarded for their investments. They used strategies like those presented here…moving money into other currencies and offshore bank accounts…moving their wealth into non-domestic currency assets…like foreign stocks and bonds…moving their wealth into precious metals.
That is what you need to be doing…getting out of the U.S. Dollar and U.S. Dollar based assets…because the U.S. Dollar is a doomed currency. That is what I have been reading, not just from Dr. Weiss, but, from many different sources.
It will be very bad for most but it doesn’t have to be as bad for you…that is… if you are educated and have the clue. You can even profit from the demise of the United States. That is what our Federal Reserve Bankers are DOING. They have INTENTIONALLY engineered this demise so that they, personally, can rob our treasury blind if you haven’t figured that out. So you might as well join them and profit from it also.
Now I know that doesn’t sound “patriotic”. But patriotism isn’t going to feed your family and you cannot trust the Government to do that for you. That is what the Republican Party has been teaching…YOU CANNOT RELY UPON GOVERNMENT. So we intentionally passed the laws, during the past decade, to bankrupt the nation and allow those people whom have listened to us to become very rich in the process. We call it, “Starving the Beast”. Representative Bob Barr was right in this tactic. I know that it sounds cold but the people whom want to have a “mommy government to take care of them” deserve nothing. So they can go get drunk, use illegal drugs, have kids out of wedlock, live way beyond their means by borrowing money that they can never pay back by using their LIAR’S loans (in other words…STEALING), and end up with NOTHING for all that we care.
So go ahead and try to tax us, “tax the rich”, to pay for a larger Government with fewer freedoms. What a laugh!!! We have sheltered our wealth and have started to expatriate. Our businesses are offshore anyway. We paid our business interests with tax breaks to relocate offshore. We created a corporate welfare plan for this very purpose. It is too bad that there is a high unemployment rate but, truthfully, many people do not want to work for anything, or even worse, haven’t worked at all for anything, anyway. They want their Government to hand it to them through Welfare Programs. They believe that they, somehow, are entitled to a free ride.
So we have been preparing for this for quite awhile. When the masses try to tax us we will make sure that not one dime will be invested back into the United States until the people of the United States cleans up it immoral house. It is immoral to demand a free ride from Government. Many other countries’ populations are willing to work and invest in their future. That is where the growth is. That is where we are going to take our wealth.
Selfish , Greedy , unpatriotic …
when the unruly masses comeafter a collapse , better have a good cave to hide in !
Its people like you that have taken advantage of the system and avoided paying your fair share of taxes that have bankrupted the system !
no free lunch !
Claus,
Thanks for your advice.
Question: Would moving my bank account to Canada and converting to Canadian dollars protect me against the US dollar devaluation?
THX- Steve
Question: I too would like to know the downside/upside of opening a saving account in Canada. Such as: (1) is one taxed twice by US and Canada; (2) what is the easiest way to transmit dollars to and from Canada
I fear that the recent Standards & Poors rating was too optimistic. S&P are refusing to be the first to yell “Fire”. No one likes a party pooper and S&P has been serving those folks loyally , with what they want to hear, want to see and in the end pray to be so. So, why mess up a good record?
Great overview piece Claus. Very nice analysis. Covers all the bases without getting bogged down in one aspect of the problem.
Klaus:
Thank you for your articles. It would seem, all things considered, that indeed there is a collapse of the current economic system coming sooner or later. We see hundreds of “experts” on dozens of websites, TV channels, and investment journals attempting to “predict” what will happen, and their prognostications are many and varied. The truth is, no one really knows or can predict with any certainty the details or exact scenario of the collapse because there are simply too many wildcards.
The bottom line is this: While millions of “savy” investors scramble to “protect” their wealth (always unfortunately defined as the material holdings) no one really knows how effective any of those methods will be. Perhaps all will be ineffective? And, in the aftermath of a collapse, I would think what we currently term “wealth” would be virtually worthless anyway, as the primary items of value would be food, shelter, fuel, and clothing.
Holders of gold and silver might be surprised to find there is no way to value their holdings in the aftermath of a collapse. Could an old widow get a chisel and chip off a tiny sliver of a gold bar she paid $10,000 for in 2010, buy a peck of potatoes with that sliver? Would a person with extra food accept a sliver of a cold yellow metal in exchange for his precious potatoes? These are things most persons are not considering at this time. Would I give you ten gallons of my precious water in exchange for your little shiny silver coin that I cannot drink, eat, or use as fuel?
The inconsistencies of all the prognostications are reflected right within the Weiss group, with Larry predicting a hugely inflating stock market, Klaus predicting its collapse, Sean urging us to load up on gold and silver miners, Larry feeling silver buyers are destined to get burned, Tony hyping China stocks big time, Brian sometimes predicting a rebirth of the dollar and at other times foreseeing a downfall, and lastly, Martin prophesying the end of all, yet at the same time urging us to buy “high rated” stocks.
I followed Tony’s advice and bought some Chinese ETFs. They fell right along with most everything else yesterday. If and when the market collapses, it does not seem any stocks will be able to withstand a complete downfall, yet Martin says we needn’t worry with the Weiss top rated stocks. I bought those, and they fell as much or more than the rest yesterday when the market dipped.
So, bottom line: If you think you have a magic formula for salvaging your wealth in a post-economic collapse world, it seems wishful thinking at best, as the very word “wealth” will, of necessity, be redefined at such a time. It would seem, all things considered, that storing water, food, and fuel, learning to garden, build, and hunt (if you are a carnivore, which I am not) would make more sense than hoarding shiny metal or maneuvering to protect what you now call “wealth,” which in my own prediction:
Will all become worthless paper.
ABE
I was thinking the same thing. The sky is falling but buy these great stocks? Now, I am making some moves into GLD SLV TBT BZF but the three G’s is where I am focused…. God, Grub, and Guns.
Aaron
Ain’t gonna happen. Not at least until the price of oil shoots the moon. Ben Bernanke will buy up any Gov’t debt that the markets won’t. QE forever, just like Japan. However, at some point, sky high oil prices will dampen down the economy, and that will cause a recession.
Claus,
Recently I heard discussions in the “alternative media †of a promising solution to the world’s financial crisis. This solution hinges on a financial transactions tax, sometimes also referred to as the Tobin tax or “Wall Street Sales Taxâ€. I am sure this is very familiar to you, but I don’t remember ever hearing you or anyone else at Weiss Research discussing or even advocating such a program. As you know, the volume of financial transactions is huge … estimated at $4 quadrillion ($4000 trillion) per year A transaction tax of just 1% would raise $0 trillion per year, which would be sufficient to pay all federal and state debts in a short time. With intelligent structuring, such a tax could not only raise the magnitude of revenue needed to solve the debt crisis, but also regulate the trading of those “financial instruments†that caused all of the problems in the first place. From what I heard, such a tax existed in the past, but was circumvented by irresponsible politicians. New York state, for example, still has such a tax on its books, and if it were to be observed, would raise enough revenue to pay all of the State’s debts with much left over.
This is such a promising, logical and equitable approach to rectifying the current crisis, that it deserves your full support. I realize that this is a “third rail†issue relative to the financial powers that be, but since when has such a consideration stopped those at Weiss Research? And I know that if you advocated such a tax, you would do so in a measured and intelligent way that would be equitable and minimally disruptive.
For all I know, you and others at Weiss Research are already pondering this issue, and developing some concrete proposals. In that case, let me say that you have my full support.
Your loyal subscriber,
Steven Mullerheim
Berkeley CA
Me thinks the “Day After” scenarios that liken Claus’ description of economic collapse to total physical destruction with remnants of survivors valuing water more than gold and silver is more of a collapse than Claus envisions.
I think Claus may have grandparents that can tell us how they survived hyper inflation in Germany.
I seriously doubt that physical and electronic infrastructure will collapse. That would take something far worse like some rogue state creating a massive EMP over New Jersey and blowing out everything electronic for a 1000 miles in all directions. Then repeating that over Portland, OR, Bakersfield, CA, and a couple places inland from the gulf.
An economic collapse may trigger initial rioting worse than Greece as folks used to entitlements no longer get them. But that’ll be followed by physical government control followed by realization that the taxing everyone at 100% to pay off the foreign debt holders won’t even solve the fiscal problems in a decade. That realization is the key to getting started on a solution. Unfortunately, like any addiction, hitting bottom is usually needed. Fortunately, hitting bottom can be achieved without total destruction. It’ll be painful but it will only be more painful the more debt we pile up before that realization.
We already know what happens in Wisconsin when perceived rights are threatened. That was somewhat peaceful albeit not very respectful of public property – as if they thought that repairs could be carried out without spending public money. Rioting would cost even more to repair.
So perhaps there is a way that expectations can be managed if those in Washington DC and New York just stop trying to hide the problem from us. If those that have brain washed the masses start working for the good of the country instead of whoever their puppet masters are, we could have a rather peaceful solution.
Ethically, we as a country need to pay off the foreign debt in reasonably equivalent values to what we borrowed. Anything less would be criminal theft. And just ’cause inflation and devaluation is the way the world has done it for all time, does not make it right.
However, we can’t pay it off without first stopping the borrowing. And we can’t stop borrowing until we stop spending money we don’t have. And we can’t do that without some of us going into poverty for the sake of our children and grandchildren. I for one would be very willing to give up everything but subsistence if I knew there would be no more deficit spending – ever – and that we would never ever be in debt. Trouble is, when you get politicians and money together, events have a habit of spiraling our of control.
On a slightly different but related note, my theory to the cause of all this is simple. Wherever there is free money, bad things happen.
RE: ABE
there has been lots of ambiquities with D.Weiss and his team.
Market seems to be setting itself up for hyper – inflation – just check out all commodity charts of big miners they look like the next leg is serious up.
I think if sanity prevails then the FED pulls the plug when no-one’s watching – sinking everything – then does what Mark Faber says – when the market drops 20% QE 3 starts – followed by QE 3 – every time the markets struggle we get another round of QE – which in time the stock market should play out like Japan – what will the Economy do – flat line for 10 years.
SKF can be a good in the event of a market crash. It worked for me last time, but please make people aware that this is NOT a safe place to leave money for more than a few days. It has constant downward drift due to the fact that it only seeks a 2x inverse return on a DAILY basis. If you are invested in SKF and there is not much downward market action – get out or you will suffer steady losses. In my personal opinion, this is a day trader tool only.
I appreciate very much your thoughtful comments. Thanks!
Dear Klaus:
Guten Tag! I always enjoy your articles, though sometimes I may not agree with everything in them. For example, I purchased PSQ on your recommendation, but I found out from my brokerage firm that this play is suitable for very short term trading—like a day or not much more—otherwise, if the markets don’t fall dramatically, it becomes a progressively expanding loss for the holder. Unless I am misunderstanding the information provided by the brokerage firm, they are saying that PSQ is NOT something to buy and hold but something to use to make a one day profit then dump or risk losing exponentially. Does anyone else have experience with this market short PSQ?
One thing I believe most do not consider when they ponder the subject of collapse: Everyone seems to look at collapse or demise in America in only a financial or economic sense. Yet, when one studies historical examples of the fall of empires, one also often sees the factors of disease epidemics, “natural” catastrophes, and dramatic climatic changes (recall the “mystery” of the Mayan downfall, the plagues of Rome, etc.), not to mention moral degradation. Should several dramatic and massive “natural” catastrophes strike our beloved land at the same time–in addition to the stresses of the financial crisis, heavy unemployment, low government tax revenues, defaulting cities and states, etc.–then we could see a Federal government on its knees struggling to avoid total collapse and a populace on its own.
Some persons seem to believe the infrastructure here is impervious or would only be harmed significantly by a purposeful human attack or mishap. Think again! The Sun, that huge shiny yellow orb above you, can wipe out our electronic societal structure in one fell swoop with a huge solar prominence (flare) that would thrust enough radiation our way to end civilization as we know it (electronically dependent). Our scientists are currently warning us of just such a possibility, as the Sun is now in its 11 year peak in the sunspot cycle. 2011 and the period of danger is not over yet. We narrowly dodged a huge blast of radiation from the Sun a few weeks ago that luckily was not thrust in a direction toward Earth. Scientists reported that the blast could have knocked out all transformers over a vast area of the U.S. Try checking your portfolio status with no computer and phones down.
Most people are only cursory students of history and many know virtually nothing about past civilizations and how they met their downfall. More often that not, it was due to “natural” phenomena, not man-made.
Think Yellowstone volcano, New Madrid fault, Mt. St. Helens, solar flares, Pacific Northwest subduction zone, super hurricanes, etc. To discount the part these possible events could play in a national collapse would be naive indeed. To believe they could never pose a problem would be unrealistic.
And here is the greatest shocker for those of you who may never have studied past geological periods: Catastrophes occurred several times before and virtually erased life off the Earth. It’s in the geological record. 95% of every species that have ever lived on planet Earth are now extinct! Hard to believe but true. And, that includes all former “species” of mankind.
So, do I advocate we all wring our hands and cry? Not at all! Live your life, take your chances, have your little enjoyments, but realize that in the end your “wealth” is just that much dust that can blow away at any moment. If you can still be serene knowing and accepting that, then you’ve triumphed.
I live in Australia where the total Government debt is only twelve percent of GDP and falling. How did we manage this? Tax. We pay way more tax than US citizens do and we always have, especially on non essential items like alcohol, cigarettes, luxury cars etc. A case of premixed Jim Beam cans costs $75 dollars here. Nearly fifty dollars goes straight to the government. A Mercedes that costs $70k in the US will be $200k here. We can’t claim interest on our mortgage…you can. Our top tax bracket kicks in at $180k yours at $374k. Your top tax bracket is only 35% while ours is 46.5%. I could go on and on. Sure we’d like to pay less tax but at the end of the day wealth is a relative thing so if you are keeping up with the Joneses you’ll be sleeping OK. And if a $200k Mercedes is that important to your ego…you’ll find a way (and many do). And another thing… your minimum wage is way way too low and is totally weighted in favor of the wealthy. In fact your entire economy is skewed to advantage the wealthy at the expense of the workers. And now that your debt is roughly the same as your GDP and climbing it is clear that you have been living beyond your means for decades. My advice…gradually but surely lift the minimum wage and raise taxes and accept that you can no longer spend more than you earn. It’s actually pretty easy once you are used to it.
The greatest investment today is the ability to go to DinarBanker.com and purchase a “lay-away” order to purchase 1,000,000 Iraqi Dinar. Today it takes 1,170 dinars to purchase a single U.S. dollar ($1.00) the dinar is to revalue back to it’s pre Saddam rate of $3.22. This is a chance to turn your $660.00 dollar investment into $3,22,000.00. Worth looking into.
Purchase the Iraqi Dinar. A chance to turn a single dollar ($1.00) into $1,173.21. Well worth looking into.
You have been saying for at least a year the stock market is going to come crashing down. You, and your entire staff have been bearish and the market continues to go against you. i think you might want to stop losing money and get bullish. hell even a blind squirrel finds a nut every now and then. why dont you quit trying to guess the market and get long where you should be.
I find it hard to believe that an ultra inverse ETF is being recommended here as a buy and hold. Even the people who issue these things will tell you that they do not track their market long term. Isn’t there something better than that?