February 10, 2012 at 6:42 pm #17578
Have any members heard of or read a new book by H. Woody Brock titled “American Gridlock?” the subtitle is
Why the Right and Left are both wrong. Commonsense solutions to the economic crisis. It was mentioned on zerohedge on Wednesday and I just got a copy today from Amazon.com.
I follow Bill’s missives closely and have for years. I understand that things look bad on many levels, but instead of ruminating on the problems, shouldn’t we try to find a way out? Or is the only option to let the whole current structure collapse? I’m a practicing physician, but was a history major in college. I wish I could read more about what might come next. Preserving family wealth is important, but of what use is it if the world goes to hell?
If anyone reads this I would love to hear your opinions.
A fellow member,
Stephen FraserFebruary 11, 2012 at 9:11 pm #27151
I have read Fiat Money Inflation in France and When Money Dies (Which deals with hyper inflation in Wiemar Germany in the early 20’s. These countries both attempted to inflate their way out of their problems and ended up in hyper inflation. The steps we are taking to deal with our problems are eerily similar. I have also read Endgame and others. I manage money and it takes an unbelievable amount of time to keep up and still learn from the history of how countries have handled money. If you can bear academic works, This Time is Diffferent has lots of good information too.
It does appear that our debts are too big to pay as they stand, but I do not think it is hopeless. I think that if we had the guts to cut entitlements and reduce government size fairly dramatically, we would go into recession, but 3 years from now, I think we would have turned the ship and be headed toward the right port.February 15, 2012 at 1:30 am #27158
I have not seen the political will in our country to seriously deal with our debt problems. Therefore, our leaders will do everything to keep the system afloat as is w modest tweaks on the margin to fix the budget. As we are witnessing in Europe, it will take creditors to force the US to change our ways. I anticipate atleast 8-10 years of our economy “muddling” through. I think one positive wild card for our country could be natural resources. I know the political class want nothing to do with natural resources. But, the US is sitting in a postion to be a large exporter of natural gas as well as other resources. Imagine how that would help both our trade deficit and our employment picture. I think it would be ironic, that a country which prides itself on innovation and having a strong “creative class”, could actually be saved by something so basic as a natural resource. Again, this would take the politicians putting their ideology aside and seeing the economic benefits. My biggest fear is the long term negative affects of our large entitlement programs. Obviously the cost is a huge issue, but I am also very concerned about the “learned helplessness” this creates amongst our population. We could end up w a generation of people who are actually fearful of the opportunity to make their own fortunes. I am an optimist, so I do believe this country will prevail, sadly it will probably take a lot longer than it needs to.
-Jim GrafFebruary 21, 2012 at 3:21 am #27165
I think that our Federal Reserve and the ECB will continue to inflate through this year, and although we expect a correction of sorts sometime this spring, I expect the markets will likely look better going forward. We bought in late December and have ridden this one up. We have placed stops up pretty close as the market rises, but I Ned Davis has highlighted the fact that money market funds are being drawn down. It is only 1.5% now, but I expect that too many people are beginning to see it more risky not to invest in equities at this point due to our government and the Fed forcing down and keeping down rates. They are raping the older savers in this country to save the Federal Government money they should not be spending. I fear this will end badly for most investors.March 6, 2012 at 6:47 am #17900
“I wish I could read more about what might come next. Preserving family wealth is important, but of what use is it if the world goes to hell?”
Stephen Fraser, February 10, 2012 at 6:42 pm
Davidson and Rees-Moog have written a couple of books that I found provocative and prophetic. Seminal data. The Sovereign Individual and The Great Reckoning. I read each at least 10 years after publication, when I could see that their analysis of cause and effect in world macro-events had led to a number of startlingly accurate predictions. One is the liberating power of the micro-chip for the individual — probably the end of big government as we know it. Davidson &Rees-Moog make a good case for a repeating 500 year economic cycle, which we are just entering. But the transitions are not going to be pretty. Like-minded master mind groups like this one will become more crucial to success and safety.
Bonner is congruent with Faith Popcorn’s axiom that if you know what’s going to happen in the long run (the trend), it’s pretty easy to know what to do in the short run. I think that’s right.
I have not heard or read of any exceptions to the rule that fiat money inflates itself out of existence in about 80 years, disappearing or devaluing to nearly nothing. On the other hand, there are more than 20 examples of hyperinflation/devaluation in the 20th century alone. Could anyone correct me on this? I think there is going to be a domino effect of sovereign devaluations in Europe and North America over the next decade, maybe less.
Of course, the Great Contraction of the ’30s was an exception. Like inflation, it was a government decision that was very effective at stripping assets from the common people and transferring them to the rich and well connected. It seems wise to diversify into emerging markets as the western powers implode their currencies.
My study leads me to believe that, surprisingly, there is one investment that is highly protective in both scenarios: a year supply of food, clothing and other necessities (fuel and cash, if possible).
Generally, my study and observation lead me to these conclusions: There will always be lots of stress in this life, but also safe places to live and raise one’s family. There will be food to eat and most people will continue to be helpful and happy most of the time. Socialism (mob rule playing dress-up) will continue to collapse, the Family will grow quickly in importance. Things will continue to have a way of working out.
That sounds like rose-colored glasses to some, but it’s what the hard numbers add up to in my experience.
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