Your Comments Please …
Is the U.S. economic recovery sustainable? How long can it continue? What will happen if it aborts? What are likely to be the biggest surprises for investors in 2010?
The Great Hoax of 2009-2010
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Most believe the bottom has been reached, but the looming commercial real estate loan problem has most of the big money on the sidelines. The savings rate has gone way up because folks are both scared and confused. Cash is king for many. Toward year end, there will be alot of tax selling. unless the earnings reports show tremendous improvement, it is doubtful that the market will do much more than limp along. jfs
A bankrupt nation has nowhere else to go but into bankruptcy. I don’t understand how we can talk about recovery. I see chaos coming and out of that chaos some new beginning. But what has gone around has come back around and I don’t think any of us are going to be really prepared as to what it is going to be like.
Hi Martin,
i predict more of the same with markets not finding their feet as the government gets more and more involved. We saw this in Africa – as economies become more centric inflation goes out of control and there will be a disregard for the basics of supply and demand with currencies, ecnomies and societies broken and beyond repair. The left leaning socialists will claim victory as more and more money is pumped into a broken system and more and more people will be taking food stamps. I think the shock will come when the world realises that the Chinese have been ahead of the curve and have beaten the rest of us to changing their reserves profile. It would be an intellectual disservice to think that they have not started changing their reserves from US$ to items of more substantive value. They are actively encouraging their citizens to buy gold and silver at this time. Interest rates will exceed Volkers wildest imagination as investors begin to look at the US as a CCC rated credit….pain and misery is on the horizon….I just cant tell when….
is there any way to take advantage of this hoax to profit from it? just like many people profit from the tech bubble?
On my point of view it seems the government’s aim is to stabilize the markets for some years until you got your saving wipe out by the inflation… the dollar crashed by their policy (so the foreign debts)
So everyone will be happy.. apart the savers….
Running a small business, it is impossible to approach the future with any confidence of success. We are hunkering down, hoping to avoid as much of the WashDC flak as possible. Personally, there are few answers to protecting what we have earned over a lifetime. What/where can we do/go to just hold on to what we have?
I used to think that we were headed for a depreciating depression, but with all the money being printed and distributed, I am now worried about an inflationary recession. This is inevitable. Governments are the only ones that can cause inflation when they print money for which nothing was produced to purchase with that money. I’m retired on a fixed pension – I’m worried. We have officials in Washington that have absolutely no concept of what they are doing, and we can’t do one iota of anything to stop them. 2010 is a long way off. They seem to have IQ’s that match their belt size.
Your Hoax predictions will come true, I fear.
Artificial boosts by Government can only last for a limited period.
Here in the UK the standard interest rates offered to savers are a rip-off, with institutions lending on funds at much higher fates. There has to be a de-linking
of housing loan costs from bank base rates : a return to reality where borrowers pay a
realistic rate to savers who receive a fair return too ( say 6.5% loan rate and 5% return
for savers ) Making paupers of the elderly who rely on a fair return from their savings
only leads to increased social security claims.
Regrettably the UK has become too reliant upon the miracle financial services industry which has shown itself to be built upon sand. The US has a vast amount of remaining
manufacturing whereas the UK has a much lesser base left.
Surely Government stimulus should be focussed upon ensuring local manufacturing grows and not just indirectly feeding overseas manufacturing ( too many large companies seem to believe they have to source manufacturing as cheaply as possible
and this too often results in the destruction of local expertise and crafts which once
eliminated can seldom be restored )
The difficulty is that many in the UK ( and likely the US ) want to support local industry but may lose their shirts if they do so.
Whilst I, to some extent, agree with your suggestion to retain as much cash as possible the counter to this is that a depreciated dollar and a virtual nil interest rate
is very unattractive.
With reservations I am convinced that it is necessary to speculate carefully in order to ensure limited growth is attained, even in the current uncertain times.
Here on the FTSE 100 we saw last Friday, the Natural Resources Sector plunge
and then this morning it has risen like a phoenix. Uncertainty, nerves or panic?
Unsettling for the private investor and it gives rise to a further lack of confidence in the system.
Graham Chrystie, Surrey UK.
I have long been of the opinion that the con can’t go on much longer. However, considering the size of the intervention, it is understandable that substantial manipulation can be accomplished. As with any hoax, the rebound is usually proportional to the illusion, (which is to say the manipulated appearence of prosperity.) If that is the case, we should expect ‘reality’ to re-assert itself resulting in stock numbers significantly lower than the previous lows.
This could be a false recovery similar to 1930, when the market were certain that the worst of the Depression was over. Instead, the interventions by Hoover and Roosevelt caused the Depression to worsen. It is possible we are creating just another stockmarket bubble. Could be a double dip in the making….
My sense is that “nothing” has really been fixed. Zombie banks, conflicted Presidential advisors and cabinet members, astronomical amount of deficits, no accountability for the perpetrators of the financial crisis, on and on and on. I am afraid we are headed for the mother of all reckonings. What a time to be alive! :-) :-(
Martin,
My concern is that while gold seems to be a good hedge against a falling US Dollar, it appears that if the next wave of the credit contraction begins now – the US Dollar will strengthen. So, deciding on the percentage is a bit tricky here.
1 the fed has been using strawmen for the stock mkt. and the fed tres. sales….all money going around in circles……a fake economy……
2 inflation storm just over the hill and it will be a large problem….
3 fed printing money too too too much and seem to just dont care ?????
4 gold seems to be a safe area or mining stocks for the metals…..
SOME SAY THE FED RES. IS OVER…..ANY COMMENTS…..THAT WOULD EXPLAIN THEIR ACTION….THE MORE THEY GET OUT , THE MORE THAT CAN BE EXCHANGES , THRU THEIR INSIDERS , FOR THE NEW GOLD DOLLARS AND THE ARRIVAL OF BASEL 2/3—–ANY COMMENTS WOULD BE APPRECIATED. REGARDS, CHUCK
What we are suffering from is a crisis of leadership. No one in authority is willing to tell the truth and come up with a reality based idea to deal with the mess we all are in. This is not just a crisis of leadership within our Federal Government but through out our entire system, universitys, media, and business comunity. Total lack of moral and ethical values from the top down. Greed,fraud and corruption are rampant and with give me, take me, buy me as the assepted life style. As always thank you for your INSIGHT.
John
Actually, Martin, I recognize the Fed’s hand and follow the reports by John Williams. And, yes, I am greatly concerned about the mounting federal debt, but consider the plight of huge numbers of ordinary Americans: real unemployment pushing 20%, 25% of homes “under water,” farmers and small businesses losing family farms and firms, and older adults on frozen fixed incomes though health costs skew (real) inflation toward that population. Now, imagine you are running the government. How would you keep millions of stressed out workers worried about their savings, jobs, and retirement off Prosac (and worse)? I’d probably meddle in the markets. What would you do?
A am afraid the economy of the USA will be declining. I am concerned that we may even loose our country, because of our reckless spening. Bob Hinds
Good morning Martin, I am always amazed at how long the government can keep a dead cat bounce alive because it is good for the economy. My question is who’s economy. Wall street or main street. We continue to subsidize, talk about a recovery and in general push the “happiness is here” story.. But nothing changes:
1. the deficit gets larger.
2. Wall street “funny money” derivities, etc. speculation continues to grow.
3. Government continues to print money and flood the market.
4. credit rates continue to show no costs for the risk that we are taking.
5. government ownership of private america continues to be allowed.
6. banks continue to hide their bad investments and will not face the public with how bad it really is. This also allows them to pay nothing for our money, increase their spreads. etc.
7. credit availability continues to decline.
8. Government spending keeps amazing me. How does the congress justify their treasonous behavior.
At some point we will have a catasrophy that will be of epic proportions. Kicking the can down the road only allows the pressures, thus the size of the future explosion to grow. God help us. Harry Coambes
Dear Martin,
Your dad, from all that you have reported of him, was a very good man! To be as negative as possible, there doesn’t seem to be many good men or women in politics/government. Therefore, your warnings of the hoax are timely.
A hoax indicates a fraud, and fraud involves in this case, victims! The laws our Nation were founded on can be seen imprinted all over the Supreme Court building of the United States. As the former Economic Adviser to Ronald Reagan said, “a people deserve who they vote for!” Sounds harsh, yet who can deny the trouble this country is in? To put aside the Law is to incur a curse. As you have warned, the payment to the Piper will be overwhelming. May God help us!
James Palmer
An email I sent out this morning prior to receiving yours:
Got Gold?
I not only agree but suggest “This is it!” – Game on beginning this week!
Gold is a great inflation hedge: Paul Tudor Jones
2009-11-02 14:46:19
A prominent investor has suggested that now is the perfect time to Buy Gold, Bloomberg reports.
The yellow metal has risen by about 18 percent so far this year, while the dollar – which tends to trade in the opposite direction – has contracted by 5.8 percent against the euro.
Paul Tudor Jones, whose Tudor Investment Corporation manages approximately $11.6 billion, explained that snapping up gold will provide a hedge against future inflation.
“Gold is just an asset that, like everything else in life, has its time and place. And now is that time,” he said in a recent letter to investors, according to the news provider.
Those comments were strongly corroborated last week by Philip Gotthelf, president of Closter, New Jersey-based firm Equidex Brokerage Group.
Speaking to Bloomberg, he noted that there is every chance of Gold Prices rising to about $1,250 per ounce by the end of the year.
“Gold has been pushing higher because it’s no longer just a hedge against commodity inflation, it’s also a hedge against a change in world-monetary standards,” he told the news provider.
Perhaps the only solution is to kick out all the Congress and Senate and start over. Encourage moderates to vote!
I would concur that we are in for “tough times” ….we are on the verge of a super meltdown and very few are willing to admit it. But even if the gov. hadn’t “invested” in attempting a recovery long term we are moving to a world economy. We do not have the resources we once had, we do not have the “intellectual capital” we once had and sadly it is the “intellectual capital” along with resources and hard work that made this country great.
In the Great Depression we had chickens in the backyards of everyone out there, we had an agricultural base with people sharing what they had. Today we have none of that with very little knowledge of what it takes to survive with no income to speak.
My parents lived through it and instilled in me that one should always be happy for what you have but I don’t see that today in the younger population 18-40. I want more and will spend everything I don’t even have yet to get it!!!!
I’m afraid it’s going to be a brutal 10 years or more before the lessons will be instilled into the culture. By then our Washington leaders will have traded fascism for freedom.
With incompetents running the government and Congress only taking care of special interests, in order to get re-elected, there is little chance the economy will be rescued. You are being generous if you think anyone in Washington cares about the people.
The deliberate destruction of the United States is under way. It will be interesting to see who will be left standing. The next three election cycles should tell the tale, 2010, 2012 and 2014. If the current trend continues your best solution is to pray to your God for deliverance.
We’re going into a DEPRESSION. There is nothing the government can do to stop it, but there is plenty the government can do to make it worse, which they have already done by throwing a trillion $ at the bank problem.
Martin: What Obama, Treasury and the Fed have done is truly frightening. It will end in the collapse of the dollar and its consequent hyerinflation reducing the standard of living for all Americans. But, I guess, that’s what happens when a country goes from capitalism to communism in 11 months. Obama is a disaster.
Kevin M.
You nailed it “The foundation of this so called recovery is on very shaky ground”.
I totally agree 1 million percent!
Biggest surprise of 2010 will be:
1. g-20 announcing a new world currency or regional currencies devauling all currency, some like the dollar much more than others. Gold and or silver may be a part, but either way, they double in value.
Yes, Top man again with all this Info and im sure your right but where would we all be without Money and markets ?? and the truth about whats really going on in Goverments and what lies they tell us,
We here in England also have to put up with the added problem Gordon Brown ??? and belive me that is a problem for us,
Johno
Thanks for the most reallistic portrayal of today’s economic environment. I read your articles every morning prior to starting my day.
Scott
Dr Weiss. thank you for your insights. The longer this economic episode lasts the greater value your organisation’s independent voices become. May I take issue with one point which is an exchange of “coincidence” for “consequence”. Your extrapolation from Jim Grant’s numbers about the application of greater fiscal stimulus might be proof of the worth of the stimulus in containing the level of contraction rather than government over reaction. If the contraction had been worse and the spending less – would that have been a better policy?
Your thrust, however, is excellent; the inventory cycle and government fiscal stimuli are overwhelming factors driving any talk of growth.
I like the point about equity investments crowding out non paper credit. Although Goldman Sachs bonuses are more moral than economic outrage, they point to a distortion of the flow of capital. Might it be possible for the hurried conversion of Goldman Sachs and Morgan Stanley into commercial banks to be reversed? If part of the sector’s problem is a lack of competition and if systemic risk due to certain firm’s increased daily VAR being worse than a year ago then might it make sense to deflate slowly this particular bubble?
Tom
The bottom line to all of this is that the average guy on the street still lives on, and depends upon credit. Few out there are debt free and in a position to go past a certain degree of time with lowered income due to either a job loss or as in the case of business owners; drastically reduced sales/bottom line income. That is the reality of the world we live in now. People are drawing down on savings, if they have any at all, or they are robbing Peter to pay Paul.
The next down wave will curtail the ability of consumers to do much more and as such, I believe we will have a compounded effect down which any future government stimulation via ‘home buyer credits’ or ‘cash for your new car’ will be met with very limited takers. If we go down hard a second time around, it will be enough to not only wake people up to the smoke and mirrors MOPE as Jim Sinclair calls it, but scare the living hell out of them. If this is the case, it will open up a new set of issues which the government may not be able to handle.
The banks are making a bloody fortune by borrowing at historic low rates and investing for a 3.5% spread minimum and minimal lending to stimulate economy. Geitner this weekend called for the banks to start lending the more than trillion dollars in their accounts. This will not happen unless the stock valuations for the banks rise substantially and further writedowns are taken. This is a viscious cycle and can’t make any headway until banks break with their hoarding and begin to lend to small and medium size businesses. That is where major stimulus is needed!
leave it to the politician to destroy even a good idea whihc is universal health care. for it to work without destroying the economy we need to have universal electronic portable medical record alone decrease the redundancy of testing, second tort reform to control the cost of litigation and defensive medicine[i do not preach to aboilsh malpractice but let not demagogue lawyers play on words to increase their wealth] thirdly control the overhead cost to process claims, marketting, actuary deteminations of rates,and control the stratospheric cost of diagnostics and treatments[e.g. using a pacemaker in the range of 20k rather than a 2k which has less bells and whistles or forcing drug companies not to sell ther products at differential pricing]finally create a real system of pay for performance which would put the provider and the client at risk.
The Government is slowly creating an unsustainable system of recovery because the stimulus is more than that; it is welfare for the rest of us. Unfortunately it will have the same consequences…making us totally indebted on the government as it robs us of personal initiative, creativity, and responsibility. When we lose our job, who do we blame? When we lose our life savings in the stock market, who do we blame? When our house loses its value, who do we blame? When we experience a natural disaster, who do we blame? When we get the flu now, who do we blame? When businesses fail, who do we blame? When we can’t pay for rising medical costs, who do we blame? When we become overweight, who do we blame? All proof of our slow but sure demise as a society.
I Recently asked if you had changed from your recomendations in the last newsletter where you recomended selling the short QQQ Proshares and was advised that that recomendation would stand. This deems contrary to what you are saying lately. I know that there are short term corrections, but do you really feel that the market is going to rise overall?
I wonder if we may get whipsawed by moving in and out of a fluid market where it seems that the end result will be a much lower overall? Would we not be better to ride out a significant bear market rally?
How will the U.S. recover from the debt explosion we are faced with. Realistically, we will need a change in our culture, a financial collapse, a political revolution or all three to cause us to turn things around. Our current and future debt is not a sign of wealth as Rep. Pete Stark states; rather, it is a symptom of profligacy on the part of the US govt. and the American people.
Martin,
As usual, I value your common-sense approach. It’s taken me nearly two years to finally get my “gut” feeling on the state of the market. Admittedly, it was easier during the Bush years with pro-growth private sector oriented policies that promoted real growth. However, by early 2007 I felt I was facing the last year of solid growth for a while and that it would take me a while to get my bearings adjusted to the state the market was headed in. However, I had your book Crash Proof Profits back in 2002-2003 and always had my eyes on the deeper issues brooding.
Finally, thanks to your new book and continued vigilance, I have a good balance of using a gold based ETF, petroleum based ETFs, a commodities based investment, and a good chunk of my 401k & Roth IRA in 90-day t-bills, I believe my core investments are set to stronger earnings in the coming months and I have the cash to put invest in other opportunities as they arise.
While I didn’t get out of the 2008 credit crisis unscathed, I got out with 80% of my 401k and retained all of my contributions, employer matches, and 66% of the earnings I obtained from the time I started the account in 2002. I’m feeling quite well about retaining the value I have and even expanding it further in the coming months.
Causes of the Great Depression and the “Great Recession”
As a student of the Great Depression and it’s causes and the mistakes made in policy to recover from it, I can’t ignore the similarity of the root causes of both the Great Depression and the “Great Recession”. While the Weiss groups seem to have a singular focus on fiscal and monetary policy which seems to be unsustainable, the real cause is monopoly capitalism aided and abetted by deregulation, laissez-faire government involvement, non-enforcement of remaining securities laws, reliance on bogus “trickle-down” economics and mindless trade policies. The basic college Economics 101 teaches that an efficient free-market exists when there are many sellers and many buyers so the market sets the price and units are produced up to the point where the cost of producing the last unit equals the price for which it is sold. Reaganomics, which has been the Republican Party Platform since Reagan, with its’ recreation of the economic principles that caused the Great Depression succeeded in recreating those conditions. And surprise, surprise, we get the same result.
I would think that the Weiss group would seek to identify these root causes of these economic disasters and would advocate applying the remedies of the past lest we repeat yet again these disastrous economic consequencies. A sound dollar is not going to occur without these fixes and we have a political party which seems to advocate depressions with its’ economic policies.
Teddy Roosevelt the trusts! Re-regulate monopolies or bust them up with anti-trust law! Investigate and prosecute the rampant fraud on Wall Street and with the Banksters! Enforce securities laws (elimate naked shorting, derivatives without the underlying ownership of the commodity or capital good, dark trading, etc.). Restore complete public transparency in the markets for all financial instruments! Elkiminate abusive holding companies by restoring holding company laws! Educate the public over and over and over that Reaganomics, monopoly capitalism (Libertarian Economics), does not work and causes economic disasters and Somalia is a case study.
10-15% correction, then uptick to two weeks before Xmas, then commercial real estate will suffer as they will have a hard time getting mortgages refinanced (am surprised it hasn’t happened yet) due to bad holiday sales, low inventories, price cuts, store closings, rental and overage rent revenue dropping, tax valuations dropping! Are government bonds the only recourse?
Have been looking at buying a new SUV…dealer inventories for the Toyota RAV4 and Subaru Forester are down or only have higher end models. Toyota says Japan is ratcheting up production (and Canadians are also); three (countem “3″ Forestors on one lot and none at another dealer. 8 Ravs but all over $27K. Can’t get a straight answer from salesman except more cars are on the way, can’t keep them on the lot, etc. etc. Are they still sitting on the docks in California? Starting to lease again. Salespeople are very non-aggressive!! They don’t keep in contact or don’t call! May be different at a GM or Ford dealer but not the same at Toyota and Subaru.
I have been following all of the excitement about the GDP with the same skepticism as you. I believe that the number is even worse than your breakdown. I have not seen anyone mention another component of the cash for clunkers debacle that certainly added more to the GPD. All of the commissioned sales people as well as managers and owners of dealerships made more money in that short stretch than they had made all year. Would it not follow that they would then spend a portion of that money to purchase items they would not otherwise have purchased? As a commissioned sales person in another field, I can attest to the fact that they do. Wouldn’t this make the false GDP number even more false?
I believe that we are in for either a “lost decade”similiar to Japan or a depression on a global scale.I am a reader of Money and Markets and I live in the UK
Martin,
I agree with your analysis. However, the question that keeps coming to my mind is why are we so willing to except the numbers from China as accurate? Since the govenrment in China contols the economy and information with greater involvment than in the US isn’t it plasable that there statistics are even more bogus than ours?
Marty Eigen
Please discuss the value of foreign bank accounts in places like Brazil, Australia and Belize. I am speaking of legitimate accounts, not secret ones
Martin you are so right in your thinking, when in a couple of years one looks back, and sees what happened. History will show only a very few realized what was happening, and most of the others will be bust. You and your team are doing a great job, ok, you can not always be 100% correct all the time, and your prognoses and forecasts are excellent, and explain clearly what we can expect in the next months and years. Keep up the great work.
Many thanks to you and your team.
Dermot
Dear Martin,
As a small investor I value your analyses, which to me are truly independant and always face facts.
The big problem with governments, their goal is shortermism e.g. eyes on the next election. Long term planning seems anathema to them if electors have to go through an initial pain barrier before reaping the fruit of their planning.
I have a Biblical world view which is centered on the expectation of a major war coming any minute to the Mideast. For this reason, I believe only investments in energy resources and precious metals in the United States, Canada and Brazil make economic sense.
I believe the investment in the energy and precious metals sectors should be in company stocks rather than in the raw commodities because I believe government will prevent the investment in or the holding of raw commodities [oil, gas, coal, uranium, gold, silver, platinum, etc.]. Thus, I believe investing in the stocks of companies in the energy and natural resource sectors should be today’s investment policy.
The stimulus is just stimulating those in Washington who wrote the package. It has not led to any sustainable job growth. I believe we are going to to see a “W” recession curve and another call for a second stimulus, which should be voted down, if possible. Nothing will change until the elections of 2010 & 2012.
When will World Trade dump the dollar? We all know it’s coming and when it does, where are we going to force feed our debt? How many trillions of dollars are left on the docks of exporters per year? What happens when this ride is over? A study of the effect this event had on England would be interesting.
Thanks to you and your staff for keeping me focused. I was all out by 1/2/08 because of you…..now only in oil, natural gas and commodities.
Any suggestions?
I read your group religiously.
Thanks.
Steve
Martin: Are you still recommending short term bond (90 days) Money Market Funds, Gold and Mining shares , Pensacola, Florida Do you consider MMF as cash?
Dear Martin,
Thank you for the great stats work and your interpretations of those stats is fantastic. My comments are as follows:
Please follow this line of thinking as it is vastly different from mainstream America- There is no problem with the economy at all. There is, however, a group of self serving individuals in Washington that are simply trying, for what ever reason, to take over the government for their own purposes and loot the treasurey at the same time. The issues of Health Care, Net Neutrality, Cap and Trade, constant wars etc. are simply issues meant to distract us and further their agenda.
Laws on the books and the constitution are being ignored or these individuals would simply be thrown in jail and that would be that. With out the immense theft and misdirection of public resources the economy would quickly return to normal. History will look back to these days and wonder why, with so many prior examples of groups trying to take over governments for their own purposes, then destroying that government/ country and finally getting kicked out, that we did not see this coming and that all we did as citizens was to talk about it, vote, and have rallies.
Since the electoral system has been so thoroughly corrupted the only real question of importance is how to get the corruption out of Washington. No new legislation should be passed until this is done. Time is quickly running out before our country is perminently damaged.
Thanks for listening- Steve Morris
GOLDEN RULE : He who has the gold rules
You recommend cash. I agree. Why do you not also recommend taking advantage of current low interest rates and load up on cheap credit to pay back tomorrow with the devalued dollars from ultimate inflation?
why is there no more talk about gold going thru the roof in the future. Is this purposely held back because certain entities do not want the average joe to buy gold?
Martin,
Well said of you morning read about the Hoax of these next years. Having the info available of a Harry Dent Advisor, along with your info, I have been preaching this sermon to my clients, friends and family. Hope as a support arm of investing, is a terrible support structure of a bridge to recovery. It has no real steel, bolts or cement…. It does have a blueprint from a non-qualified engineer, from the University of D.C. It will grow weak over a short time and fade away…. while asset values fade away, also..
God bless,
WarHog
I don’t believe the current U.S. economic recovery is sustainable because I don’t believe it exists in the first place. Our country is simply remortgaging its future, touting the dollars loaned to it as “wealth”, while ignoring the ever-building debt that lies beneath these loans.
My vision of the future is the same one that Larry Edelson has: creation of a supra-national currency that cannot be debased or manipulated by any one country. This will hopefully (1) create a stable unit measure of wealth, and (2) more importantly, force governments to honestly account for their inlays and outlays.
Like a spoiled, insufferable rich child sent to live with a poor country family for a year, hopefully the world — at all levels, national, corporate, household, individual — will emerge as a better, more honest, more sustainable entity.
Mr. Weiss,
Thank you for asking the question. Below are trend predictions evolved from diverse reading in combo with my “women’s intuition”. Wish they were more positive:
1) A major inflationary spiral 2010. b. Blow back on Obama for overspending.
2) Riots by those who are barely surviving now, but who will not be able to afford to eat end 2010 – 2011. (I believe food, gold, silver, alternative energy will be the places to be invested. Own property outright but put in some corporate name. Farm it somehow if large enough. Take continuing ed in alternative energy or medical fields or organic farming and learn Chinese.)
3) Something will happen to Obama 2012. b. Class warfare will ensue.
4) More terrorist problems could be in the mix over the next few years. Problems with China wanting to collect their debt will be on the way. China will feel we owe them payment no matter what after they have seriously damaged their environment in the course of manufacturing junk for USA.
5) Possible fascism after next election 2013; or possibly before via national emergency. Elimination of “useless eaters”.
References for above predictions:
A: Shock Doctrine by Naomi Kline (use of economic shocks to foster corporate interests)
B: Confessions of an Economic Hit Man (story of one agent’s work in 3rd world)
C: Dark Ages America by Morris Berman (effect of electronic age on social fabric)
I believe that Obama has good intentions just not good advisors (some of his advisors are corrupted and not working for the good of the people). Our president has no time to read independently anymore, so he has to take them at their word. He is being duped. Pray, pray, pray for Obama’s protection through his term. It will be much worse of something happens to him.
God bless you too Mr Weiss,
Barbara
PS: What do you think of the MERK fund???
Dear Martin,
The USA is, by far, the largest holder of gold reserves in the world but the value of these reserves is never mentioned in any calculations or comparisons. Doesn’t it play any role at all?
Best regards,
Jos.
PS I really enjoy your e-mails and the Safe Money Report.
We have to first make the clear distinction between the economy of the country and the financial system.
The economy of our country is the result of having available natural resources/commodities whether locally or from abroad to be used to cover the demand for basic products and materials of our nation.
The financial system is the way we created to fund both the producer and the consumer, to keep the cycle in motion, preferably in a spirably way, meaning in an ever growing mood, not in circles but spirals.
When both the economy and the financial system support or feed each other, then our system CAPITALISM works for the benefit of our nation and as a collateral benefit for the goodness of our suppliers and buyers overseas. Under this scenario job creation and labor utilization grows steadely but rationally not as “peaks and valleys”. And by only comsuming what we really need we protect the future exploitation of our natural resources and the environment of the planet where we live.
When we distort production of cereals, grains, meats, etc.,distort artificially the production of mineral, oil, cars, computers, shoes, and all other “non essential accesories”, then without doubt we are willingly or unwillingly under or over utilizing the benefits of on time financing and credit, the consequence are usually unmanageable.
According to the so called sacred history, Eva the first woman, once she heard of the power of the “forbbidden fruit” she wanted to have that power too, in her greed she wanted to not only have the entire paradise for herself but she also wanted to have much more, so now we can give her the NOVEL PRICE FOR UNIVERSAL GREED. Well, that is exactly what Savings and Loans, Freddie Mack and Fannie Mae, the Citi Group, Bank of America, Goldman Sachs, Lehman Brothers, Merryl Lynch, Bearn and Stearns, ENRON, AIG, GM, Maddoff, Sandford, and all others also wanted to have more; they already have the paradise: the USA, but they wanted much more.
The lesson we should learn is that greedy attitude is what brought us into the sink hole we are. Unless we clean up the corruption in our capitalism system, the Eva’s of our time are there to destroy us. We have to thrown them out of our paradise now.
We need to rationalize comsumerism, we need to upgrade our democracy, we need to clean up capitalism.
Capitalism is not synonymous of piracy, is not synonymous of exploitation, is not synonymous of bribery-greed-ineptitude, corruption or laziness.
We as a nation have the resources, the technology, the management, the system, the skill labor, the infraestructure to do it again, just lets clean up DEMOCRACY AND CAPITALISM.
Sincerely,
Jose Paulo Castro
Forest Hills, New York
It’s hard to believe there are so many “stupid” people running our government. Therfore I believe they do know & INTEND to destroy us. We have all known self-destructive people & this is an example of birds of a feather.
Bankruptcy. Collapse.
Nowadays,it is better to think twice before acting with money as it is not easily to gain and acheive it specially now when we are facing moneytary difficulties and in some coutry famines and war,thanks.
I think the ‘recovery’ will last until a few days after Israel bombs Iran (probably this winter). The estimates are oil at $200-300/ bbl and gas at $5-7/ gal. Think of how that will affect a ‘consumer driven’ ‘recovery’. All indications are that the Israelis are deadly serious about stopping the Iranian nuclear threat and the Iranians won’t stop voluntarily. With China and Russia recently announcing they will not support serious sanctions, it appears that both nations are determined not to turn aside in this game of ‘chicken’. As such, one hell of a wreck is nearly inevitable. Speculate in oil and gold IMO.
Keith
I am a subscriber to your services. One of the stocks I hold, which you recommend, is GLD.
There is a recent report in Market Skeptics dated 29 October 2009. As follows:
In the last three weeks, significant irregularities have appeared in the gold bar registry of GLD, with the length of the published GLD bar list going from 1,381 pages on September 25, to 208 pages on October 2, then back to 855 pages on October 14.
Is this still a safe ETF to own?
This is still mostly a learning experience for me. I have become a contrarian. Our leaders have mislead and mismanaged. THe people will suffer badly. Thank you. Anthony
You and I are riding the same horse. You depended upon the sagacity of your dad, supported by his 1929 experience, to give you incite into the current situation. I was 7 years old in 1929, but I can still remember throwing my dad’s copy of the Telegram out of the window to keep him from seeing what he already knew. You and I have both benefited from from our dads’ experience. My only 2008 loss was a $10,000 investment in Lehman bonds. That loss was offset by other investments in three gold funds. Just keep on doing what you have been doing : relying upon your knowledge of past experience to guide you through the maelstrom.
It is hard for me to envision anything but a decline of our freedoms and lifestyle in America. We have elected the enemy and much of our government and its people seem not to understand the implication of this. We will give up our freedoms and our financial independants ultimately. Our only hope is a voter revolution at the polls in 2010. As I have read the blogs on this site most everyone seem to feel the same way, to some degree or another. This is the people talking and they are not happy or confident. To my mind, we are in for a very bumpy ride in the near term ( 1-3 years ). Our vote may be the only thing that saves us, and if our vote does not go the right way we will loose much of what America was all about in the first place.
Well, the way I see it is: upward movement for awhile (stocks and the dollar), then a long slide into night. Gold and silver will rise along with inflation. We could in for some real social upheaval in the future. Take prudent precautions now. Good luck.
You and I are riding the same horse. You depended upon the sagacity of your dad, supported by his 1929 experience, to give you incite into the current situation. i was 7 years old in 1929, but I can still remember throwing his copy of the Telegram out the window to keep him from reading what he already knew. You and I have both benefited from our dads’ experience. My only loss in 2008 was a small investment in a Lehman bond fund. That loss was offset by gains in three gold funds.
Just keep on doing what you have been doing: relying on your knowledge of past experience to guide you through this maelstrom.
A RESPONSE
THE GREAT RECOVERY HOAX OF 2009-2010
I could not agree more. I have watched as the Plunge Protection Team buys more and more bank and financial stocks and thus gives the bankers more capital through the back door. No wonder they are, again, ready for big bonuses.
In response to the rising market, the Buffalo News recently asked, in an article named “Money Mystery”, “Who is doing the buying? No one knows for sure”. It’s not the mutual fund investors, nor companies or insiders, These are leaving the market. It would appear that the PPT group is working to build and keep the market at the 10,000 level to give the appearance of a great recovery.
One thing they have also succeeded in doing is to raise the P/E ratio into the stratosphere with rising prices and falling earnings. Hence the next crash should be truly spectacular.
We forget, or have never learned, the source of all wealth: All wealth is created by hard working men and women in factories, on farms, in construction, and by the gathering of raw materials. There is no other source of wealth. All other financial activity is merely the transfer of wealth.
During this past year we have lost two million manufacturing jobs, one million construction jobs, and farmers are going broke all over the country. Today, all of us, and especially our government, are spending far more wealth than we are creating. We have mortgaged or sold the assets of the country, and ourselves, extensively, to maintain the spending level. It cannot be sustained and thus will crash – probably in a grand debacle. Moreover, we have lost much of our ability to even know how to create wealth, let alone produce wealth. Thus the road to real recovery will be long and hard.
Kean W. Stimm keanstimm@gmail.com
I don’t believe this recovery is sustainable in the long term but in the short term the Government will keep it going with it’s printing presses. Once the stimulus money has worked its way out of the economy, the ultimate and final correction will rear its ugly head. It probably won’t be until 2011 however, that we finally do hit the bottom with the DJIA probably settling in at around 4000 based on the S&P selling for an incredible 140 times actual earnings today. The average American doesn’t seem to comprehend the magnitude of the debt this country has run up and probably won’t until it hits them with double digit inflation and higher taxes to force them to pay for this debt. By then it will be too late to remedy this debacle.
In the short term though, the LEI’s will continue to lead people to think we are in a sustainable recovery even though we have not yet seen all eight LEI’s go positive for one quarter, something that every previous recession has seen. Let’s not forget either that the global recession must also be sustainable for a real recovery to take place. The only kink in the armor here is that much like the U.S., almost every country in Europe and Asia has likewise poured billions of dollars of stimulus money into their economies and when that runs out, they too will join the slide down. Bottom line: No economic growth is sustainable without the consumer spending money he has saved and invested and earned, not borrowed on a home equity loan or charged to a credit card. That won’t happen until this country deleverages and rids itself of its unreasonable and obscene mountain of debt. Factories won’t invest either because they can’t sell their goods to consumers who can’t buy. Look out Japan, there’s a new kid in town about to make your lost decade look like a Sunday picnic.
The United States is sinking like the Titanic,albeit slower,but nonetheless we are drowning without a life jacket………Buy BEANS for bartering,water and supplies for an emergency.Our enemies know we have a weak President and will strike when we are suffering the most.The dollar collapse is imminent-and the stage has been set for a perfect storm.Only God can deliver us out of this disaster!
The biggest threat is clearly inflation – higher interest rates higher costs of equipment and supplies – bigger competition for global resources. Better to plug variable business costs as best as possible now to weather the coming storm.
It is known by the powers in charge that monetary expansion is the only way the hold their game together. Run up stocks, quant easing to keep bond rates low, provide capital for their favored industry, finance, so the market manipulations can continue. A devalued currency and low interest rates will cause great harm to most people but the game can go on. Along the way bonuses will be paid to the insiders as the productive segments are staved for capital. When the end comes assets for pennies on the dollar.
Thank you, Martin, for all of your sound advice. I am (perhaps like many) the guardian of a very modest retirement nest-egg, and my main concern is not to have its value evaporate. After doing pretty well on European and emerging-markets equities funds in 2005-2006 (which didn’t take either brains or luck), I went out of the markets in early 2007 and also sold out of a second apartment that had been bought for use, not for investment (but which turned out well) and put everything into cash, in various currencies, principally Euros, and removed almost everything from my Icelandic bank (I live in Iceland). That has worked out well, compared to most strategies; but now the question is whether cash itself doesn’t present a tangible risk of dilution, and my holdings are also not keeping up with the existing degree of price inflation. My belief is that, fairly soon, the dollar will take a major bounce upward and equities and commodities downward; but, just on this point, sensible people seem to be seriously divided, many of them saying exactly the opposite. I would like to put something into gold but am unsure when the right time for that would be. Gold has not had the same kind of run-up in Euros as it has had in dollars (that largely reflects dollar deterioration) and is well off its February 2009 high, seen in Euros. If the dollar is really going to take a big bounce up, I would like to do something to retain the current high exchange rate of my Euros; but, again, that’s just where the big uncertainty lies. Any thoughts on this?
Unfortunately,Americans deserve what they’re getting.They elected Obama Claus because he promised them something for nothing.Obama was a known entity before he was elected.He is doing as expected,growing govt.The U.S. is just like all former empires that,eventually get rich,get lazy and then decline.Nothing new here.I believe holding real money,gold,is one way of protecting yourself.Only enough U.S. Dollars for emergencies should be held.Dollars are the common stock of the country and will decline as the country declines.Even China,who likely will take over as the world’s largest economy has a totally fiat currency,so this will likely be very bullish for gold.
When we reach reality, rather then the current perception of reality, probably in late 2011 or 2012, The Dow will bottom somewhere between 3500 and 5000, and an ounce of gold will easily buy one share of the Dow. Regrettably, at that point we may have evolved into a 3rd world country. We appear to be in the twilight zone, a sad state of affairs.
Consider silver!! In my opinion silver is definately underrated at the moment. Silver is in short supply. China and India will be demanding more of it in coming years. Silver is lagging behind gold as far as an investment (gold is still a good hedge too). So in my humble opinion you will see a better return on silver. Silver is the sleeper. Silver bullion and Canadian mining stocks are a great way to hedge again the coming inflationary period.
Could it be that the reason we haven’t seen rampant inflation is the “lack of demand” on the part of the people? When we loosen our wallets, we had better start duckin’ at the same time……
I believe that this down turn in the goverment is going to lead us into a dictatorship. With the military in the streets again to keeep order, exactly what we fought against in the fight for freedom. People are going to have to again live off the land and grown what they need for food and clothes. All the old skills that people of today has felt was old fashioned will again be needed. I pray this country dont go down that far but I feel it is a matter of time before we find the bottom of this mess. To many lies has been told and to much sweeping under the rug to keep us from finding out the truth. Even the laws they hide in order to pass because of the fear the goverment has for the people. A dark time is coming can we survive it or will it consume us as a nation.
I am 62, widowed many years, house & car are paid for and have to live on disabilty and soc sec from my deceased physician husband. I have just over $100,000, 80% in 1 year CD’s and rest in money market at my local credit union. I have very little debt…am told I only have until the end of this year (2009) to invest in a market lock annuity with ING insurance co with a guaranteed lifetime yield of 6%, paid monthly. Should I do this? Thank you, C.K.
Because of your invaluably forsight I was able to stay clear of the market and look like a genious in the eyes of friends and family.Where you are different than the rest is your honesty
God bless you
My impression is that, since the creation of the Fed Reserve, our banking system is one giant ponzi scheme.
Given the direction our current leadership points to and the global fiat crisis, my belief is that gold and silver will save the day.
Martin,
As US and International -Debt to GDP Ratios- continue to expand, I am concerned about a World Currency Crisis.
“Where can the individual go” to protect their Capital?
Cash? Which international Currency is likely to survive?
Metals? Volatile.
International Markets? Do they have the industrial base and political stability to recover? Many also seem to be over valued at this time.
Domestic Markets? Where do I begin to Criticise…..
Pensions are nearly extinct.
Where is the “Magic of Compound Interest”.
How can Americans save for Retirement if the interest rate is Zero?
Am I witnessing the destruction of the American Middle Class?
Not only is the supposed recovery a hoax, but the whole Us financial system is a hoax.
Why would anyone buy stocks at ridiculous P/E’s when the stock is just a piece of paper that has no more value than what some market maker or Wall Street banker such as GS give it. You cannot buy anything with it and since moct pay no or very low dividends any gains are dependent on finding a bigger sucker than you to pay more for it. When prices of stocks (aka false rallies) are manipulated or at least overly influenced by slanted news, the Gov’t and big Wall Street crooks any stock investing without tight stops is foolish.
The US $ is also a hoax and being printed by Bernanke by the truck loads and the value has to decline in the long run, especially when other US monetary polices and massive debt will destroy them and prove they are just little green pieces of paper with no real value. It is interesting to note that the FED is using US $’s to buy the IMF SDR’s. which tells you what even our gov’t thinks of our currency.
US Treasuries and interest rates are also a hoax with FED QE programs holding down interest rates artificially to prop up values for Wall Street traders and poor liquidity into all the wrong places.
It is clear to me that the best way to combat all of these hoaxes is with what one pundit calls the modern balanced portfolio Gold, Silver, Food and Guns.
Hi Martin,
Good question. I did not beleve we could keep the balls in the air this long, however, here we are. Tech bubble, real estate bubble, treasury bubble……..who knows what we might invent next to keep things going.
My guess for the future is:
1) The appearance of a recovery will be continued through at least the end of 2010.
2) China and the others who have benefitted greatly at the expense of our manufacturing industry will take what actions are necessary to reduce reliance on exports and stimulate internal demand.
3) Interest rates on US treasuries will rise substaintially
4) Oil will hit $300/bbl and gold will hit $5,000/oz
I think that the governement has been doing all that it can to fight deflation which scares them much more than inflation.
Hi Martin
My wife and I have been in business for 34 years. Our advancing years and the poor business environment has forced us to retire. At one time we had several office locations and were doing very well. Finally, last week we closed our last office because of the economic downturn. For the sake of the country, I hope our situation is the exception and not the rule.
Bill
At the most elementary level; under a false sense of security individuals will chase after profits and get caught on the economic downturn, thus derailing any possibility of real recovery.
Whatever happened to “don’t fight the fed”? Do we have serious, valid alternatives to what the fed is doing right now? Are you going to stand on the street’s corner with a crockpot and a ladle, feeding the destitute, if Bernanke returns rates to 5% or more?
As Roubini just posted in the FT, the US Dollar is now the monster carry trade from hell.
This will at least throw cash into the developing economies, and however un-smoothly so, reduce the living standard imbalances among nations. At home in the US, we should see a regain of manufacturing from more export-favorable exchange rates.
History will tell you. President Johnson borrowed and printed money as he created a “Guns & Butter” economic policy. The dollar fell by 67% in value during his term in office. All essentials, especially FOOD became more expensive and we created a real hunger problem in the US. Not to draw the wrong conclusions from history, but with the extra financial pressure on the truly disenfranchised, poor blacks finally resorted to race riots because of their lack of viable options. It was a sad time in our history that could of been avoided. Under Obamacare the marginal tax bracket for a family of 4 earning $50k /year will be around 70%. Some families will do well and their neighbor will be suffering because of the chance of being put on the government dole. Such disparities between neighbors will create massive resentment. The numbers are huge and the problem will be worse this time.
How can any politician look at themselves in the mirror?
Bradley Johnson
Chicago, IL
In general I have supported Obama; and I think what he inherited from his predecessors left him between a rock and a hard place. But I think the bailouts and infusion of federal dollars for recovery have gone too far and left us weaker in the eyes of the world. I think what we’re headed for is inflation, and dollar devaluation, and after saving all my life, I worry that it will have all been for naught.
I also think we need serious reform to prevent the kind of irresponsible behavior of financial corporations that got us into this mess in the fist place. I can’t see that we’ve done much of anything yet, to prevent the excesses and corruption of the past.
The myth in USA still is that US Treasuries avoid risk. Financial planners, brokerage houses, old-peoples’ funds, still recite the idea that one can preserve capital (or at least, lose capital more slowly) by lending to US Gov’t. With each swing into risk-aversion mode, a few more investors start pondering how true the myth can be, and fewer participate in the “risk-aversion” cycle. When it at last becomes clear to most that “risk-aversion” is extremely risky, hyperinflation will reign. I would not be surprised if this happened as early as 2010.
Martin – as you know, your father was a very wise man. It is always refreshing to see a son pay tribute to his father – not done enought these days.
I have been in the real estate financing industry for over 18 years, through many a peak and valley. I can honestly state that I have NEVER seen these this bad, from new government regulations, to banks hoarding CASH.
I saw another post here that talks of the coming commerical real estate bust, and they are dead on. If the residential collalse scarred folks, the crash in commercial will be 10 fold worse. WHY – because BANKS provide the funds to buy and refi commerical mortgages, and they are NOT renewing loans even at a 70% equity level! Second, with retail in America so effected, malls, will also collapse. A truely ugly scence.
With most every insurance company heavily involved in high interest REIT’s vehicle of one type or another, once these firms have to write/mark down these over inflated “ASSETS” it will be a blood bath plain and simple. This is setting up as the perfect storm. So stay in cash, buy puts against REITS and insurance companies, and hold on……………. we’re not in Kansas anymore ToDo
Excellent analysis, as always. I admire the fact that you call a spade a spade — no sugar-coating what’s real! (PS: Your Dad was indeed a wise person.)
I remain strongly bullish into mid-January based on internals.
The jobs recovery promised will never replace the ones lost and income from any newly created will never be attained. Consequently, the standard of living will be greatly reduced, consumers will buy less and keep the GDP low for years to come.
Banks are hoarding cash in fear of rising defaults and failure of meeting their Federal capital requirements therefore, lending will be tighten on personal borrowing and real estate both residential and commercial.
It is difficult to deny that all the Treasury’s printing of money will not eventually lead to inflation, the Fed having to raise rates to encourage national savings and to entice foreign lenders.
The economic scenerio I forsee is not a pretty one but, I hope I am wrong.
I live in phoenix, AZ and every where I go… Mesa, Tempe, Scottsdale, etc… Retail and commercial space is available for lease. The economy is hear is doing pretty good but it reminds me of 2006 up in Fountain Hills and out in Gilbert when I saw almost every house for sale on a single street. There is a small 10 unit commercial space building near my house that is brand new. The 10 or so palm trees around it fell down because nobody took care of them after they were planted. Someone “tagged” the back of the building and someone else broke a window in one of the spaces. Its a really nice area too, just nobody wants to be the first to lease out any of the spaces. I dont see how the economy can recover when I see this everywhere.
What the effect will be? Well…I like the way Jim Willie described it…he said “We’re being thrown down the staircase into the third world”. The bottom line is this….The American people once they have finally figured out that their way of life is OVER…they will never again trust anyone with their money until they see Bernanke, Paulson, and all the bankers in handcuffs and doing the perp walk. There are hellacious times ahead for these bankers, and all their millions won’t keep them from having to go hide in a rathole like Saddam Hussein. The hunt will be on.
It is easy to see that fundamentals are diverging badly from the economic circus. People are sinking into poverty; commodities are shrinking while humanity has an exponential growth. It is not only the economy which is going to explode, it is our civilisation.
We will never live like before; productions and specially agriculture will take back the place they should never lose to the profit of services. Industrial agriculture should have never have existed and will hopefully be the first market to be destroyed; local productions for local people, this works endlessly.
Industries will go back to “necessity”, no more sing-song nonsense productions.
Times are going to be hard to the ones who refuse reality, but it can be a great rebirth, providing meaningful life, because will be back to the core of life superfluous being outdated.
I’m not sure what the consequences of this great hoax will be but it will effect the whole world, an as for domestically this government will see civil unrest increase to the point of marshal law being declared in major cities. We have already seen tax revolt with the tea parties and I think this is just the beginning, we are seeing cities across the country banning group gatherings such as Halloween parties that two years ago were being sponsored by the cities.
the consequences? that’s easy…BIGGER GOVERNMENT!
i am reading When Money Dies:The Nightmare of the Weimar Collapse by Adam Fergusion and the book describes what is happening now in America.
how long does the dollar have to retain any value?
and if the citizens thought about what is happening would they act any different then the Germans? would the center collapse and leave us a choice between Nazi and Red?
well, let’s wait and see after the American middle class is left destitute.
bill
Most Americans have been dumbed down by the Main Stream Media and believe the “inept” American Government can rescue us from this Depression. Our Poorly run Government, Greed, Debt driven consumption, laziness, “Political Correctness”, and Indecisiveness by all of our local, state and national elected Officials have contributed to make the United States a new 3rd World Nation. Leadership in America is lacking and hard decision now must be made. With less than 60% of Americans employed, it is impossible for our ecomony to have any sustainable recovery.
Dr. Weiss, I agree with your analysis and what Mike Larson said on Friday. I don’t believe that this is a true economic recovery because it is based entirely on government spending.
The GDP showed positive growth in the 3rd quarter because of this massive spending. It’s possible we could see some growth in the next couple of quarters.
But so far, we have not experienced the costs of all this spending. When we start paying these costs – through higher interest rates and higher taxes – this will result in a huge drag on our economy. Inflation has to be in our future because of the Fed actiivity over the last several months.
I really don’t claim any sort of expertise, which may in some sense be an advantage. I learned some pretty silly things in grade school, but there’s one thing I think may have been correct, and highly appropriate to the present situation: In the “Roaring Twenties” people borrowed money to gamble on the stock market which in 20-20 hindsight was obviously a very foolish thing to do. So why are supposedly smart people still doing exactly the same thing now, (like the proverbial dogs returning to their vomit) “bailing out” the risk-addicted financial services industry instead of providing a more favorable environment for industries with high Keynsian multipliers? I suspect it is because a lot of voters were duped into letting the managers of their retirement funds gamble in high risk ventures, which then became an addiction…
I am waiting for the biggest bubble in history to pop! That of course is the long bond market. Any US treasury that is 10 years or more in maturity is going to crash. Our currency will eventually be replaced as the reserve currency of the world. Gold and silver will continue to rally and I believe that stagflation will be here soon. I give the Treasury market 2 years at best.
Martin, can you Weiss Guys shine some light on the pros and cons of my accumulating/holding cash (long $US), debt (short $US), foreign currency, foreign stocks and/or ETFs, commodity futures, gold/silver bullion, etc.?
To become a strong economy, you’ll have to produce sellable goods, which are either cheaper and/or better. “Goods”, meaning either produced by manufacturing or mining or primary industry (farming). Trading on the weakness of other peoples character in paper promises(options, hedging, futures etc) is not sustainable in the end, because there is no end product. Paper money is a promise of nothing, again based on peoples weakness for more easy spent. There’s a lot more to say about this, but this is it in a nutshell.
I read an email in recent months, I will try to find and email later but for now I will attempt to relay the points. Every civilization goes thru cycles: first, battle for freedom, than independence, (13 colonies developing into a country). Then thru the cycles of prosperity….our Great Nation grew! Then the cycle of entitlement, (Thank you Obama for speeding up the last nail in this coffin). And then a civilization collapses…… Something to think about.
I agree totally with you Martin,but I just cant understand how washington keeps this ponzi scheme going with goldman sachs controlling the treasery since 1992.In 15 years america has become a banana republic.I cannot comprehend the stock market,it moves inverse to the dollarand I am alomst completely out.I am from Illinois and obamba was state senator 1 term then 1 term in washington yet he had time to write a few best sellers to earn millions.people actually elect presidents on their smile and garbage they spew.After clintons speachin 95 that we dont need manufacturing anymore I knew all was lost.most people think its the president that controls the country,when its guys like greenspan,bernake and goldman.I figured I would be safe because I would be dead by the time things blew up,but sorry to say its happening much faster than i thought.We lost the cold war but just dont know it yet.Pretty soon we will have a hitler or stalin type government.USA the shortest lived superpower.Where’s IKE when you need him???
The most valuable asset that an individual can own is their home. Not everyone has an investment portfolio but most enjoy home ownership. When the heart of their largest asset is cut out (housing bust), it deals a life threatening blow, not only to their home investemt but to their way of life. If anyone thinks that there is going to be any sort of recovery after homeowners have suffered so severely, their only kidding themselves. Homeowners (including myself) are so financially stricken AND ticked off, they won’t do any serious spending for a long time to come. If you are waiting for consumer spending to bring us out of this abyss, forget about it !! The government acted in haste and now we will all “repent in leisure!”
The large banks, Goldman, J.P. Morgan, etc are really making hay with borrowing at the
artificial rates from the Fed and loaning with many %’s of profit. Also, I wouldn’t be
surprised that the drop in gold and silver prices last week were an attempt by the big
shorts to drive down prices so they could capitalise. The silver market is so overshorted that all the silver bought at todays prices wouldn’t make a dent.
Martin why dont you have a big rally through the Country so People must and the goverment to pay at least 4 to 5%interest to investors over 65 years who are retired and having less than l00.000 $. in CD or treasury bills 3 to 6 mos. only in one bank so they can be help in this severe , severe recession , since the or we are helping all the economy with our money. thank you.
I think the triple deficits (Federal, Trade and Private) coupled with more government spending and borrowing is unsustainable and will ultimately result in devaluation of the dollar because I can see no other way to reduce the debts other than paying them back with funny money. The defense is to short the dollar and long bonds and buy hard assets.
Hi Martin,
I agree that the rise in the stock market is a hoax and our economy is not recovering. I believe that there is a small group of people who run the fed who are intentionally destroying our economy. Their goal is to print more money and therefore destroy the value of the dollar. I believe that in 2 years the value of the dollar will fall to zero. and then this group of currupt people will get their wish of creating a new global currency. Their goal is to destroy america and the constitution and put in a world govt controlled by the elite international banks. The rise in the stock market are these banks who received the trillions of dollars in bailout money just recirculating the cash they received. They know they will not receive any more bailouts so they are artificially inflating the stock market to gain money to save some banks from bankruptcy.
The corrupt group of people who control our fed and are intentionally increasing our stock market plan on taking us into war with the middle east. They will pull out of the stock market at an undisclosed date and bankrupt america. Their goal is to decrease population by 90% within the next 20 -30 years and they would like to do this via starvation and poverty. They will destroy america if people do not wake up in time. They are the same groups that instigated world warI and World war II. They are now instigating world war III. They are they same groups that killled kennedy and are also involved in 9/11, oklahoma city bombing etc. These people need to be put behind bars to stop them from the disaster that they will be creating on this planet in the near future. It’s time to end the FED and put these corrupt internationally banksters (gangsters) behind bars. Not only did the banks loot our country but they are responsible for the financial backing of hitler,natzi germany. It’s time people wake up. The information and history we are getting from the mainstream is propaganda. It’s wrong and the real info is being suppressed. Stop these corrupt groups and international banks that control our fed and we will have peace on earth for the first time.
Hi Martin,
I’m sure that yor have read The Lords of Finance of the 29 crash. So it is easy to understand the fear within the Fed to try to avert a similar situation occuring. Far easier the run the printing presses now and postpone retribution and all that it may cost to a later administration
Regards
Ed
I WROTE A BOOK IN 1989 TITLED, “BANKRUPT FINANCIALLY, NOT MORALLY” AND I COMMENTED ON MANY SUBJECTS. CHAPTER 7 WAS TITLED “FREEDOM” AND THE OPENING SENTENCE READ,”I HAVE A REAL FEAR THAT WITHIN MY LIFETIME, THE UNITED STATES WILL NOT EXIST AS WE KNOW IT.” I HAVE SEEN NOTHING TO CHANGE MY MIND AND IT IS PAINFULLY OBVIOUS OUR COUNTRY WILL NOT BE WORTH LIVING IN IT, BUT THERE IS NOWHERE ELSE BETTER AT THIS TIME. WITHIN FIVE YEARS(AND MAYBE 2 OR 3) IT WILL BE OVER. THE BIGGEST PROBLEM WE HAVE IS OUR BALLOT BOX PUPPET POLITICIONS AND GIVING THE VOTE TO IGNORENT PEOPLE WHO HAVE NO STAKE IN THE ECONOMY. UNFORTUNITELY, THOSE WHO DO HAVE A BRAIN, ARE NOT WILLING TO SACRAFICE THEIR POSSESSIONS, THEIR LIVES, AND THEIR SACRED HONOR FOR FREEDOM; BUT THAT IS WHAT IT WILL TAKE TO HAVE A COUNTRY WORTH LIVING IN !
Let’s face it. Americans have lived in a fantasy-world for at least 50 years now and their fantasies just get more bizarre as time goes on (aided and abetted in no small part by its media). Well, the reality check is here guys.
Martain:
Thanks for being the warning voice for the U.S. Economy. You and your team are doing a great job. Keep it up.
My son in Florida called me this week and told me of a study that I thought you might have engineered. It used the numbers from the government’s multi billion dollar 1980’s Resolution Trust BAILOUT to clean up the S&L economic problem. I don’t have printed numbers, but he suggested that the monetization of the “PAYBACK FROM THE GOVERNMENT BORROWING” WAS THE BASIS OF THE 21-25″% INTEREST RATES THAT OCCURRED. I haven’t taken time to make my own study, but if you use the old Resolution Trust numbers and compare them to the new U.S. Government numbers in this new article of yours, it could show, according to my son, that interest rates, by comparison, could reach 107%. This theory really has merit. I hope you have some studies like this. My son couldn’t remember where he read his article recently.
All the Best to you and your staff:
Russ Marriott, President, Marriott Consulting, Inc. Salt Lake City, Utah.
I agree with most comments……….no recovery. I am a small business owner and have been my entire adult life. This economy is no longer sustainable, nor has it been for nearly two decades. I believe whole heartily that this is a deliberate takedown to usher in World gov.
Well, there is being right – and making money.
I watched my friends make a lot of money from the tech bubble – even though many knew it was a bubble.
Obviously timing is key, but a 10 year bubble is a bubble I should be a part off. I don’t think there is a true recovery coming – mostly because I don’t see how a debt and credit crisis is solved with more debt and credit. Instead of investing in productive capacity the government is buying non producing toxic assets, and encouraging Wal street speculation – but these facts meant that I missed out on a massive rally, and some of my friends did not – they are now in cash having doubled their money.
Help us make money!
I fear that the consequence of the Great Hoax will be WAR. The only source of American productivity and invention now seems to be with the Military. All else has been decimated.
Hi Martin,
A famous astronomer came to town and said that all the the cycles are in place for deep
correction, that most likely will take place within a few weeks. So your letter may be
a very good prediction as well. So accordingly I decided to be short for now.
Keep up your good works Martin
Regards
Victor
In December, there was over 8 trillion in cash,now,according to GS,there is a little more than 3 Trillion in cash.So,5 trillion in cash has driven the stock market,currency market and commodity market to it’s present bubble state.The cash left to carry “all markets” to higher levels has dropped to a dangerous level for anyone who thinks the above markets have a long way to go on the upside.I would be careful,I have taken my profits and will wait for a great buying opportunity.I will buy, XLE,BHP,PBR,GLD,JNJ, FCX,LMT,MCD,KO.,YUM.
I have been following Martin for years and his fundamentals are fantastic, however timing could be much better
Everyone here including myself can all talk a big big story about WHAT YOU THINK is going to happen and when and why but it’s all irrelevent. I will try to make this as short as possible. LOOK AT WHAT IS HAPPENING NOW. THE INTERNAL BREADTH OF THE MARKET
1 Stop looking at the dow, it’s only a handfull of cap weighted stocks that don’t take alot into account. Watch the S&P and especially RSP, which is the equal weighted index of the S&P. Better advice is stop watching money TV shows
2 If you think the market has officially turned to the downside on Fri Oct 30, then your wrong. The official day was Wed Oct 28. How do I know? POINT AND FIGURE CHARTING THAT’S HOW. Unfortunately this is something the Weiss team doesnt seem to use, it would make the service and timing so much better.
The nyse is the grand daddy of the index’s
The NYSE bullish percentage index shows what percent of 3k stocks are on point and figure buy signals. Before last Wed it was over 80%. That’s huge! It has not been that high since 2003. This is a system where time makes no difference and it is comprised of X’s ( stocks or index going up) and O’s (the index and stocks are going down). Losing key support levels. I could go on and on but I’ll spare everyone who reads this
3 The market is comprised of 46 sectors, autos, banks, chemical, precious metal and so on. Here’s a news flash for you. The precious metals sector went on a sell signal OCT 28
So now not only is the broad market going down but the precious metal market is going down with it. It may not get hit as bad as other sectors(relative strenth), but it’s still going down. How long? Who knows
How many people took a beating in the market? Not me, here’s why
Not only did I read all of Martin’s articles which were shouting get out, but here’s a few simple tell tales
Pull up a long term chart of the SP 500 (5-7 years) and plug in the 20 and 40 week moving average. They converged early in the year, meaning look out below. Also the price action was slashing through both the 20 AND the 40 week moving average, indicating a topping stage. A few more things pointed these things out but as always every party has to end.
There’s 4 stages of the market. upside, topping, downside, basing
To wrap things up, continue to read all of what Martin has to say, his global fundamental insight is unsurpassed and if you want to take it to the next level then learn point and figure charting. Investors Intelligence is the place to go. Now is the time to get bearish. It’s bulls and bears, not bulls or nothing
Thanks for reading, and remember THE TREND IS YOUR FRIEND
Peter Z
The current hype about recovery is a fraud because it is purchased with more debt. Witness the latest encouraging housing data for example. We are doing the same sleight of hand now with the stimulous of thousands of dollars given to first time home buyers plus submarket financing to move housing inventory. We simply cannot seem to understand that we are only prolonging the agony of excesses which have caused our problems in the first place. This is a continuation of selling properties to people who are unqualified, undisciplined and financially suspect. Government is the problem—not the solution. Further, the zero interest rate policies of the Federal Reserve are very destructive as they have been proven to encourage overspending, more debt and, eventually, only misery for our country and our citizens.
Martin,
I’m one of the ones that got laid off this past Decemeber, from the Automakers, I have recently landed a job through the government as a temporary. I have worked, at some of these local shops on and off for the past few years trying to get hired in.
The news keep saying that we are in a recession and that it is getting better, but I really don’t see it that way at all. They have only brought back a handful of people to work in these shop. With no possiblity of being hired in.
The government keeps putting all this money in, to bring back jobs in the area, but I feel it won’t last, and we will be worse off then we were before.
Interest rates on everything will go higher and higher, where no one will be able to buy anything. I notice just the other day that Sears is going to have layaway, to encourage buyers to layaway for Christmas. They haven’t done that in decades.
I feel we should have a recall on the President and get someone in there that has some kind of financial background, with leadership skills.
I can’t believe the current situation can go on for long, but the scary part is how long? Some amount of greed (hope?) may urge me to stay in the markets till about 10,500, but I get this feeling I should pull out cash and put the rest into commodities pretty soon.
USA Q3-09 GDP numbers have been announced just yesterday at 3.6% & if Q4-09 is also positive growth, USA will be officially declared out of recession. The official announcement cannot come before the end of Jan-2010. Should we wait for the event to happen or act before the event is the question? Every analyst is talking of recovery but no one is sure of the shape of recovery. Most people feel that it will be a “W” shape recovery.
Hence let us study the last W shape recovery which was in USA during Jan-1980 to Dec-1982. And compare it to the current recovery which starts in Sep-09 assuming Q4-09 USA GDP growth comes positive.
The last W was made of 12 months down trend which was followed by 12 months of uptrend from the official date of end of recession. The current down trend is already 15 months and if we assume that US recession is ended in Sep-09 (Q3 GDP being 3.6%) then there will be an uptrend now which should last at least 12-15 months and until dec-2010. The second fall and eventually W shape will take effect in 2011 and not in 2010.
Martin,
The recovery, if you can call it that, cannot be sustained. The consequence of this hoax will result in a market crash far greater than what we’ve just come through, and the wealth destruction will be far more massive that what we’ve just experienced. You yourself said a year ago that Bernanke could not prevent a depression, but could only delay it. Well, the Bernanke hoax and so called recovery has now run its course.
I was just re-reading your article, “Why Washington Cannot Prevent Depression”. Excellent analysis. Until now, Bernanke only delayed the other shoe from dropping in this depression. Time is running out.
This depression to be has been building for a long, long time. The bubbles have kept coming and been getting bigger over the decades. It seems that America itself is the next bubble to burst. The changes needed to right the ship are so drastic I believe everything has to fall apart before they are even considered. The only bright light here is the common citizen. There are still many good people here. Until the US takes responsibility and uses basic personal financial discipline the decline will continue. Don’t go down with the dollar! There are always ways to make profit in any economy!
Many are referring to this as the “jobless recovery”. Almost right – it will be the “job lost” period of the current economic cycle. A great many of these jobs will be lost forever and won’t be coming back. Systemically high unemployment will be with us until after the baby boom generation has passed on. Even then it will take a generation to return employment back to an acceptably new level in that new economy.
Fiat currencies that depend upon nothing more than faith and good intentions will be a thing of the past. We are now seeing the start of this reordering take shape throughout the global financial structure. Gold and silver will play a much bigger role in financial monetary agreements in the future.
For any purposeful and meaningful change to take place, the overpowering hubris and corruption that is present in most walks of society must change. This will be a grass roots societal change that will not occur overnight. For, indeed if it did would be violent in the extreme. Change must occur as generational changes occur. To be otherwise would be courting civil upheaval and great unrest that would lead to blood letting or even civil war.
In the short to near term leading up to these massive changes there will be much volatility and false profits. The way to a solid future is owning precious metals, precious metal mining stocks, agriculture in most of it’s forms, basic commodities such as copper, iron ore, bauxite, natural resources, water, forestry, aquaculture etc. Transports, railways and deep sea only. Stay away from airlines and most important stay away from financials as this is where all the volatility will be centered. As usual with any decisions concerning ones wealth – due diligence must be rigorously practiced with any and all avenues of investing. Good Luck.
A a nation of people, we have violated the Godly principles the nation was founded on, and can expect repercussions and worsening conditions until the people turn back to Godly Biblical principles. Very possible is a future in which grocery stores are empty, fuel is unavailable, and there is blood in the streets.
I think it wise to do some basic preparation for such a scenario, ideally, have a retreat with some survival supplies, and of importance is develop relationships with people of like mind and good character who are following Godly principles.
Our fiat money system is designed to loose value per unit. And as Martin says, the bumps in value do not rule, the decline will continue, and knowing that, we can parlay that into value, realizing, in the long run, only real, useful and tradable things have value. And finally, it seems people used to read the Bible more. And we should again.
Even if we could get a new super economy with China taking over etc would not oil skyrocket and collapse the economy anyway? If so then i guess the stock markets can only go down but societies can be saved through cooperation between nations. By erasing debts and simply printing the money that is necessary for important projects. I use to watch Larouches webcasts and he says this is the solution. Going back to Glass Steagal, erase the huge derivatives, cooperation between US, Russia, China and India and creating a new credit system between those first of all. Apparently China and Russia has already started in small scale by China using it´s US Dollars to fund infrastructure projects in Russia.
Hi Dr. Weiss,
You have helped me and my family so much….thank you! I have turned back to fundamentals because of your advise and am busy paying down my mortgage as fast as possible. Real wealth is not conjured it is the consequence knowledge, know how and hard work. Your consul has been life sustaining and your Wize advise invaluable to me and others. Thanks again!
Regards,
Judy
I am not at all sure about America, but here in Britain, it is possible to by-pass Westminster and the Treasury so as to avoid HMRC and direct Taxation altogether. And it is properly legal. I understand from one or two people who have lived and worked in the USA. that it is also possible to legally avoid direct Taxation there also. Some of the comments that “jen 11.02.09 at 5:29PM has to say, I have heard before on this side of the Atlantic and there is substance to them, but how much, I have no idea.
But this I do know, World Politics and World Politicians, are working to a different agenda than the election manifesto they declared. And it isn’t in the interest of the people. Thank you for the daily news letter and all the information you send me. Sitting here, it is priceless. Kind Regards, ATFlynn, “Norfolk’s Mutineer”
You ask to glimpse the future to reveal what will likely surprise investors in 2010. In a word, duldrums. However, politically what we have presentday will not stand. Too many folks are adversely affected by marxist-minded ’suits’ in Washington DC. The people will decide ultimately. Responsible adults and young voters with the eyes beginning to open like newborn kittens will prevail at the ballot box. And so goes the confidence of the markets when the current regime is ousted and a newer Conservative group of scoundrels come to power. The very best thing to happen to our economy is for it to fail so that soup lines can be a matter of daily survival. Then, maybe, maybe, people of all voting ages will clamour for a revival of Capitalism with it’s trickle-down effects so that individually each citizen’s personal economy will begin to recover. Let’s try weaning ourselves from the government’s coddling and once again stive to be productive and unshackled from regulations and taxation. Without doing so, we will simply be waiting anxiously for the next great hoax to come upon this nation’s economy.
Well, while it all seem very familiar and insiders follow proven pattern of how to get ever weathier and ever more powerfull at the expense of mainstreet and unprivileged, I strongly believe that this time it is not about money, prosperity, markets etc., this time it is about politics of the real rulers of this world. We are in for greatest chaos, poverty, disillussion, loss of future, literally, the shit is going to hit the fan and the hopelessness of tomorrow will be the mother of the totalitarian and corporatist New World Order created to destroy whatever is left from the ideas and limitations your Founding fathers incorporated in US Constitution. Who needs democracy, market economy, private enterpreneurship, speculation, small goverment etc. when down the dark and smelling tunnel Karl Marx and his bolshevik Trockyists and their ruling methods are lurking? This is about total destruction of US economy, US standard of living and balkanization of the USA. Accept this view from a 56 year old Czech businessman who had plenty of time to monitor and live in so called socialism, and witnessed first hand the carcer-like destruction of society into an unconscious primitive crowd of human slaves of no dignity and no freedom. Kindly, for your own benefit, study all aspects of October 1917 revolution in Russia and 1916-1936 development in Germany. And remember that Russia (since the end of Napoleonic wars), Germany (since the 19. cetury industrial revolution) and USA (until 1913) were the greatest obstacles to the success of NWO. As such they must be destroyed from within, by implosion. The real, unfalsified history shows the pattern. Hence, what you may consider in your upper echelons stupidity, corruption and by common sense unexplainable march to the cliff, lack of education and professionality, is actually carefully executed plan. By the way, who needs to own banks, when you own the system incl. IRS backed by force and tax receipts are your own tax free income? It is quiet out there, like waiting for summer storm. Expecting they kick the barrel early in 2010. Given the globalization, we are on the same Titanic full of failed promisory notes, derivative instruments, worthless currencies … and stupid hope that everybody else will get the shaft, but you will not. The lifeboats are long booked by banksters. Seek no logic, no sense of survival, no responsibility, no compassion, no humanity, no rights, no entitlements – for there is none in the era we are all entering. As Mike Larson repeats all over, it is a “sea change”.
Dear Dr. Weiss, Thank you for all your insight. I believe this bailout money for the banks and markets will get eaten up by the derivatives coming due in the beginning of 2010. The amount of debt will be impossible to overcome and the world is starting to dump the dollar because of our debt. Our central planners are leading us down the same road from the 1930’s. I wish they would use their Ivy league education to see that what they are doing is not working. If the companies with a poor business model would file chapter 11 and restructure with a new business model it would provide some hope. Unfortunately, we must protect ourselves with gold, silver, metal and oil stocks, and puts going out to March for other stocks and indexes. Thank you again.
Hoping for a better change. Karl V
You don’t drink yourself sober and you don’t spend your way out of bankruptcy. This will end badly. Unfortunately, I believe this man wants to reck our country so he can rebuild it from the ground up. We won’t recognize it when he’s done. This man knows what he is doing. There is a method to his madness.
Unfortunately you may be correct in your assessment of the situation. Some of your numbers match those of the Whitehouse.
The up side is that we can help improve this situation starting with the mid term elections in 2010.The people which control the Whitehouse at this time are detrimental to this country. In 2012 that can be changed also. To successfully make those changes some of the young and uninformed need to be reclaimed from the dark side.
The information of what is happening, what is being done to the country and the ultimate results must be published, republished, distributed, redistributed, told and retold until the light comes on for those of unwavering faith and sheepdom.
I’ve forwarded your article to an ardent Obama supporter and asked for his (attorney) thoughts. I hope to eventually convince him that the Whitehouse response to truth and facts is not the only response and that his hatred for Bush, Chenny, Palin, Conservatives, Republicans and others does not need to cloud the issue of what is happening.
For those who want to save and preserve this great country it must be a daily effort to get the information out to those who are working just to keep their heads above water and who do not have the time or resources to keep up with and follow daily occurances and attacks on this countries foundation.
To slow or stop this free flow of information the Whitehouse is attempting to gain control of the internet with Net Neutrality; g control of radio with the Fairness Doctrine and control of newspapers with a bail out. Not that the last one would be necessary.
Washington is trying to cover the truth with paper money, good luck. It will work for awhile but when the truth shines through (and it will) we all fall down.
Another bubble just waiting to burst, far worse than the plunge from October 2007 to March 2009.
This next great plunge will result not only in massive wealth distruction but in social disorder and political change on a scale never seen before that will lead to marchall law in the USA and many other countries
Gold Reserve, Inc. (GRZ) appears to be “in play.” Is it only a large Canadian hedge fund that is buying the shares, or has someone like John Doody also started recommending it to his subscribers?
Recently I created a put protected spot gold trade in US dollars with a 12 month put as I expect gold to go beserk over the next few years. If the us dollar falls by 90%, I just realized I may not gain anything even if Gold hits $2000 US an ounce. Or higher. Given that wiess research thru larry edelson and others seems to be predicting much higher gold prices are you in fact saying there will be a rise only against the US Dollar due to devaluation or are you suggesting that it true value against ALL currencies WILL RISE?
Would love to hear your beliefs about gold and more importantly the reasons for those beliefs.
Thanks, nathan.
We have numerous problems in the U.S. First of all; no Nation on the Planet can support
50,000,000 (+-) federal agents, agencies, departments, bureaus, committees, ad infinitum
and remain solvent. Huge departments such as the DOI must have limited powers or they
will “take” the remaining real estate sans due process; their abilities to abuse eminent
domain must be curtailed. Self serving BLM agents have made Rocky Mountain High a
Rocky Mountain low by putting oil and gas rigs on private property and so many and so close to the homes thereon; they are poisoning the property owners with toxic fumes and paraffin, destroying sensitive eco systems and like everything the government does; they OVER DO. Whacking the tops off the Rocky Mountains, displacing the elk herds, driving property owners off their property are rewards for employing surplus DOI agents and giving them more authority to hurt us than to help us. Short of kicking them all out and starting over, i.e., real FUNDAMENTAL change; the people need to form Constitutional Amendments Committee. We are no longer on the Barter System. To allow a Congress that most of us neither trusts nor respects to have carte blanch access to taxpayer’s monies, is an abomination and a recipe for disaster. “No authorizations of U.S. taxpayer’s monies will be approved outside the boundaries of the United States until further notice.” Simple but not easy! An Amendment of this nature will get the “self serving slime” (Jack Cafferty in best seller: It’s Getting Ugly Out There) to flee Washington in droves allowing room for real public servants who wish only to promote the “greater good” for all of us. Short term boom & bust cycles that are permanently altering our sensitive eco systems and destroying tourism industry and even the air we breath, are too often the results from allowing surplus DOI agents to abuse eminent domain. Private property rights are the very
foundation of the American Dream, (no pun intended). It defines the Middle Class.
Allowing surplus DOI agents to run rough shod over the property owners violates our
Constitutional rights and threatens private property rights that our government is supposed to protect. The test here is: Who stands to profit? Where is the
“greater good?” With most of us transitioning to a green planet; we must impose Limits
on the Draconian DOI. These surplus DOI agents need to be employed in green jobs, transitioning to make our country a better place: they must not be allowed to trash our environments for self serving goals. The people need to impose not only
term limits for public office, but limits to how many, what nature and for what specific purposes are we allowing the DOI to keep growing with little oversight so that it now threatens the very roofs over our heads and is creating catastrophic damages by destroying lives, families and businesses, eroding tax base, forcing former Middle Class property owners into poverty and bankruptcy. Addressing the underlying causes; too much government in too much of our lives; will restore those freedoms that we have fought
so hard to preserve and motivate the American people to pull themselves out of recession.
Dependence on the government kills the entrepreneurial spirit of the American people.
Let us first restore government “of the people, by the people and for the people.” The
rest will be easy. Commodities, folks! In celebration of its new Ambassador to China, the
ban of one child per couple has been lifted. Buy gold, silver, copper, aluminum, etc. &
Get ready for the Resource Wars. Try to buy groceries within 100 miles of your home.
Go green whenever and wherever. It helps all of us to prosper and enjoy quality of life.
Locally BOR agents; (the very bureau that the Bush Administration planned to dismantle),
have been taking the very roofs over our heads and made the waterfront property owners of Utah eligible for the Endangered Species Act. This single Department is undermining the economies of our western states and grossly abusing eminent domain. The people must
demand oversight from the Obama Administration. While President Obama has referenced
“troubled” agency; nothing has been done to FUNDAMENTALLY alter and Limit the Powers
of the DOI. What has this to do with the economy? Quite a lot. Maintaining 70,000 (+-)
DOI agents; 14,000 land managers alone; is eating us from the inside out. We must impose
LIMITS on the DOI for the catastrophic damages they are doing to this country. We must
commence imposing Limits on ALL government employees. How many of us approves Congress traveling around the world at our expense in $10,000./hr military aircraft leaving a very large carbon footprint and imposing their mostly unwelcome presence on other nations? Or their health care for life? Unless we limit their access as they have limited ours, the tail is wagging the dog. With a recession for all of “the people” why are we not
imposing a recession on our elected officials? Constitutional Amendments will define how,
why, where, who and what for they spend OUR tax money. How many of us support the
wars in the Middle East? How far would those monies go toward building a better and a
stronger U.S. of A.? A stronger Homeland Security? Why do they not have the very same health care as the rest of us? Certainly, that option needs to be considered even if only the upper Middle Class can afford. Unlimited travel? Over $1,000,000. for three, four separate offices fully staffed? What are those separate offices doing for the “greater good?” Should we not be thinking of LIMITING the amount of funds for our elected officials when times are tough? Anymore, a limited term of public office entitles an elected official to retire in style. A style most of us can no longer afford. This is insanity! Let us join forces and consider
Constitutional Amendments Committee. It will give us back our government and ease all
of our economic burdens. Tell them, (our elected officials) what we want and need from
them and don’t expect them to think for themselves.
If history is any guide, markets tend to overshoot in both directions. As this seems to be the Rule, rather than the exception, my guess is that the recent bull market from 6600 to 10,000 will resume after the current period of consolidation and decline.
Just when the concensus believes that the markets will decline sharply, they somehow, someway, spring back to life and seemingly resume the bull market. And just when the bull market looks like it will go straight to 14,000 again, we will surely be disappointed. The only question is how will the inevitable decline and crash play out. It will almost surely suprise and fool most of us. This has almost always been the case for most of us. As someone once noted: “History does repeat itself…but never in the same exact way.”
Hello im here to tell you the woods are fast approaching and the old saying that we are not out of the woods yet is not able to even be said. So looking into the future , the vision of this economy is not recovering its slowly contracting.” job losses” So if you see the woods around the corner and a bear”MARKET” comes toward you walk away. I guess my thoughts are that the woods are ten miles wide and we are all only ants trying to get to the other side and its going to be along haul .Spend what little time left their is on this journey we have ahead to live laugh and be happy because when you finally get to the other side your dollar wont be worth the trip you took, if you didnt enjoy life along the way. O and by the way there will be a new one world currency soon ,what the h you might ask are you rambling about ,CAUSE,-US debt. obama nomics and the/ decay / crime/ politics/wars/ new wars/sociallistic business practices .
Inflation or Deflation, that is the question.
What is the answer in either case?
I will not be convinced that any recovery is for real, untill we see sustained hiring by our companies. So far it is only lay offs. Even then, most likely scenario is repeat of Japan in early 1990’s. Current rally in stocks is probably the swan’s song before real bear market starts. Strangely enough, that could be benefitial to USD.
I put 2012 as the real bottom of the melt down. At the very least it will be a re-test.
Volatility will go off of the charts as we go forward. The carry trade which has put a massive short in the U.S. dollar will have to be unwound. This may be the event that is the catalyst to start the ball rolling down the hill again.
If you throw in the dismal state of the U.S. harvest, we really do have interesting times.
I am not too sure about the “real” recovery but the markets are going to charge ahead, I see the Dow at more than 15000 before this up move ends, call it a bubble or whatever but the markets are headed much higher. 2010, at least the first half is going to be a blockbuster year for crude/gold/silver/copper and emerging markets. BSE Sensex(India) now trading around 15000 is headed for 22000 and above.
So, I bought gold coins to hold back when it was $500 an ounce, so now when I try to sell it, dealers want to pay me $500 an ounce when the price of gold is over $1000. So, what’s the advantage of holding gold then?
Hello Martin:
I think what the government is doing is beyond wrong, it is immoral! I fear for my country and my family.
There is no possible way I see the dollar growing stronger. This leaves little doubt we should protect ourselves from losing what we have worked for, and saved for retirement. We may see this sooner than expected. The elections last night showed change which can bring worse response to the big picture. I predict this country has only touched the surface of the problems this will create which will affect our overall financial picture. Get ready for a new currency. Our best chance is precious metals, natural resources, commodities with leverage, and supportive companies which must be there for us to continue. I don’t believe the American people are going to accept the new cars, and changes much longer. This could turn very bitter with riots, etc. We need all the guidance we can obtain.
You can just study this thing to death and still not know which direction it is going. Looks like one needs to hedge both ways to protect from current deflation getting worse or a turn to inflation which many expect. Timing is impossible. Just don’t take too many risks.
A rreal recovery is not in the cards. In all of the economic discussions by Phd.’s (no offense) that I have run across, none have mentioned that Keynesian inflationary tactics are not going to work, for the following reason: when a country exports goods, they import wealth, and vice-versa. The chief exports of the US in the last few decades have been debt and jobs. Anybody who tells you that amassing printed dollars is the same as accumulating wealth is either a fool or a liar. For that same reason, taxpayer subsidized house, auto and now appliance sales do not qualify as a success, as some would have you believe. And although a proliferation of “green jobs” may slow the hemmorage of wealth to the mideast, unless the energy made here is sold to another country, there will be no gain in wealth by this country. What is truly frightening is the fact that in the future, a starving nation will reach out to feed from any hand extended to them, regardless of their idealogy.
I thought about 6 months ago you were predicting the Dow to drop around 4500-5000, at one time and on another occation, it was to grop to 7500-7700. When should we expect for this to start happening? It seems the market is headed in the other direction.
We’ve seen this week that politics are having a great influence on the market, as well as gold and oil prices. I believe that Cap and Trade and Obamacare will both fail having an excellent influence on the dollar and the DOW. Congress is getting the picture that we cannot keep spending taxpayer money with no positive return. As jobs start to rise in 2010, we will cut back on our military spending. States will have to cut back on spending in order to lower taxes. Republicans will get brought back into power in 2010 with the mandate to cut costs. This will have a great influence on world markets and, of course, the DOW, S&P and NASD.
Thomas Jefferson, George Washington, Ben Franklin, Abe Lincoln, Andrew Johnson and many others have warned us over the centuries about the impoverishment that would be perpetrated on this country with the establishment of a Central Banking system such as the Federal Reserve. American citizens do not understand that being a citizen of this country requires that we take it seriously and get involved and at a minimum continuously learn about the issues and whether what Congress and the Administration (both Rep and Dem) are doing will have a deleterious result to our Liberty, our wallets, our families, our future, etc. Citizenship is not a passive thing and we are obligated to keep informed, to get involved and to elect good, honest and competent people who have high moral characters and want to do what is good for our country. It starts with us, the voters. It is our country and we need to make the right choices that will result in a better country. If we elect dishonest and immoral people to office we will reap dishonest and immoral results. It is difficult for a basicly dishonest person to be honest, for a totally self-serving person to serve others, and for a person who constantly lies to speak the truth. If we are not happy with our Federal government look in the mirror to see who is at fault. If we take our freedoms and liberties for granted we will lose them. The founding fathers believed that “vigilance is the price of liberty.” We would be well advised to believe the same and to vote accordingly at all levels of government.
The hoax was going on for years of housing bubble and un-regulated insurance instruments prior to 2009. This country will not go bankrupt; to be blunt we have enormous resources in public lands alone offsetting any loans, not to mention our intellectual property. I do believe that the injection of capital from government has cushioned the impact of the financial crisis on manufacturing (and jobs.) We need to mobilize our country to retain our edge in developing new energy and nano technologies, and lead the way in reducing carbon emissions instead of dragging our feet. As a retired person, I want to see means of getting interest for my investments without being forced to take risks.
Gold is wonderful, but you can’t eat it. Water will be more precious than gold, water and food. Those who get themselves into a situation where they have access to fresh grown food and water will be doing better than others. Communities that work together will also be prone to be more sustainable without money or the rest of the broken system.
The wolves won’t leave the henhouse til they’ve eaten every last chicken. And the target date for leaving, I would guess, would be around the end of the year 2012. So I think we’ll keep getting de-fleeced (or de-feathered) til then, and what that may mean is that 2010 is a relatively stably poor year, but no giant waves – just more gradual leading up to the finale, which should show big signs in the late part of 2011 and bigger yet in 2012.
That’s the guess from here :)
hi
i have been following the markets closel and have liquidated almost all of my stocks. i do feel that the correction would definitely start sometime soon and the markets will definitely go down by atleast 20% and the fed will start to raise rates soon maybe first quarter 2010 as inflationary pressures will mount.
There is absolutely no doubt in my mind that we will face hyper inflation with the consquence that our dollar will be worthless. We know that many nations over the centuries and in recent decades have experienced the debacle. I have not read nor Have I heard how any of those nations were able to survive. Recently Brazil, and Argetina faced the problem. How did they overcome it? What other nations experienced the problem? How did they solve it? Certainly not by printing an excess of monoply money!
Also, there is no doubt that most of the people in our govt. are fully aware of what the Fed is doing and and know full well what the end result will be. What, then are all of them doing to protect their assets? Not all of them are multi millionaires or billionaires. Where are their stashes? Do they really think that they will survive while I and the rest of the millions of American citizens will starve out in the cold? Exactly where will they be placing there hoards?
November 6, 2009
In the closing months of 2008, my wife and I liquidated our U.S. property and investment holdings, and relocated ourselves and our assets to a foreign country. My 1040 for 2009 doesn’t have enough U.S.-taxable income to feed the cat. My suggestion to all of you is to liquidate your U.S.-based assets and find a friendlier foreign nation to live and invest in. If you want to protect your wealth from the coming collapse of the U.S. economy as you know it, find a friendlier foreign country and become a citizen of that country. If President Obama asked me how to confiscate the assets of the wealthy, I would first define “wealthy” as any family whose combined Adjusted Gross Income for 2008 was $1 million or more; then I’d confiscate their real and investment property, compensating them with 40-year U.S. Treasury bonds, with an interest rate of 1% per annum, with interest first payable 10 years after issue date, payable for only 20 years, with no interest payable thereafter, and a 10-year moratorium on redemption at face value by the original recipient. Get a 2011 Bond, redeem it in 2061 (but not your children or grandchildren). I suggest that you look for this coming to an America near you.
There is a threat to 100,000 homes that had been built in Florida and other Gulf of Mexico states – namely they were constructed of defective materials imported from China. These defective materials emit sulfide gasses which corrode plumbing and electrical wire in a house. The owners of these houses do not want to live in these 100,000 houses. Is Sulfide gas toxic to humans?
We just finished (?) with the residential debacle; now I read (apart from this blog) that there could be another debacle involving commercial debacle in the not too distant future.
Is it time to cash out your chips and buy gold, currency ETFs of resource rich countries like Australia and Canada? This was exactly what I intended to do this past week (November 5, 2009) except they are too expensive now. Maybe the opportunity will present itself (if the US governmnet raises interest rates to combat inflation and buoy the dollar) to buy these currency ETFs inexpensively. But the US government has painted itself into a corner in not being able to raise interest rates to fight inflation, which would cause a recession (a recession would be difficult to control given all the debt in the US – it might spin out of control) on the other hand low interest rates are necessary in the US to buoy the economy. Another alternative to inflation fighting investments is oil. But the places where oil is produed are politiclally unstable. I read that those countries that have natural resources have a history of their governments greedily renegotiating contracts.
If the US dollar in devalued on the foreign exchange markets (because of the fundamentals of its economy) it may spark other countries to engage in a “fools race to the bottom” by competitively devaluing their correncies.
Sincerely,
Robert Kenna
martin,
gooday.
as a regular visitor to the usa, california my main stop, i love hitting the malls for a spot of shopping.
in australia we cannot compete with you, for quality and the variety, at such affordable prices, [even better with our dollar gaining 30 percent on the u.s $].
so it was to my amazement and concern recently, to find 2 of the largest malls in so. california virtually empty at peak times.
in 23 years of visiting the states i have never seen consumers so scarce, shop attendants also more scarce [many layoffs] and the ones there, were the embodiment of the feral hong kong shopkeepers salivating at the prospect of you dropping a few dimes their way.
the recovery must start with the consumer spending [great lack of that at present,]and less layoffs, [need the figures to start reversing] .
when that occurs the economy may get resuscitated.
at present the u.s is on artificial respiration, with no vital signs, and that scares the living hell out of me, even as far down under as i am.
we will follow your lead when markets take that inevitable hit, and it will be worse for us, as in oz, we reckon we are sidestepping the worst of this gfc.
i’ve dumped my stocks, gone to cash in my retirement fund, and waiting to take inverse etf positions, and gold /silver bets soon.
keep up the great work.
andy.
There is no recovery to abort! The gov. will maintain the appearances of recovery for as long as possible for “crowd control” and one of two things will happen; loss of crowd control if the citizens finally wake up and realize that the dollar is being replaced with some other currency, in which case pandemonium will result; or crowd control will continue long enough for the pieces to be in place for the currency switch at which time the “recovery” will flatten and the government will step in with the “solution” with the “help” of foreign nationals or perhaps the U.N., but the economy will be “saved” by this new currency and the relief we will gain from the world’s nation debtors for dissolving the dollar.
How about some comments on the plunge protection team and their relationship to the recent to the recent Goldman Sachs earnings reprt of profits at their trading desk? I would also like to know your views about the counter party risk holders to the large IRSwap positions of the large banks and their effect on future interest rates.
Dane
Hello,
I am amazed and surprised that so many people can be fooled so much of the time. The United States government was bankrupt in 1969 as it could not have paid out on its paper money if there had been a run on the banks.
Traditionally all governments belonging to the World Bank, keep their finances set up basically in 1/3’s. One third in government paper (issues, bonds, etc.), one third in gold and one third in paper money and this is the part that we, the public, use. The reason for this is that regardless of what happens, the government is always liquid because they hav 2/3’s of their finances to cover a run on the remaining 1/3.
In 1969, the US government had 53% in government paper, and 41% in paper money and the final 6% in gold. What this means is that if there had been a run on the treasury, by the public or corporations attempting to cash in on due bonds or certificates, there was not the wherewithall to pay them. if there had been a run on the paper money that we use, the same thing.
In their wisdom, the Treasury simply printed more money and swept the rumours under the carpet. Don’t forget there was an expensive war in Vietnam to pay for and the government couldn’t afford to lose face by not being able to pay their young men and women who were putting their lives on the line every day.
So I am surprised that this is suddenly acting as a wake up call to so many people. The US government is broke and has been for many years, it’s just that no one knew about it or at least only a few did.
Until all of the western countries that have democracies can get together the best minds in their respective countries, and start to lay down a citizens charter that protects the individual and outlaws completely crazy speculation for the sake of the fast buck, this type of manic financial russian roulette will continue. There is nothing wrong with people earning a good percentage interest on their investments, but the speculators have to be stopped for the sake of the common good. I have lived and been involved with the financial systems in many countries around the world, the three main ones being the US, Canada and the UK where I currently reside. It is all the same and needs leadership from public minded leaders to make the difference and we will not find these leaders in any form of government.
Martin, since the Government’s disastrous monetary and fiscal policies of late will inevitably lead to rampant inflation–effectively gutting the dollar’s value and thereby “puinishing savers”, I do not understand your continual advice to keep a good-sized portion of one’s wealth in cash these days. Please explain. P.S. I am not trying to undermine your expertise, as I am a firm believer in the sound and honest analysis by you and your excellenet staff of editors!
Jim
Hi Martin,
Your advice is salutory and offers wise warnings. In Australia most of the public now believe that the worst of the global financial crisis is over.
However, the problem is not only the degree to which the FED and the Obama Administration have tried to inflate the US economy; it’s where this money has gone, that is damaging. Finance and Banking still account for over a third of the US GDP. They constitute a bigger slice of GDP than they did prior to the sub prime crisis, which they caused. So incompetence has been rewarded with bail out money.
It seems that the facts point to worse future outcomes than the worst years of the great depression. The great depression began in 1929 but by 1932 there was more pain and unemployment than in 1929!
What are we in for in the journey to 2012?
Nothing but disaster can occur as a result of endless printing of fiat currency. History has proved it, logic dictates it, the price of gold and other commodities confirm it. What else do you need to know? The only reason it continues is to delay the inevitable collapse of the economy and the social unrest that will occur as a result. The longer it continues, the worse will be the consequences. When it finally ends, unpaid debt will probably again become a criminal offense as the pendulum swings 180 degrees.
The massive risk of interest rate derivative implosion will force Bernanke to continue to support the U.S. dollar (discount rate) destruction policy through 2010 under the rationale that currency destruction is the only answer to the insurmountable debt pyramid.
Some time between 2011 and 2012 the instability of collapsing physical economies against a growing cloud of monetarist claims and counter claims will destabilize developed nations accelerating income and wealth inequality far beyond even the current unprecedented gap. Revolution in developed nation is inevitable by 2012.
The bull has been eating for eigtht straight months. The bear has been starving for the same time frame. The market is headed for a disaster when the dollar rallies. The risk trade is the next big bust. God bless you Martin.
No jobs no recovery. THere is to much debt in the system to bet on a more debt solution. I am looking for a double dip recession. MOre flawed policy is not the way out.
Don’t worry the recession is over, I heard it on the news it must be true.