Posts Tagged ‘forecasts’

A cash crunch and gas crunch

August 2, 2014

As a concise recap, my forecasts in regard to global economics have been simple. The two items that I have repeatedly forecast are a cash crunch and a gas crunch.

Starting in early 2003, I have published warnings about an emerging cash crunch (led by those deepest in debt to suddenly shift from attempting to secure more loans and mortgages to attempting to accumulate cash to cover everyday living expenses and avoid foreclosure and bankruptcy). That same issue applies to households, business, and even governments. I made my conclusions largely based on a very simple analysis of what has happened in Japan since 1989 and how it was spreading to Europe and beyond (like to the US).

Second, starting in 2004, I published warnings that the specific spark for that continuing cash crunch would be an energy crisis (relating not to a severe shortage of fossil fuels, but simply a rapid increase in prices). The nature of the shift was that global fossil fuel production levels (as in the extraction and refining of crude oil) was approaching a plateau and eventual decline. At the same time, global demand for fuel was already ballooning, including in nations with huge populations such as China and India.

So, the global trend of falling fuel prices that was in progress for most of the 20th century had reversed in 1999. By 2004, I noticed that reversal, understood the simple nature of why it was happening, and also understood the simple consequences of a continuing rise in fuel prices (which later spiked in 2008).

Again, the case of Japan was obvious. As one of the leading nations worldwide in total economic productivity, it is the one that has had the most dependency on importing fuel. 99% of the fuels used in Japan are imported from somewhere else.

global oil extraction


So, in summary, the easily predictable plateau of global fuel production led to an easily predictable price increase. Further, because fuel spending is such a high priority expense, the ballooning of fuel expenditures led to an easily predictable cash crunch, which led to a decrease in all other expenditures. As spending on fuel rocketed, cash reserves were depleted and a cash crisis was recognized, leading to an easily predictable decline in real estate speculation, stock market speculation, and so on (lowering demand). In fact, the cash crunch led to an easily predictable increase in selling of excess liquid assets (like stocks and gold) as well as excess illiquid assets (real estate).


2003, 2004, 2005 forecasts of real estate decline plus predictable political reaction

May 2, 2012

Oct 18, 2005:  “Just don’t be surprised when your
$100,000 home is assessed at $50,000 in a few years….”


Oct 26, 2005: “I’ve been saying the real-estate boom ended around August 1- based on stock
charts of real estate sectors [HGX, DJR, EQR, EOP]. Now that the September “lagging indicator” data
is in, how long before people say “maybe it is ending soon?”


In January 2009, President of the United State...

In January 2009, President of the United States of America, George W. Bush invited then President-Elect Barack Obama and former Presidents George H.W. Bush, Bill Clinton, and Jimmy Carter for a Meeting and Lunch at The White House. Photo taken in the Oval Office at The White House. (Photo credit: Wikipedia)

Sep 14, 2006:
“So, re investing… I want to talk about real estate, again. As a recap, I have been forecasting a large drop in real estate for over 3 years now. The next paragraphs in italics highlight that.

On March 3rd, 2003, I wrote: “Unless you have a very specific reason to believe that real estate will outperform all other investments for several years, you may deem this prime time to liquidate investment property (for use in more lucrative markets).” (See in which I explicitly suggested that of these [5] markets: commodities, stocks, the mining sector, real estate, and bonds, the best two were commodities and the mining sector. And what happened?)

On June 9th, 2003, I wrote this: ” Some people think… real estate is a safe return, but how many of them recognize the assumptions involved in that conclusion?”  (See ) In the concluding remarks, I said: “If you still are holding investment real estate in the US next week, email me your favorite assumptions explaining why.” (No one did.)

Even after real estate was still rising, as of November 7, 2004, I did not let up. I was still making warnings with plenty of time to do some research and move a household before any crash started:

“… Some people even refuse to explore the evidence of [market] predictability. Others make naive predictions like “real estate always appreciates,” ignoring Houston, Silicon Valley, Japan, the 1930s Global Depression, and the bombing of Baghdad or Oklahoma City: “Do I hear nine million? How about eight million? Boom! … Do I hear one hundred?” (If only I had known about New Orleans….)

So does all that sound like an alarmist? That may be because I was sounding an alarm! And, it really is laughable to me how devoted some people are to real estate- indeed the the same people will say “I do not believe in market forecasting” and then say “I forecast that real estate markets will continue to be strong…” oops- except they are not strong and haven’t been for at least a year.

On 9/6/05, I wrote about oil primarily, but including how oil markets effect real estate markets. Still, “Real Estate” appears 43 times in .

The most profound segment of the article may be, indeed, my brief, direct explanation of how the “baby boom” (a temporarily increased rate of population growth) predictably effected demand for housing, and yet how the vast majority of people were surprised anyway- at the beginning and end of that trend. Very briefly, the trend was that “the baby boomers” started turning home-buying age and then, coincidentally a few decades after the end of the birthrate increase, suddenly the number of people reaching home-buying age decelerated. Shocking, eh?

May 30, 2005, I wrote: “If you would like to review the data of what has already happened in recent years, this may also motivate you to consider re-assessing any current exposure to unstable markets and systems, including the US Dollar and US Real Estate markets.”

Then, over a year ago, I reported the end of the real estate rise- because I was looking for it. That report featured 5 straight weeks down in the US housing sector in August 2005. Here is a current chart on the housing sector of the US stock market$hgx&p=W&b=5&g=0&id=0 [Note that when I published this in 2006, the chart showed the first part of the decline shown here: ]

Recently, [again this was in 2006] mainstream media has begun to report the declining that I started reporting a year ago. You see the years of issuing alerts for real estate… I was right, again! 😉

But now [2006] I am issuing a panic alert. Now that the mainstream media is reporting what I forecast several years ago, those who did not consult accurate forecasts years ago or the news reports I gave a year ago, now they are finally starting to look at the data of what has already happened and some are naturally reacting. Each “knee-jerk” reaction can enhance a snowball effect.

I gave you my warnings, and for those of you who have not heeded them yet, this is a new warning- an alert only- but a very strong warning. The US real estate decline is now over a year old. No accelerated panic has yet begun, but once the lending market buckles, then it may be too late to exit real estate quickly. There are still many unscrupulous buyers out there… for now. Some folks will see the news and even believe that real estate is now discounted to a bargain. That might be a reasonable possibility, if not for the fact that lending markets are generally predictable.”

Real Estate Office

Real Estate Office (Photo credit: pixieclipx)

More excerpts:

Oct 18, 2005

I mentioned real estate a lot already in the prior
emails…. I’ve already told you about the other dominoes that will fall after the
first catalyst triggers a drop in real estate- and
many folks seem to get some of that- but my sense is
that most folks still do not accept the possibility of
deflation (or currency appreciation in general), and,
after repeated references, I figure either most of you
basically understand it or don’t care enough to use
your search engine or even just call me and ask….

If you get that $100,000 loan because it is only
$333 per month to service the mortgage (the first
year), that is fine. Just don’t be surprised when your
$100,000 home is assessed at $50,000 in a few years….

US President George W. Bush presents the Presi...

US President George W. Bush presents the Presidential Medal of Freedom to Pope John Paul II during a visit to the Vatican in Rome, Italy in June 2004. (Photo credit: Wikipedia)

As usual, I want you all to be aware of the
larger changes in our midst. All these economic
changes will mean political changes. The President

[which was George W. Bush in 2005]

will be scapegoated (whether for good cause or not)
and likely removed- seriously.

[I meant impeached, and though Bush was not impeached,

his approval ratings went from amongst the highest of all 

US Presidents as of 2005 to among the lowest by 2008.]

If you don’t know how
big a deal a 15% drop in real estate prices is, you
will- and it should be much deeper than that. 

[a much bigger decline in price than 15%]

Political encroachments are likely to accelerate.
Since the cause of the anger of the people will not be
satisfied by removing one “public servant,”

[Note that as of now Obama has almost as many critics

as Bush did by 2008.]

and in
desperation to garner support, more international
violence (including in America) is likely…. Note this sort of
economic correction is not only what led to the vast
influx of socialism into the US in the 1930s (the New
Deal), but the scapegoating of one leader after
another was also recently manifested in the Japanese
Depression of the 1990s (which continues to this day).

After all, if it is not “them” (“their fault”), then
“we” would have to accept responsibility… to act
responsibly (economically, sustainably)! That just
doesn’t usually inspire voter turn-out like “we will
fix everything for you.”

Presidents Gerald Ford, Richard Nixon, George ...

Presidents Gerald Ford, Richard Nixon, George Herbert Walker Bush, Ronald Reagan and Jimmy Carter at the dedication of the Reagan Presidential Library (Left to right). Français : De gauche à droite, les présidents américains Gerald Ford, Richard Nixon, George H. W. Bush, Ronald Reagan et Jimmy Carter à la bibliothèque Ronald Reagan Presidential Library (1991) où se trouve une reconstitution du bureau ovale. (Photo credit: Wikipedia)

I’ve been saying the real-estate boom ended around August 1- based on stock
charts of real estate sectors [HGX, DJR, EQR, EOP]. Now that the September “lagging indicator” data
is in, how long before people say “maybe it is ending soon?”

Oct 26, 2005:


March 18, 2012

The Adaptive Opportunists 


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Join in a conversation led by the uniquely competent forecaster who publicly detailed years in advance a now familiar sequence of events which in 2004 he called “The DominOIL Effect:”
1) long-term unprecedented rises in the prices of oil and gasoline (which started in 1999)
leading to
2) less and less spending on most everything else
leading further to
3) more borrowing initially
but eventually leading to
4) sharply declining prices
a) of US real estate (starting in 2005 in previously top-performing areas of the US like Phoenix and Las Vegas)
b) of the US housing stock sector (which also peaked in mid-2005 and then fell 80%)
c) of the US financial sector (which beginning in 2007 collapsed over 80% as spiking oil prices finally pricked the US financial bubble like a deflating balloon)
d) of the overall US stock market (which fell over 50%) &
e) of stock market prices worldwide (which fell nearly 60% overall)
How much would you like to be clear how The DominOIL Effect (of the predictable results of energy prices rising worldwide in the coming decades) will continue to dramatically alter your budget, different industries, different companies, and different regions of the planet?
How is The DominOIL Effect fundamentally adapting your life as you have known it?
Call 480 265 5522 to find out about dates, times, and locations of upcoming seminars, webinars, and teleconferences.
Here is a stock chart of the US Housing Sector HGX’s drop of around 80% in the last few years. This author published forecasts in early 2003 of a coming “housing crisis” (actually, just a crash of housing prices due to a decline in borrowing) and so, in mid-2005 when HGX began to fall, he had been watching for that and published a confirmation of his prior forecasts in September of 2005.
Here is the later forecast decline in the US Financial Sector:
but did anyone ever tell you about the top-performing US stock sector of the last 10 years (which J.R. featured in early 2003):
Well, while major parts of the US stock market have collapsed (high tech companies, financial companies, the housing sector, etc), why is that sector up by well over 1000% in the same time period? What investments will be the next top-performers? What sheltering methods will be the most favorable and secure? What budget adaptions are most relevant for you and your business?

Up Next Investments – stocks, bonds, real estate, commodities, currencies

February 29, 2012
stock market

stock market (Photo credit: 401K)

Which investments will go up next?

Stocks? Bonds? Real Estate? Commodities? How about currencies?

Which ones will go up most? Which will go up longest? Which will go up furthest?

Every investor I know is interested in these fundamental questions. Some are more clear than others that these are their fundamental interests as investors- not doing what everyone else has been doing, but investing in what most investors are ABOUT to invest in most- simply because what most investors are about to invest in is the investment that is going up next.

A few service providers have been committed to answering these questions in advance for their network of investors. By providing you advance notice of what investments are going up next, we help your investments be the ones that are going up next. We help you make the investments that are going up next be your investments.

Price-Earnings ratios as a predictor of twenty...

Image via Wikipedia

Below are links to a few of the published forecasts made by our founder in the last several years.. Note that in many of the early publications, the “tone” may seem immature and even contentious. However, all along, the basic long-term analysis has been consistently valuable. Plus, the tone and overall quality of the writing has been developing, so that reading each newer material is not only informative in terms of being lucrative, but also a more enjoyable read.

March 3, 2003:
Why are investments diving…
and what can I do about it?
I published a simple explanation of the huge decline in global stock markets of the prior years. I also issued my first warning about coming instability in lending markets and then real estate. I forecast that gold would outperform stocks (which it did), and I featured the HUI sector of the US stock market (which dipped just below 120 in March 2003, then surged up to over 500 by early 2008, a gain of over 300%).

November 11, 2004:
“Are you affected by the real US deficit: oil?”
Oil was around $50 when this article was published. My warnings focused on a coming rise in gasoline prices, along with oil. The final target for oil (not stated in this article) was $140, which oil exceeded very briefly in the summer of 2008, then fell to the low $30s by late 2008.

September 9, 2005:
Lesson 1: “Worth its Weight in OIL
This article emphasizes the singular tangible importance of oil as a fuel in particular (but also for all petrochemicals such as plastic). By singular importance, I mean distinctive among all other investments, such as currency, stock shares, real estate, and even gold- hence the replacement of gold in the saying “worth it’s weight in gold” to the subtitle of the article: “worth it’s weight in oil.”

I specified that the one nation most economically dependent on oil- vulnerable to instability in the event of the rise in oil prices that I considered inevitable- is the United States, and again I emphasized the immediate danger in real estate (and an eventual resolution of an underlying weakness in the US stock market):

Stock market of Brussels

Image via Wikipedia

“If there is no fundamental economic strength in the US today, US real estate must decline eventually. Weakness in US stocks or the dollar which leads to a “flight to safety” [i.e. to real estate] is not the same as strength in real estate. Real Estate markets are nowhere near as strong as oil markets.”

“Think about it. Oil is the leader [reversing trend in 1999]. US stocks followed [in 2000]. The dollar followed them [in 2002]. Real Estate will follow next.”

Again, that was published September 6, 2005. In fact, in some major US markets, such as Phoenix Arizona, the real estate market had already peaked in the weeks just prior to that article (mid-August). The housing sector of the US stock market (HGX) had also just peaked (the very end of July).

December 12, 2005:
I restated my emphasis of my increasing concern about the US real estate market and my skepticism for long-term stability of the US stock market, as well as my strong preference for commodities, including gold and of course oil in particular, which both continued to rise (and far more than the relatively modest rising in US stocks as well as the overall real estate market).

July 21, 2007:
How To Safely Gain Over 1000% In A Few Years…
By Picking The Best Discounts
This was just prior to the peak and collapse in US stocks. I also titled a section “why real estate is so risky.”

“All-time highs in gold, oil, stocks, and real estate have all been highly promoted in recent years. Enthusiasm is extremely high in general for these markets. So, these are not the most ripe to gain.” That’s right- I was already thinking of the eventual weakness in oil and gold- not just the immediate instability in stocks and real estate.
“…So, compared to everything else, bonds may be the ‘safer’ discount for now, [discounted = likely to rise in value] since the US Dollar Index has not yet established a low/rebound.” Bonds did soar, as stocks collapsed, and the US Dollar index bottomed in early 2008, then surged.

August 25, 2008:
Stop Gambling: Quick!
Get Rich: Safely.
This article warned of the pending acceleration in the decline in US stocks.

March 3, 2009:
A Cure For The Common Misunderstandings
About Financial Markets
The title is rather clear.

3/4/09: Private distribution email (redpill_info link)
Without getting much deeper here into the volume of details available, note that you can easily browse through that yahoogroup and see a variety of messages on investments over the years, including many shorter-term forecasts. This email begins with one detail worth noting, though:

“By the end of trading today, I have exited all my mid-term positioning for a drop in stocks, which I expect to soon be reversing for a multi-month rally, though there is still a potential decline this week.”

The US stock market did indeed begin a multi-month rally the next week. The profit potential from that multi-month rally was tremendous, especially when compounded with profits from the previously recommended “short positions.” I knew that the coming multi-month rally had the potential to reach new highs in enthusiasm (confidence, sentiment), and in fact that target was reached recently, such that I am no watching closely for the first stages of a major stock market panic worldwide- much bigger than that of 2008 (or of 2000-2002, or even of 1929-1932).

An assortment of United States coins, includin...

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Remember, some investors are always asking the question “Which investments will go up next?” Always, some forecasters explore that question and see advance indications of how that question will be answered. We help you make the investments that are going up next be your next investments.

Related articles

published 2009: Sept. 22

re-posted 2012: Feb. 28

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