benefiting investors with courage- sanity and bear markets

Ice Age Investment Solutions

Benefiting investors who have the courage to admit that there could be such a thing as winter.

Have you ever been to Phoenix, Arizona? It’s January in Phoenix and temperatures were in the 70s yesterday.

Can you believe that? How about this: if one stayed for one’s whole life in Phoenix without ever leaving, would that someone believe that it could be possible that, somewhere in the world, there might be such a thing as winter?

Several years ago I saw a young boy- 4 years old- seeing snow for the very first time. He had grown up in the desert of Arizona and had probably seen snow on television once or twice, but otherwise he was quite unfamiliar with it. So, he woke up one morning and saw a bunch of white stuff all over the ground outside and was curious, and then he laughed after he said that the long piece of ice hanging down from the doorknob looked to him a lot like snot.

Next, he walked out in to the snow and now was not just curious but totally fascinated. He leaned down and put his hands in it and made balls by packing snow from one hand into the other. He kept doing this for a while I returned to what I had been doing.

Soon, he panicked! He hurried running over to report the surprising, scary news.

He suddenly could not feel his hands. He could see them, but they had disappeared from his sensory experience- like someone just turned out a light and he could not see.

He did not associate playing with the snow with his hands going numb. That was an entirely foreign experience to him. However, he saw the calm, amused response of the adults- perhaps then put his hands in some warm water and put on some warm, thick gloves- and then of course went back outside to making snowballs and building snowmen or just laying down in the snow to swing his arms and legs to make snow angels.

Later that day, he asked me if I had ever heard of a movie called Ice Age. Of course, I said “no, don’t you know that there is no such thing as movies?”

He turned his head sideways and then asked very seriously: “Listen, do you believe that there ever really could have been an ice age?”

Naturally, I said this to him: “Are you joking around with me again? That’s crazy! Look around; there’s no such thing as an ice age and there is obviously no such thing as snow.” I was pointing my finger at a spot on the ground where his snow angel had cleared away the snow to reveal the sidewalk. There was snow covering the rest of the sidewalk, but I was pointing at the exposed sidewalk, not at the snow all around it!

Slightly annoyed, he defiantly said very loudly “That won’t work on me. I know all about snow now. Anyway, I think it would be cool if there could be an ice age again.”

“Yes, very cool,” I said, crossing my arms in front of me and grabbing the opposite elbow and shuddering with clenched teeth exposed. “Brrrrr.”

Sometimes people get surprised. Sometimes people may even panic- like a 4 year-old with hands mysteriously numb.

It can be reassuring to talk with someone who knows about the cycles, seasons and eras of how things predictably change. Even 4 year-olds know about the predictable flow of day and night, the changing phases of the moon, as well as annual seasons.

I’m going to tell you another story and then tell you how these stories can benefit you as an investor. You may still get surprised and you may even panic, but you may value knowing at least a little bit of what I know about what is possible and in fact about what is predictable as in already developing, but perhaps not recognized by most- not yet.

So, now on to another story. This happens to be the story of how I learned to predict the future of financial trends simply by noticing what is already happening.

In mid-2002, there were warnings of a high risk of forest fire where I lived. It was a very dry summer in the mountains of Arizona, and that dry season was part of a well-documented cycle of drought and moisture.

There had also been decades of human intervention to put out as quickly as possible every natural wildfire started by lightning. Tourists did not like the smoke and homeowners did not like the fire. Everyone was grateful that the wildfires were quickly stopped.

However, after decades of such interventions, there was a tall accumulation of dry plant matter on the ground over huge ranges of pine forest. Instead of the small trees occasionally being burnt out to keep the forest from being too dense, there were lots of densely packed trees with a huge number of root systems all competing for basically the same amount of water as usual. The entire forest- not just a few trees- but every single one- was weaker than the average tree for the last several thousand years at least.

So, those weak trees were being infested with insects that were removing some of the excess trees. Since the fires were not clearing out the weakest trees from the outside, the insects were clearing out the weakest trees from the inside.

However, then some people wanted governments to prevent the insects from clearing out the trees from the inside. Then, there would be some dead trees just rotting away- but perhaps with a lot of pesticide dumped throughout the forest- as well as a bunch of trees that were dying of thirst and barely alive.

Next, apparently a person who was an expert at putting out forest fires was having some hard economic times. He allegedly started a fire in the forest- this is a forest with an unprecedented concentration of unusually unhealthy trees and a huge accumulation of dry undergrowth. The fire spread very quickly. His fire-fighting crew was notified of the ballooning blaze and they all got to work earning money by putting out the fire he had started.

However, this fire apparently spread too fast for them to stop it. Or, maybe they just wanted to let it burn for a while so they could make more money fighting it longer. Who knows?

Along came a lady from California, a tourist who went for a hike and got lost. She started a signal fire for rescuers to find her. They did.

However, the signal fire that she had lit was started in another area that was packed with dense unhealthy trees and historically unprecedented accumulations of dry fuel on the ground. So, the fire spread from dry tree to dry tree very fast.

Apparently, temperatures reached 2000 degrees- enough to melt certain metals. In that intense heat, many standard techniques to fight a forest fire were simply irrelevant.

So, there were suddenly two new fires, one started near a place called Rodeo and another started near a place called Chediski, and the two fires eventually grew together into a single wildfire. Either of them alone would have been very hard to contain, but two at the same time eventually consumed half a million acres of pine forest. The huge cloud of smoke eventually stretched across Arizona into Colorado and beyond.

Anyway, all of that is a long introduction to a rather brief reference. I lived near that fire. I was at work one day and I was notified along with hundreds and soon thousands of people that I was being instructed to evacuate from my home, though I would be allowed one trip to load up my vehicle with possessions and to do something about any pets or livestock I had.

I had grown up in Florida with hurricane warnings, but usually there were several days of warning before a hurricane would arrive. There was not much warning for this evacuation.

So, I drove home and considered the amount of room in my automobile and then walked through the house looking for what I would need most just to live for the next few days and weeks, plus what items were most valuable to me, including of course some items that could not be replaced.

I made arrangements for a place to stay temporarily, packed my vehicle, and drove away. I did not know if I would ever see any of the rest of my belongings or not- not that one ever really knows.

I spent most of the next week or two on the internet, going more or less randomly from one website to another. I did some research on astrology (the “language of the stars/heavens”) and I noticed that the word dis-aster is formed from root words that mean “unfavorable stars” or “bad stars.” (Though not as interesting, “con-sider-able” and “con-sider-ate” are from roots meaning “with the stars.”)

I was curious about finding documented correlations that there could be other connections between human behavior trends and the basic cycles of the seasons, of day and night, and of the moon phases (which apparently are connected to the hormonal activity of fertile women in the form of ovulation and menstruation).

Without any particular interest in financial matters in particular, I learned of a field called financial astrology. I did not find it especially interesting, though I do remember being intrigued by a astrology chart of the formation of the Federal Reserve, a private financial venture that had apparently gained immense influence, especially in the United States, between 1913 and 1933.

Quickly, the private contracts issued by the Federal Reserve superseded their closest competitor, the public currency issued by the US Treasury. The Federal Reserve’s US Dollar notes soon became the most actively used financial instrument on the planet by far. Virtually everything sold in the US was priced exclusively in the accounting unit established by the Federal Reserve.

Among the most important things exported to the US to the rest of the world was oil. For international buyers of oil to get oil from the US, they had to not only think in terms of the Federal Reserve’s US Dollar, but buy that currency with their foreign currency (sell or trade it in) in order to get oil from US oil suppliers.

So, over the course of decades, the US accumulated a remarkable concentration of humanity’s total wealth by exporting oil to the rest of the world, allowing the US in 1970 to have such a surplus of wealth that it could buy oil from some of the rest of the oil industry. The global oil industry had spread from Houston and Dallas to remote countries like Venezuela, Russia, Iraq, Kuwait, and Saudi Arabia. However, the reversal of the trade surplus to a trade deficit had dramatic repercussions for the Federal Reserve, the value of their currency, and the US.

By the late 1970s, there were growing concerns that the private currency issued by the Federal Reserve might imminently collapse. It did not.

Anyway, I was not intrigued by the astrology so much as the simplest of patterns. I noticed that a certain investment forecaster had a track record of over 20 years of 100% accuracy. I read his articles and listened to recordings of him speaking. I found other analysis, some simple and others complex, some logical and others less so, some reliable and others consistently wrong or at best inconsistent.

I did my own analysis and published my first analysis of investment markets on March 3, 2003. What I said would happen eventually has been: deflating of global lending markets in general and real estate  price declines in particular. I also publicly forecast the sharp spike and crash of fuel prices as well as the eventual collapse of stock market prices in places like the US, UK, and EU.

I started giving public talks in Tucson, Arizona in 2003 and made some comments on an emerging rebound in silver (when it was $4.50) at an event in Scottsdale, Arizona. I was taped giving another public talk and that was televised in Tucson. In that talk, I featured a coming rise in fuel prices, especially oil. Oil went on to rise over 1200% from 1999 to 2008.

A few years later in 2006 I put a video on the internet explaining how the lending markets were destabilizing and how that would soon devastate real estate markets and lead to the collapse of banks. As of 2008, that is exactly what happened in the US and elsewhere- and just as I had forecast, right after oil prices got so high that they slowed down the US economy.

In fact, thought without being triggered by high oil  prices, the basic formula of lending market instability leading to currency deflation and a real estate collapse is exactly what happened throughout the 1990s in Japan, as well as various other times before. I had simply noticed a logical pattern (or a few actually) and then I effortlessly noticed the first stages of the same pattern whenever I saw the beginning of the same old sequence.

For instance, can you guess what letters could go in the blank at the end of this sequence: “The United States of Ameri__?” Forecasting is simply the art of noticing repeating patterns and then noticing the beginning of a familiar pattern. Sometimes, old patterns repeat. Other times, they may not- but sometimes old patterns do repeat, again and again, like a redundant copy of the exact same thing that I already told you already.

Anyway, there is no such thing as an ice age, nor snow, nor winter, nor economic change. However, real estate always rises.

On the other hand, some say that now is the perfect time when you should buy gold and silver- perhaps just like they were saying in 1979, 1980, 1981, and every other year, right? Or maybe you should buy stocks- I know tons of commission-earning investment advisers who consistently promote the purchase of the products that result in them earning commissions. Don’t you?

I’m not saying that an ice age is coming to the global economy. I’m saying that what is already here is obvious. You can call it anything you wish (or nothing), but the pattern is what it is.

I’m not going to detail here what is obvious to me. I am going to say that decade after decade of reactive intervention- “please come and put out the fire because I do not like smoke”- is not only an entirely predictable response to smoke, but leads eventually to consequences that are equally predictable.

You can inflate a balloon slowly, but it may deflate even faster than it inflates- just like a credit bubble. Then again, there is no such thing as a credit bubble, right?

For investors who have the courage to admit that there could be such a thing as winter, the benefits can be immense. Many people could be surprised by what happens next. Some could panic… like a 4 year-old with numb hands.

Some could find re-assurance in speaking with someone who calmly recognized the emerging pattern early in its manifesting. They might even benefit immensely from such a conversation. Plus, during an ice age, you can appreciate having on some warm gloves- and some of us might have a few extras stored for just what is obviously emerging already. Ah, but I forget so quickly, there is no such thing as warm gloves, right?

One Response to “benefiting investors with courage- sanity and bear markets”

  1. Ante Says:

    I am happy that you do know to use your experiences and reinterpret it. Is it possible that here we SELF-ORGANIZE similar souls?

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