Posts Tagged ‘stock’

« Older Entries

Courage and one economic forecaster who predicted the 2008 crash, financial crisis, and housing collapse

April 8, 2012

Courage and one economic forecaster who predicted the 2008 crash, financial crisis, and housing collapse

Courage is what makes the difference. Many people are terrified of fear, as in paranoid and anxious. Many are paranoid about appearing afraid to others and even to themselves, as in ashamed. Many are reflexively anxious about even exploring something new.
Basically, they are already paralyzed with fear and terror. They may say things like “negativity disturbs me” and “which villainous individual or group is most to blame for the consequences of my choices” and “which heroic politician will best protect me and save me from the consequences of my choices?”
There are many who have eyes, but having eyes is not enough. Those who are full of repressed fear and terrified of courage, they avoid facing what is plain and clear.
Courage is what makes the difference. Let those who have the eyes to see notice what is plain and clear.
For those who hearts are full of raging fear, let them compete with each other to see who can avoid reality the longest. Let the courageous cease from any raging blame and wishful thinking, then adapt and benefit from what is changing.
I am clear on the shifting trends that will determine the future value of your various alternatives. I can quickly assess your situation and present you with the best choices available to you. Let me know when you are ready to experience the courage of adapting now to benefit from change.
March 2003:
I forecast the collapse of the credit bubble and a resulting decline in real estate prices
“We can profit from the collapse of the credit bubble and the subsequent stock market divestment. …Real estate has not yet joined in a decline of prices fed by selling (and foreclosing). 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).”
http://www.gold-eagle.com/editorials_03/hunn030303.html

November 2004:
I forecast a continuing rise in fuel prices which would be the specific trigger ending of the prior economic boom, resulting in a “deflating” of the credit bubble in the US and beyond
“How many dollars will it cost to buy a gallon of gasoline next year?”
The basic idea of this article, “The REAL U.S. Deficit: Oil,” was that surging demand for fuel (worldwide and in the US) would continue to raise fuel prices (which had been rising since 1999), eventually leading to tightening budgets, then a reduction in fuel consumption, and a shift in  trends of economic behavior (buying, borrowing, lending, selling). I called that predictable sequence “The DOMINOIL Effect.”
http://www.gold-eagle.com/editorials_04/fibonacci110704.html
September 2005:
I forecast that the rising demand for fuel would be leading to a shift toward more spending for fuel and less spending on real estate, especially in “remote suburbs,” like the desert metros of Phoenix and Las Vegas.
“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.”

November 2006:
I forecast the coming collapse of financial institutions (as well as a crash of the broader stock market)
“When the credit market shifts, [then] the real estate market shifts, and they are actually connected such that when the real estate market declines… that  actually greatly effects [lenders] capacity to extend credit. So, what you have is a context where banks can collapse.”



June 2011:
www.gold-eagle.com/editorials_08/hunn062911.html

Ezekiel 12:2 “Son of man, you are living among a rebellious people …

“Son of man, you are living among a rebellious people. They have eyes to see but
do not see and ears to hear but do not hear, for they are a rebellious people. …
//bible.cc/ezekiel/12-2.htm – 16k

Romans 11:8 as it is written: “God gave them a spirit of stupor …

… just as it is written, “GOD GAVE THEM A SPIRIT OF STUPOR, EYES TO
SEE NOT AND EARS TO HEAR NOT, DOWN TO THIS VERY DAY …
//bible.cc/romans/11-8.htm – 17k

Deuteronomy 29:4 But to this day the LORD has not given you a mind …

… But to this day the LORD has not given you a heart to
understand or eyes to see or ears to hear. …
//bible.cc/deuteronomy/29-4.htm – 15k

Psalm 119:18 Open my eyes that I may see wonderful things in your …

… Open my eyes to see the wonderful truths in your instructions. …
//bible.cc/psalms/119-18.htm – 15k

Matthew 7:3 “Why do you look at the speck of sawdust in your …

… “Why do you see the speck in your brother’s eye but
fail to notice the beam in your own eye? …
//bible.cc/matthew/7-3.htm – 16k

Matthew 7:4 How can you say to your brother, ‘Let me take the …

….. How can you say to your brother, ‘Let me take the …
//bible.cc/matthew/7-4.htm – 16k

Matthew 7:5 You hypocrite, first take the plank out of your own …

… Hypocrite! First get rid of the log in your own eye; then you will see
well enough to deal with the speck in your friend’s eye. …
//bible.cc/matthew/7-5.htm – 16k

Luke 6:41 “Why do you look at the speck of sawdust in your …

… “Why do you see the speck in your brother’s eye but
fail to notice the beam in your own eye? …
//bible.cc/luke/6-41.htm – 16k

Luke 6:42 How can you say to your brother, ‘Brother, let me take …

… Hypocrite! First get rid of the log in your own eye; then you will see
well enough to deal with the speck in your friend’s eye. …
//bible.cc/luke/6-42.htm – 19k
Matthew 13:13 This is why I speak to them in parables: “Though seeing, they do not see; though hearing, they do not hear or understand.

Matthew 13:14 In them is fulfilled the prophecy of Isaiah: “‘You will be ever hearing but never understanding; you will be ever seeing but never perceiving.

Mark 4:12 so that, “‘they may be ever seeing but never perceiving, and ever hearing but never understanding; otherwise they might turn and be forgiven!'”

Mark 8:18 Do you have eyes but fail to see, and ears but fail to hear? And don’t you remember?

Luke 8:10 He said, “The knowledge of the secrets of the kingdom of God has been given to you, but to others I speak in parables, so that, “‘though seeing, they may not see; though hearing, they may not understand.’

John 9:39 Jesus said, “For judgment I have come into this world, so that the blind will see and those who see will become blind.”

John 12:40 “He has blinded their eyes and deadened their hearts, so they can neither see with their eyes, nor understand with their hearts, nor turn–and I would heal them.”

Acts 28:26 “‘Go to this people and say, “You will be ever hearing but never understanding; you will be ever seeing but never perceiving.”

Romans 11:8 as it is written: “God gave them a spirit of stupor, eyes so that they could not see and ears so that they could not hear, to this very day.”

Deuteronomy 29:4 But to this day the LORD has not given you a mind that understands or eyes that see or ears that hear.

Isaiah 1:23 Your rulers are rebels, companions of thieves; they all love bribes and chase after gifts. They do not defend the cause of the fatherless; the widow’s case does not come before them.

Isaiah 6:5 “Woe to me!” I cried. “I am ruined! For I am a man of unclean lips, and I live among a people of unclean lips, and my eyes have seen the King, the LORD Almighty.”

Isaiah 6:9 He said, “Go and tell this people: “‘Be ever hearing, but never understanding; be ever seeing, but never perceiving.’

Isaiah 43:8 Lead out those who have eyes but are blind, who have ears but are deaf.

Jeremiah 5:21 Hear this, you foolish and senseless people, who have eyes but do not see, who have ears but do not hear:

Ezekiel 2:7 You must speak my words to them, whether they listen or fail to listen, for they are rebellious.

Ezekiel 2:8 But you, son of man, listen to what I say to you. Do not rebel like that rebellious house; open your mouth and eat what I give you.”

Ezekiel 3:27 But when I speak to you, I will open your mouth and you shall say to them, ‘This is what the Sovereign LORD says.’ Whoever will listen let him listen, and whoever will refuse let him refuse; for they are a rebellious house.

Related articles

Tags:, , , , , , , , , , , , , , , ,
Posted in Uncategorized | Leave a Comment »

Gratitude into Action

April 1, 2012
English Language

English Language (Photo credit: Wikipedia)

Gratitude into Action

I almost died. Be clear that I do not mean that something was so funny that I almost died laughing. I mean it literally: the functioning of my organism almost stopped suddenly.

Well, to be even more specific, let’s say that I was very scared. My heart rate shot up, my body eventually relaxed to catch my breath, and then shivers and shaking went through my body as I adjusted to the surge of chemicals like adrenalin.

Can you relate to this? Have you even experienced something similar?

I’ll tell you exactly what happened a little later. Before that, I am inviting you to use your own imagination and intelligence… rather than bias you with the particular details of my own history of a particular case of almost dying- or being suddenly exposed to the possibility of dying… like “ah, I notice that I could have just been killed. How interesting!”

So, you personally would have at least witnessed someone who gets “scared to death,” right? Sure, but not just startled- I mean really clear that their physical organism is temporary, conditional, something that begins and then ends, something that belongs to the earth itself, not to our linguistic ideas, not to our ego or our family or our government, but that ultimately belongs ONLY to God, if you like that word.

Again, I do not mean God as a particular linguistic ideal either, like loving or wise or old and white-bearded like Santa Zeus. No, I mean God as the indescribable, the one word that we know is beyond regular words, the ineffable, the mysterious, the great unknown (uncontainable) that is so far beyond our capacity for language that we can conceptually accept only that it is absolutely beyond our understanding, beyond “what we know that we don’t know.” We have no idea what the word God means, and, in the one exceptional case of this particular word, we actually might just even admit it!

Hebrew mystics have four letters for it, with each letter representing a distinct idea built in to the sequence of four related ideas, but they consider that sequence of letters to be a sacred encoding which is not to be said out loud. The Taoists even directly say this: “the Tao that can be spoken of is not the Tao.”

One cannot meaningfully declare one’s definitions of it. If one defines it with other words, that is not it. I mean by the word God this: THE fundamental linguistic unit that points to the conditionality and inherent emptiness of all other units of language.

Letters and alphabets begin and end (like in the history of a particular species or culture). Formations of an individual word begin and end- like the words “internet” or “blog” or “quark” are rather new while an ancient language that is known to have existed may now be otherwise forgotten, like an extinct species that is now just a distant legend or a big rack of dinosaur bones in a museum.

So, words come and go, and the meanings of words can change. The use and function of a particular word formation is thus ENTIRELY contextual (not inherent).

For instance, the sound of the word “right” means three distinct things. Right is the opposite of left. Right is also the opposite of wrong. Right is even a legal category distinct from privilege or any act that is prohibited or punished (as in some act that is criminalized by law: by the drafting, proposal, adoption, declaration and then the evolving administering of some new law or treaty or amendment or constitution).

However, to someone who does not know the English language, the sound of the word “right” is just a meaningless sound. Ask your pets. Even human infants do not know right from left. We either learn or else we still don’t know, and then we may go senile and forget.

Even the shapes of the letters forming the word “right” are just shapes. Each letter is just a shape. The G and the H do not even have a sound in that word, yet without those silent letters, “rit” is just not spelling it “write.”

So, we can easily demonstrate physically which is “right” and which is left, but there is nothing sacred about those terms. In sailing, we might use the terms “port” and “starboard” to refer to the same or similar distinctions. In other language or contexts, we use other sounds or words or letters or alphabets or encodings.

But the word “God” is not like all these words that are contextual, that is, inherently meaningless. God is not the opposite of the Devil either. I do not mean gods like the archetypical psychological distinctions of mythological astrology. I mean like what the Chinese call the Tao.

Ludwig Wittgenstein

Ludwig Wittgenstein (Photo credit: Wikipedia)

If we had to use a relative term of description to distinguish the term God, we might say that the word God is the opposite of all other words. It’s not like the others at all. Given that, to say anything, we would be limited to all those other words that are like that one, “God is not like those” is really about all we could say.

God is just what “we don’t know that we don’t know.” (I borrow that particular phrasing from

Face portion of a casual photo at a meeting.

Werner Erhard. (Photo credit: Wikipedia)

Wittgenstein… which Werner Erhard and then Landmark Education borrowed in turn- though none of them called it God or anything else, as far as I know.) Other than “we can’t describe it in words,” we obviously can’t say much about it, can we?

So, as I said before, I almost died. Here is what actually happened.

Back in the days of elementary school, Johnny and I were both crammed in to the front passenger seat of his mom’s car. I was sitting next to the door and Johnny was on my left (or, for you boaters, portside of me).

Johnny and I were in our dark blue cub scout uniforms and we were probably late for a cub scout meeting. She was taking a sharp left turn when I found out that I had not closed the passenger door all the way. It may have even been a car in which the door did not actually stay closed. Cars can eventually fall apart, too, you know!

So she’s turning the car left and I’m flying out of the open car door to the right (starboard). Johnny grabs my left hand and then I look down for one of those eternal moments at the hard black pavement speeding by me just a few feet under the soft tissue of my face.

So, maybe I did not quite “almost die.” But I did almost fall out of the car. I was as scared as I could ever recall being as of that time in my life- so not just scared of heights and shakily climbing back down the ladder from the diving board of the “high dive.”

This was not just a recognition of “I’m scared that I could have been hurt.” This was “there were cars and trucks coming from the opposite direction. I could have been run over and smashed like the flattened little animals on suburban and rural roadways everywhere. Like the insects on a car’s windshield. Like my body could have been creamed- cremated without even using a hot furnace.”

The Grouse Inn on the A624 above Chunal, near ...

The Grouse Inn on the A624 above Chunal, near Glossop, where Ludwig Wittgenstein stayed in May 1908 when he was studying in Manchester. See Ray Monk. Wittgenstein: The Duty of Genius. The Free Press, 1990, p. 29. Also see “The Grouse Inn”, grouse-inn-glossop.co.uk, accessed 12 September 2010. (Photo credit: Wikipedia)

Oh yeah, I was definitely a little boy. Those are the kinds of descriptions that little boys can give, yes, even while they are poking holes in antbeds and mindlessly ripping leaves off of trees and tearing them to shreds… perhaps not unlike the legless body of a grasshopper over here and a neat stack of legs over here.

“Yes, I stacked the legs here. What do you think they just stacked themselves up like that? See how neatly I stacked them! Guilty? Why would I ever feel guilty about ripping the legs off of the grasshopper? After all, this is a heroic act. I did not feel guilty about destroying the nest of the ants, but since I had done that and they were already running all over the place, I thought that I might generously feed them this grasshopper, and, you see, grasshoppers are otherwise rather uncooperative with the entire prospect of being fed alive to ants, so you can see that the legs being attached to the grasshopper simply did not fit with my program for being generous to the ants. They just had to go. Now that I think about it, I suppose I can feed the legs to the ants later as well….”

By the way, if you do not think that your little boys have ever done any of those kinds of things (or your husband or father when they were little), well, you could be quite wrong. By the way, ladies, yes, some men will lie to you just toreduce the possibility of you going into hysterics.

Then they may casually continue carving up the turkey and tell their urban-raised grandkids fabulous stories about the turkey farms where the turkeys are raised from seeds, transplanted as saplings, and, then in the prime of their lives, volunteer to join in for an (of course) entirely bloodless harvest… in which the edible part of the turkey plant is severed from the roots. If you haven’t heard this story before, that may simply be because I personally am not your grandfather…. 😉

Ah yes: Thanksgiving- that is a holiday that was started by the Native Americans and then “borrowed” from them, you know, kind of like the rest of their culture (and continent). People may not like to admit it, but reality can be harsh. While you’re being grateful for food and family and a solid building you call home, I’m not going to ask you to remember the turkeys that gave their lives or the people who called this land their home several hundred years ago. That kind of sentimental musing is pretty-well covered in public schools already, right? Kids make turkey drawings from outlines of their hands. I did it, too. Yes, it is STILL cute and yes of course your child is still the most amazing artist in human history.

That’s all fine! You are quite welcome to be all gushing with sentimentality- go for it- but that is not what is there for me to say right now.

Life is fragile. It can end in a split second. The key word in the sentence “I almost died” is… almost.

The physical body is temporary. In fact, it is changing all the time. Just ask a teenager that is halfway through the doorway of physical maturity. Just ask some elderly person that you know as someone who used to be able to walk, but now they do not even remember that they could walk.

The physical body is changing all the time. Just spend two hours with a newborn- but make that second hour a week later than the first- and you may find that a lot can change in a week (or a month or a year or a decade or a century).

Then, to top it all off, just spend an entire minute with a grieving parent who has just been informed that their school-aged child… has just died surprisingly, like in a traffic collision in which the child flew out of the passenger seat right into the path of the school bus that you were driving. Oh, and, if you are really open to experiencing heart-opening gratitude for the fragility of life, be the one to tell them the news.

Now I could end the sharing here and it would be wonderful- at least wonderful that the sequence of gruesome stories are over- right? However, there is a reason that I began this essay which I have not revealed yet and I am going to mention it soon and not just briefly. (No, it does not involve blood. That would be gross!)

So, I thought of the title “Gratitude into Action” because of a specific interest in a particular type of action. Yes, it happens to be Thanksgiving, but if you did not already know, I am not especially sentimental about it. I picked that title because some readers might be in the mode of focusing on gratitude.

Great. So am I.

But I did say “into action.” And I did have a specific category of action in mind, and I’ll tell you what action in a bit, but first a little re-cap of this essay so far.

First, I thought of the words “I almost died” before I thought of the particular incident. Next, I was going to share with you an incident from my adulthood, but then I chose to use an incident involving me as a child. (Why? Well, this story just seemed like it would be a lot of fun to tell!)

So, by being confronted with the immediate possibility of dying as a young boy, I was suddenly grateful for life anew. Can you get that? The whole section up to now has simply been so that you can really get that by now, as we shift attention toward an obvious action that can naturally follow such a breakthrough in gratitude. The obvious action is the one that happens automatically even without anyone suggesting it.

Yes, as a young boy, I almost fell out of a moving car. Of course, to say that I almost died is pretty dramatic.

I was merely mortally frightened, which is rather different from being mortally wounded and having my parents pacing the floor of the hospital emergency room, waiting to hear the next bit of news from the paramedics and so on: “Is he going to make it or not?” No, it wasn’t that close to dying, but I wanted you the reader to be able to have a sense of the fear of that little boy (me) without it being too unnerving (and then, for my own amusement if not yours as well, I eventually moved on to what little boys may sometimes do to grasshoppers…).

Ludwig Wittgenstein's five siblings: (back) He...

Ludwig Wittgenstein’s five siblings: (back) Hermine, Helene, Margarete, (front) Paul and Ludwig. (Photo credit: Wikipedia)

So, in that event of almost falling out of a moving car, I was not even physically injured at all (thank you, Johnny Elam). By the way, no, we were not wearing seatbelts.

Guess what, though? For at least the next few weeks, if you had seen me, you might have seen a little boy so attentive to buckling his seatbelt that he would be buckled in before he would even close the car door. “Ah, it’s just a little rain and wind. This will help remind you not to leave papers stacked on the backseat of the car where they can blow all over the place, mom! But at least I’m safely buckled, huh?”

So, I was going to say that Johnny was grateful for me, and that is why he grabbed me and slowly reeled me back in to the car. But that spontaneous digression I just took about me being suddenly grateful for life anew- and thus automatically attentive to wearing seatbelts- that is an even better fit with where I was already going.

Here it is. In the last several years, I have experienced a foreclosure of a home. I’ve also been repeatedly financially destitute- like more than just once or twice- in the last seven years. I’ve even spent a little time in jail (which can be both be a result of and a cause of financial trouble).

In recent years, I’ve also spent a lot of time working in a law office, ironically, that specializes in helping people who are experiencing financial challenges to file bankruptcy. Starting in mid-2002 (long before working with the law firm), I also started researching financial trends, including global trends in the lending markets. As time went on, I focused more and more on the specific financial patterns of the middle class of the US in the last few decades- as well as the psychology behind those trends of activity. But, for a moment, let’s ignore the long-term and just focus on 2008.

Some people experienced quite a startle financially in 2008. Companies that had been extremely unstable for quite a while were recognized by the masses to be unstable upon the publicizing of those companies filing bankruptcy or or least nearing bankruptcy: yes US auto giants, but also mainstream financial institutions including Merrill Lynch, Wachovia, Fannie Mae, Freddie Mac, IndyMac, Countrywide, Bear Stearns, Washington Mutual, and even the world’s largest insurance company, a US company that many in the US were not familiar with: AIG.

By the way, in my experience, most investors in the US were not only oblivious to the reality of the financial instability of those mainstream financial institutions, such that they were actually surprised by the announcement that those companies were near bankruptcy- kind of like driving at night without headlights or gambling at poker without looking at the cards- but most Americans are generally oblivious to the entire rest of the world. That is why many Americans do not know AIG even though it was the biggest insurance company in the world (as well as a US company).

The governments of places like Iceland almost went bankrupt in 2008, but how many Americans care about that? The financial crisis is all over Europe, too – very severe in places as far away as the UK and Japan, “but what does that have to do with me personally?”

Systemic (global) issues can have personal implications even before a person finds out about them. Yet, many people seem to actually think that when they found out that mainstream financial institutions were unstable… is basically when the instability started. That is like thinking that when the first raindrop hits you, that is when the clouds started to gather.

But you can see the clouds in advance of the rain actually falling- if you only would look- right? People simply have neglected to look at the stability of various mainstream financial trends- nationally and globally. Those who have looked (and are competent to interpret the simplest data) have seen for years what is coming. Those who have not looked, in contrast, have lately been very surprised- many quite unpleasantly.

In the US, college professors from the most respected institutions in the Ivy League (Harvard, Princeton, Yale, etc…) have been publishing books on the culminating of global financial instability for years (such as Elizabeth Warren, Robert Shiller, and Paul Krugman). Private researchers have been also warning about it for years or even decades (including Robert Prechter, Jim Shepherd, and myself).

Most investors, however, have presumed that their own abundance and prosperity would be safe… to such an extent that they did not look at the cards before placing their bets (bids) on aggressive speculation in real estate. But that is just the start of what I mean by oblivious.

Even people who have been directly warned of what is easily predictable have failed to invest in responsible research of “due diligence” and taking precautions- that is, they have invested in losing huge amounts of prosperity, they have gambled against very unfavorable odds and then been surprised upon losing it… for they had simply presumed that certain investing strategies that did well in the 1990s for instance would do well, what… forever? People in places that have not had the severe real estate declines (yet!) of Phoenix or Las Vegas seem to simply dismiss the idea that it could happen to them personally. I call that denial. That is exactly what I witnessed in Arizona for the last 7 years as I have warned handfuls and then dozens and then hundreds of people about the particular instability of real estate markets dependent on “easy lending.”

In Phoenix, Arizona, where I happen to be at the moment, many real estate speculators gambled big on aggressive real estate borrowing in recent years- even having been directly warned! Subsequently, many have already lost half of the value of their home, dropping the home values far below the amount owed on the home, which exposes them to bankruptcy and a loss of most or all of their assets (including many retirement accounts). Many of those retirement accounts lost up to half of their value with the stock market decline across 2008. That means that by entering huge debts not covered by the realistic long-term value of the home, then failing to sell stock that were severely over-priced, many people who were new millionaires have gambled away their entire net worth- such as by partnering ridiculous real estate gambling with over-confident stock investing. How often I have found that the two go together: obliviousness to risk in stocks and real estate.

But gold will do great right? Oh, here come the people comparing recent events to the late 1970s, again completely oblivious in their abject denial of the simple realities pointed to for years by researchers who have the remarkable distinction of… accuracy! But why consider those folks when there are people on TV pointing to the light at the end of the tunnel and saying “it simply could not be a train. In fact, there is obviously no such thing as a train.”

So, I’ve gone on for a bit now about financial instability and how people tend to be oblivious to risk and then, when they find out about the historic risk by the public announcement of the bankruptcy of the next mainstream institution or government, much of the middle class then just wants to blame someone else for the results of their own investing strategies. Many want some other government to come and rescue that other collapsing government program. They do NOT want to make any personal adjustments. After all, they are patriotic folks worshiping politicians and constitutions and words (and neglecting the simple truth of the God beyond all other words).

Taking responsibility and making personal adjustment would be ridiculous, right? These “surprised” investment gamblers are like pregnant women who act mystified when “suddenly” their water breaks. “Who knew? I was confident that this company was doing fine, and then they filed bankruptcy. Who is to BLAME for this shocking development… which, by the way, was obviously unpredictable (and which I may have been explicitly warned about for several years now)?”

So, kids, wear your seatbelts. Adults, do not sit two kids in the front seat, especially if you are late and inclined to take sharp turns. Close the doors securely and lock them.

Investors, get in contact with someone competent to review the stability of your finances- not by virtue of a TV show or a government license, but by virtue of clear competence as in a long, verifiable track record of accuracy in regard to identifying risk and opportunity well in advance of the majority of the mainstream. Also, do not just stop at someone competent in forecasting, but invest in the services of those familiar with the specific ways that you can put your gratitude for your financial abundance into practical ACTION.

For instance, you can begin by sheltering your finances from predictable market developments, reducing exposure or totally diversifying out of de-stabilizing markets like real estate, commercial commodities, and most stocks. Instead of being unpleasantly surprised, benefit from those same predictable market developments. For those that would benefit from it, shelter your finances from the default exposure to tax and court liability by using the most conservative protections built in to those systems. For those valuing debt relief, explore conservative negotiation options, perhaps including the possibility of filing bankruptcy- not as an imperative, but as a precaution- and just explore it. (By the way, as I have been explicitly telling folks for years, as the lending markets further de-stabilize, having a good credit score may not matter as much when there are “suddenly and surprisingly” not any lenders left to lend.)

So, sure, be grateful for your food today and every day, for your family and friends today and everyday, and for the solid buildings in which you dwell, and certainly for cars and the seatbelts within them. Just remember that the clouds have also gathered. The winds have started to blow. Many mainstream financial institutions that were already unstable were recognized by you to be unstable as of 2008… the winds blew down the houses made of straw cards built on sand. (I do like to mix my metaphors, don’t I: the story of the three little pigs with the house of straw, plus a house of cards, plus the scriptural reference of building on foundations of sand or of rock.)

I’m rather light-hearted about it, yes. And, it is quite serious. Many people are about to have their houses taken from them, not by high winds or floodwaters of New Orleans, but by their own investment choices. And then they will be in the rain. And they will complain and blame and some will call for rescue. All I am asking you is if you are willing to be ones of the ones in a position to help… at least to help a few of them.

Those who are deeply mortgaged into real estate, won’t be soon… either one way or the other. Which do you choose: whether you will be dry or wet when the thunderstorm breaks, when even the people who only worship words will be faced with the God of all words? We can wait until then to know God speechlessly, or just go ahead right now. Be grateful for every single aspect of your life… for so long as you shall live… starting as soon as you choose to stop doing anything else.

Related articles
Related articles

Tags:, , , , , , , , , , , , , , , , , , ,
Posted in Uncategorized | Leave a Comment »

When will the US recover… and is it guaranteed?

March 22, 2012

published Aug 14, 2010

Sometimes people ask me what I do. If I give them a short but explicit description, it is common in recent years for them to ask me as a follow-up question: “so when will there be an economic recovery?” Maybe you have heard that question or even ask it yourself.

I have been asked that particular question, perhaps in slight variations, literally hundreds of times. In contrast, I have never been asked- again literally never, to the very best of my knowledge- “will there be an economic recovery?”

Apparently, almost no one questions that a recovery must be inevitable. They only want to know if it will arrive in weeks or months or what (like perhaps only hours or minutes).

Further, they want me personally to tell them in advance now my answer to their question of “when will there be a recovery.” They obviously recognize that the recovery that they used to think was already happening… might not be yet. I think what they are really asking is how soon do I think that the US economy will recover- or at least might. In other words, they may not want to know how long it may be until a recovery (a “worst case scenario”), but how soon a recovery might happen (a “best case scenario”).

So, for those of you who share that question, I have some good news and I have some bad news. The good news is that the recovery has already started. Isn’t that wonderful? The bad news is that the recovery that has started is not the recovery that people have been asking about.

I can explain. First, though, I’d like to comment on the recovery that they are talking about: the recovery of the US economy. The US economy is based on the actions of the population of the US [and all international transactions involving the US or even just involving US Dollars]. In fact, the US economy is nothing other than the actions of people of the US.

So, the US economy will recover when the people adjust their actions. The recovery will not be delivered by anything other than a revision of the actions of the people of the US. If there were to be some huge technological advance in the US, that would still be based on the actions of the people of the US.

The recent de-stabilization of the prices of various markets was simply a fluctuation in the behavior of people. Any future stabilization will simply be a fluctuation in the behavior of the people.” The economy” is the behavior of the people.

So, when will the US economy recover? It will recover when the masses of people adjust their behavior toward much more economical investments of time and talent. If the people do not invest their behavior toward economical investments of time and talent, there would be no return to economical investments of time and talent, no return to economy, no return of a thriving economy.

A thriving economy is purely behavioral. It is also not guaranteed. There may be no return to economical behavior in the US and thus no return of a thriving US economy.

Now, what are economical investments of time and talent? Which ones are economical can change over time. Economical just means an efficient method of producing the valued result. So, what people are telling me when they ask the question “when will there be a recovery” is that they are waiting for one to arrive (like a package to their door).

They are not producing an economic recovery. They are not economically adjusting their investments of time and talent, or not intentionally. They may be waiting for a thriving economy to be delivered by a politician or a bureaucracy or by the Federal Reserve or by Federal Express.

“No, sir, you won’t have to sign for the brand new thriving economy to be delivered directly to you. We’ll just leave it at your front door if you are not home.”

So, back to the good news: the recovery has already started. Again, the bad news about this good news is that the recovery that has already started is not the one you ordered to be shipped directly to your door from Washington, D.C. Further, since this one did not come by Federal Express, you cannot return it. You are stuck with it. Here is the nature of the recovery that has already started:

The purchasing power of the US Dollar is already recovering. Wait: that sounds like it might be good news, actually? What could be so bad about the US Dollar recovering purchasing power? Well, that is also pretty simple.

When the US Dollar recovers purchasing power, that means fewer dollars can buy more stuff. For instance, US Dollars can buy more US real estate now than the same number of dollars would buy a few years ago. Or, US Dollars can buy more of the stock shares of most any US company. Or, US Dollars can buy more of most any commodity than the same number of dollars a few years ago, with the notable exception of gold.

“Ah,” some say. “Even more wonderful!” After the immense decline in the purchasing power of gold from 1980 to 2000, the purchasing power of gold has been recovering for nearly ten years now. However, that trend may have already ended, too. Trends do have that tendency: they eventually end.

So, let’s imagine that someone- perhaps you- were to ask me the following questions: “when will the ongoing recovery of the purchasing power of the US Dollar end? When will the US Dollar resume it’s long decline of purchasing power? When will prices of real estate and stocks and commodities rise against the US Dollar again?”

To those questions, I can give a clear, simple, and definitive answer: “not yet.” More specifically, when the people of the US change how they use US Dollars (or, since a lot of people outside of the US also use US dollars, when humans change how they use US Dollars), then their change of behavior will be a change in their economy. The economy of all of these people is “the economy.” The behavior of the people is “the economy.” There is no other economy but behavior.

So, in the last few years, people are being more economical with their dollars. This is the recovery. This is the increasing of the valuing by the people of the US Dollar by their actual behavior.

This is also the decreasing by the people of their valuing of debt and credit. They value actual cash dollars. They are reserved- in terms of their actual behavior- about getting deeper into debt and also about giving other people more credit. They want other people to pay off their old credit. They value cash way more than IOUs.

In prior years, there had been much more aggressive chasing of new debt and issuing of new credit to others. The behavioral trend of “pay for it later” has peaked and reversed. The behavioral trend of “pay for it now” has resumed… or “recovered.”

Again, this is the recovery! By the way, it is far from over.

The “recovering” or strengthening of the purchasing power of the US Dollar is both incredibly obvious but amazingly unrecognized.Lots of people actually are witnessing the ongoing recovery of the purchasing power of the US Dollar and then calling it a collapse in the purchasing power of the US Dollar. While that mislabeling is totally absurd and silly nonsense, it is also quite popular- more and more popular month after month recently. In fact, you may know quite a few people talking about an emerging threat of inflation and you may even have been one of them.

Most people do not recognize the simplicity of it because they do not even consider the possibility that the US Dollar could simply be recovering purchasing power. Most people did not know that they may have been grossly under-valuing cash because of easy access to credit.

Most people are probably concerned because they are still grossly under-valuing the US dollar and still grossly over-valuing real estate and stocks and so on, perhaps because they own lots of those still grossly over-valued assets and hope that some government or central bank can save them from the behavior of all humans in relation to their new increasing preference for actual cash US Dollars over accountings of credit, such as those denominated in US Dollars.

“When will the next political savior protect us from the recovery of the purchasing power of the US Dollar? When will the savior correct this horrible recovery, fix it, interrupt it, stop it, cancel it, and guarantee in writing that the credit bubble of the US economy will resume it’s inflating and stop deflating?”

Okay, fine. Let’s just get this over with….

I hereby admit publicly that I am your personal savior, if you really want one at least. Now, as your new savior, I promise you- yes, in writing… this very writing which you are now reading- that no matter what investments you already have, they will produce the best results ever and you do not have to change anything. You do not have to sell things that are over-valued. Just forget I ever said anything about that. In fact, that wasn’t me.

So, instead of you adjusting your behavior, I will arrange for all the rest of humanity to adjust their behavior… so that their behavior makes the specific investments that you already have increase in purchasing power. If your investments have lost value, I hereby guarantee that the recovery has already started of the lost value and further that a continuous and accelerating increase in the the purchasing power of those specific investments you already have is underway and eternal and unchangeable.

Yes, this goes for all of you, no matter what your various investments. If you have a bunch of cash, I guarantee that your cash will increase in purchasing power more than anything else. If you have a bunch of real estate, I personally guarantee that your cash will increase in purchasing power more than anything else- oops, no, I mean your real estate!

Or, if you own stock market investments, I guarantee that those will increase in purchasing power more than anything else, again, no matter which specific stock investment you may already have: US, Mexican, Chinese, Japanese- whatever. Oh, and if you own a bunch of bonds for any government or corporation, I guarantee that those will be the best possible investments for you to already have.

In other words, whatever investments you already have, I personally guarantee those to be the very best investments of all possible investments, and not just temporarily, but forever. However, I did say that there was some bad news, right…?

Well, once you elect me Holy Roman Emperor, in addition to relieving you of any concern for personal responsibility regarding the future purchasing power of whatever investments you already have, I also promise to relieve you of your ownership of them. Remember, that is just what Emperors do! Seriously, what did you expect?

You may know the proverb that God helps those who help themselves. Obviously, that is just wacky. Worship me, your personal savior, Satan. I guarantee that whatever you think you want to hear, I will tell you.

Anyway, now that we have got all of that out of the way, who  is going to be next to personally adjust to the emerging recovery of the purchasing power of the US Dollar? Who is ready for me to assist them in investing safely and wisely, receiving easy gains consistently? Anybody? No one? Anyone? Hello? Is anyone there? Is this microphone on? Can you even hear me?

What’s that? You want me to tell you what? Oh, first you want me to tell you when the US economy will recover. Ah! Well isn’t that an unusually interesting question?

So, when will your investments recover- no, sorry… “when will the US economy recover?” Right- I apologize if I ever implied in any way that you were actually interested in the value of your own personal investments. Obviously, given the last few years of complacency, you have no personal interest in the value of your own investments. You just want to know- like any good nationalist patriot dependent ward of the bank- when the US economy will recover. Okay, let’s just take a quick little peak at a chart of the last 18 years of the US stock market:

By the way, I’d like to apologize about the chart. Just ignore that blue line. Just pretend it is not there. I’m so embarrassed about this….

No, of course, you don’t want to know about stock markets that are currently making all-time highs, like the blue line charted above of the prices of the stock market of Mexico. You just want to know when the recovery of your own personal- no, right, I mean the recovery of the US stock market and US economy and so on, yes, when THAT recovery is going to happen- precisely how soon exactly– and when the horrible recovery of the purchasing power of the US Dollar will end. (Keep in mind, by the way, that we know that the recovery in people’s demonstrated behavioral valuing of cash cannot actually be happening because, um, because, um, because, uh… oh: our personal savior on TV said that she is really concerned about inflation, so we should be, too.)

Okay then: the red line is for the US. Again, I am so sorry about confusing things by showing you the data for the ongoing strong activity of the Mexican stock market, up a measly 2,600% in the last 18 years.

So, back to the red line for the US, I will personally let you know when it recovers to a new high. Yes, just as soon as it recovers to a new high, I promise that I will personally let you know.

Just a moment, please. Thank you so much for your patience. We apologize for the delay and while you are on hold we’d like to remind you how much we value your loyalty as our customer. Yes, I’m still watching the line very closely. Again, thank you for doing business with the US economy.

Hmmm… you know it does not appear to actually be recovering right at present moment. But… let’s just give it another few seconds. Oh, I know: have you checked to see if your unit is plugged in to the wall?

HEY! I think we may have something here:

Oh, again- very embarrassing. My mistake. I have no idea how THAT chart got in to this presentation.

Yes, the yellow line down there- that is the US NASDAQ stock market. It’s still down about 50% from it’s peak in the year 2000, you know, basically in the same range it has been since, um… shortly after that peak in early 2000.

Oh, are you raising your hand? Okay, you have another question? Sure, go ahead, yes, you can ask a question… even a stupid question. In that case, I’ll probably just give a stupid answer!

Ah, what about the other lines on the chart? Yes, my mistake. Please do not bring that up again- it such a shame that they accidentally got put on that chart of the 50% decline in the US NASDAQ in the last 10 years. Sorry for any confusion. Again, just ignore them. They are not important at all.

You do? Really? Well, alright: just for no reason at all, here are what the other lines show:

The green line, up by about 100%, is the stock market of Korea (as in South Korea). The blue line, up by over 200%, is the stock market of India. And the red line, hmm, what IS that red line?

“HUI?” Now, why does that sound familiar to me?

Oh, right: HUI is the sector of the US stock market that I featured in my first published investment commentary in early 2003! Well, look at that: hasn’t it done rather well!

However, again, please ignore all of those other lines. Those are only important to people who are asking questions like “which markets have recently been strongest” or “which investments have been profitable?” Those kinds of questions are for people who take a personal interest in the actual consequences to them personally of their investment choices. You just want to know when will the US recover, right?

I mean, if you wanted to know which investments are the current focus of competent investment market forecaster with an established track record of predicting and explaining in advance all the major changes in global financial trends for the last several years, well then you would not still be exploring this presentation, would you? You would be contacting me about partnering with the reality of the immense opportunity emerging, wouldn’t you?

By the way, the US Dollar is not really recovering. The US Dollar does not actually do anything. People have just changed their behavior in relation to the US Dollar.

Oh, and investors have changed their behavior in relation to selling out of US real estate markets and selling out of US stock markets, but as investors have been selling or de-valuing certain investments, many of them have continued their patterns of increasing their investments into the stock markets of Mexico and India and Korea. But, seriously, what kind of person would be interested in investments that are actually gaining in purchasing power?

Obviously, those people clearly lack faith in the false prophet, the great Satan. It’s just shameful, isn’t it- actually caring about the personal consequences of one’s actions, the personal consequences to one’s self and family and nation and so on? I hope those people all move to Mexico… or India… or Korea, don’t you?

I mean, seriously, are you STILL exploring this presentation instead of contacting me personally right now? That’s just plain wacky, isn’t it!

Related articles
Related articles

Tags:, , , , , , , ,
Posted in Uncategorized | Leave a Comment »

the state of the west- enron, aig, and the ponzi economy

February 29, 2012

"false profits?" is that right? is that a reference to 'fraudulent" accounting reports?

Image via Wikipedia
Here is my short version of “the state of the developed nations of the West,” including a declaring of a problem, opportunity, and solution. Note that, strictly speaking, it is just one possible interpretation.
Consider that there are cycles of centralizing and radiating. In fact, both radiating and centralizing are always present.
Another way to express that is that life is a process of redistributing energy towards what is adaptive. Whatever is less adaptive
radiates it’s energy toward whatever is adaptive, centralizing energy in what is most adaptive.

In the economies of the developed world, I assert that there is too much centralization of influence. In other words, there is not

English: IS-3. The "Joseph Stalin" t...
Image via Wikipedia

enough radiation of responsibility.

Instead, there has been a trend toward the centralization of responsibility, a trend toward the abdication of influence toward increasingly remote bureaucracies, a trend toward economic dependency. By the way, all trends begin and end, as in, reverse. That is why they are called trends.
There are basically two ways that the trend of centralizing in the developed world could reverse. Either there can be a radiation of responsibility toward the masses of the developed world or there can be a centralization of responsibility away from the developed world toward the developing world.
In fact, those alternatives are not exclusive. Both can happen.
The second alternative is the simplest of the two. The developed world can redistribute decision-making authority for it’s economic activity to certain portions of the developing world, specifically, the remaining primary sources of oil, led by Saudi Arabia, but including the various members of OPEC. For many decades already, affluence and influence have been shifting away from the developed world of the West toward the middle east.
The other alternative is the easiest of the two. The developed world can re-distribute it’s centralized decision-making to the masses of the developed world. This may sound very attractive, but it may be much less likely than a simple re-distribution of influence to the oil-rich Middle East.
English: Shows traditional location of "F...

Image via Wikipedia

The mainstream of the West has been in trend of abdicating responsibility (influence) in a few ways. There is the trend of expecting for governments to provide for the masses, whether by social service programs in general or by the latest economic rescue interventions, including the idea of political salvation provided by regulatory bureaucracies.

But the big ones may be more subtle. There is also the trend of the abdication of responsibility on the part of investors. Speculative investors have abdicated financial responsibility to huge corporate bureaucracies by purchasing shares of major corporations without any awareness of the industry, the operations of the company, or the finances of the company.
American International Group
This is why shareholders are surprised when Enron or Merrill Lynch or AIG file for bankruptcy; the investors often did not ever know anything about the finances of the company. They relied on stockbrokers and government regulators and accountants and lawyers.
These passive shareholders of the largest companies in the developed world have been speculatively investing for unearned gains, but they do not accept personal responsibility for the results produced by the businesses that they own. This includes share ownership indirectly through mutual funds, annuities, and even pensions. The owners have abdicated financial responsibility to professional managers, whether managers that are agents of the corporation or of the regulating government.

These owners tend to be surprised by crashes in stock marketsand the values of their own stocks. They tend to claim that they have

Merrill Lynch & Co.

Image via Wikipedia

been betrayed by their professional managers. They project responsibility for the natural results of their own speculative investing on the taxpayers, lobbying for bail-outs paid for by “somebody else.”

With insurance companies, the abdication of responsibility is even more stark. Millions of people pay small premiums in order to receive huge promises of benefits from insurance companies that do not have anywhere near the funds to cover all of their promised coverage. When enough claims come in at the same time to a business that does not have close to enough money to fund all of its promises, of course AIG could need an urgent $85 billion rescue program.
Again, most policy holders would express surprise to find out that the insurance does not actually have anywhere close to the total amount of money that they have promised to pay out. Such is the state of the balance between personal responsibility and abdication in to dependency with the eventual blaming of the professional managers, rather than a recognition of the immense risk of the speculative investor in insurance policies, hoping that their gamble would pay off with aboslutely no attention to the financial capacity of the insurance company to eternally maintain it’s legalized “ponzi scheme” of using new premiums to be able to afford to pay out all new claims.
Note that insurance companies do not inherently reduce risk. Insurance policies merely transfer financial risk to someone else. When governments agree to be liable for risk, as in the case of the FDIC insurance program, that does not actually reduce risk. It just means that instead of customers and owners bearing the risk themselves, taxpayers who had no involvement in those transactions are receiving the bills for the risk.
The idea with government regulation and risk-sharing is that governments could implement programs to actually restrict operational risk. While they could do that, government programs to manage financial risk are not always successful, as in the case of the former Soviet Union. By the way, the dissolving of the Soviet Union is an instance of the radiating of influence and responsibility away from a centralized bureaucracy.
Coat of arms of the Union of Soviet Socialist ...
Image via Wikipedia
Finally, more extreme than passive speculative investing or relying on the bureaucracies of insurance companies and government regulators is real estate financing. Historically unprecedented financial risks have been entered by speculative borrowers gambling on financed real estate investments for unearned gains.
They may have been drawn in by slogans like “why rent when you can buy” or “real estate always rises” or “no down payment required and pay no interest for the first 24 months.” Still, they gambled not only with their down payments, but with enormous amounts of credit, typically hundreds of thousands of dollars at a time.
All together, one might conclude that in the devloped West, there is an unsustainable concentration of dependency on massive bureaucracies (both governmental and corporate). This includes dependency on bureaucracies of media, education, and, increasingly, health care.
Still, all of those issues may be mere symptoms of the simplest: the developed West has too much dependence on dwindling foreign resources, especially oil (the source of gasoline). Consider the example of  westernized Japan, a developed country extremely dependent on foreign oil; In Japan, the last 21 years have notably punished real estate speculators and stock market speculators for less than adaptive choices.
In the European Union, the last decade has followed much of the sequence of Japan in the 1990s, with gasoline prices there exceeding $10 per gallon in the UK and Gemany in 2008, crippling economic activity, credit markets (including real estate borrowing and lending), and forcing many speculative stock market investors to sell urgently to access cash to avoid foreclosure and bankruptcy. Why? After spending much more cash than they had projected on fuels like gasoline, they needed cash fast and selling stocks was much faster than selling real estate. After it’s all-time high in late 1999, the UK stock index of the FTSE 100 plunged 50% by March 2003.
On to the US, by 2007, there was a general recognition of a notable real estate decline (which started showing up in mid-2005 in previously leading markets such as Phoenix and Las Vegas). Further, speculative stock ownership was also punished with an 18 month decline of 56% in the US S &P 500. Note that by 2007, there was also a general public recognition that rising fuel prices were impacting the budgets and choices of most portions of the US economy.
However, rather than retract the influence that they have abdicated to massive bureaucracies, much of the West remains invested in stock market speculation as well as continuing to gamble that real estate prices will recover. For many, their hopes are increasingly desperate, as their real estate has lost so much value that they might have to pay more than a hundred thousand dollars of negative equity just to exit from their real estate speculation. More and more people have been exploring alternatives like bankruptcy protection and negotiated short-sales of “upside down” real estate.
There could be a simple solution, but how open are the people of the West to being willing to be directly responsible for taking the action that could result in a simple solution? Unless investors within the developed West are willing to reclaim financial responsibility by definitively exiting their deflating speculative investments in such things as passive ownership of stocks and financed real estate, there is little chance for an economic recovery by Japan or Europe or the US.
Instead, many complacent investors of the developed West are calling for increasing dependency by centralizing responsbility further toward massive bureaucracies, especially governments. If that trend of rejecting responsibility continues by Western investors speculating for passive unearned gains, it may assure the rise of the developing OPEC nations in to a position of being the unriveled superpower of global affluence and influence.
King Abdullah ibn Abdul Aziz in 2002

Image via Wikipedia

published: July 20, 2011
re-published as a post: February 29, 2012
Related articles

Tags:, , , , , , , , , , ,
Posted in Uncategorized | Leave a Comment »

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: http://www.gold-eagle.com/editorials_03/hunn030303.html
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: http://www.gold-eagle.com/editorials_04/fibonacci110704.html
“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: http://www.financialsense.com/fsu/editorials/2005/0906.html
NAVIGATING THE NEW ECONOMY
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: http://www.financialsense.com/fsu/editorials/2005/1217.html
RESCUING THE MAINSTREAM FROM “THE NEW ECONOMY”
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: http://www.gold-eagle.com/editorials_05/hunn072107.html
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: http://groups.yahoo.com/group/redpill_info/message/491
Stop Gambling: Quick!
Get Rich: Safely.
This article warned of the pending acceleration in the decline in US stocks.

March 3, 2009: http://www.gold-eagle.com/editorials_08/fibonacci030309.html
A Cure For The Common Misunderstandings
About Financial Markets
The title is rather clear.

3/4/09: Private distribution email (redpill_info link)
http://groups.yahoo.com/group/redpill_info/message/592
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...

Image via Wikipedia

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

Related articles

Tags:, , , , , , , , , ,
Posted in Uncategorized | Leave a Comment »

Bakken, oil, crisis, & prudence

February 17, 2012

This is an exchange between myself and “DK.” She sent me a broadcast email with a subject like this: “OIL – You better be sitting down when you read this !!!!!!”

Her email is about the Bakken oil field in the US. Her email referenced two figures as the total estimated amount of oil there: 503 billion barrels and 2 trillion barrels. She cited an article from the USGS indicating that the accessible, useful oil was more like 3-4 billion barrels:  http://www.usgs.gov/newsroom/article.asp?ID=1911 

USGS Logo

Image via Wikipedia

Here was my initial reply:

According to the USGS article that you cited at the bottom, only a few
billion barrels are currently classified as recoverable, or less than
1% of the 503 billion barrels referenced elsewhere.

Let’s put that in perspective. 3 billion barrels of oil is
approximately an extra 16 months of oil at the current rate of
production in the US (which has been near 6 million, but may have gone
up in recent years).

So, if oil production is up in the US already and even if the US
doubles production for 16 months, yes that will be a[n]… increase in
the global economic balance of affluence. 3 billion barrels of oil
does correspond to an extra 300 billion dollars or so of value.

However, what was the US government‘s spending in 2011? $6 trillion,
as in 20 times as large as the extra 300 billion dollars of economic
affluence represented in the USGS article.

Is that 300 billion dollars of value trivial? No! Does it
fundamentally change ANYTHING long-term? Not yet!

DK replied back to me:

JR,
Thanks for your insight.
What can the average person do to pressure them to do the right thing?
D.

Hi DK,

Respectfully, I do not know who you mean by “them” (or what you mean by “the right thing”). [I now presume that she meant the US government.] Let me give you some of my perspective on the general subject.

Starting in early 2003, I have invited people to consider the actuality of trends and to adapt to those actualities, such as the shift in the long-term price of fuel. For the last several centuries, fuel prices have dropped dramatically (in “real” terms as in after adjusting prices for the fluctuating purchasing power of currency).

One of the ways that economists (as distinct from accountants) have measured the cost of fuel is this: how long does it take the average person to earn or produce the capacity to produce an hour’s worth of candlelight? You may have heard of measuring the brightness of light in “candles” and that is what I am referencing. The time-cost of producing an hour of one candle worth of light has gone from a large fraction of an hour centuries ago to under one minute and finally to under one second. The same kind of measurements can be done in regard to one unit of “horsepower.”

Human civilization has radically altered in recent centuries with the collapse in the cost of energy (fuel). Amish people and others have not participated much in the “boom” related to the huge decline in energy costs, but the huge ballooning of human population in recent centuries is the direct result of the huge decline in the cost of energy/fuel.

So, in 1999, that multi-century trend of declining cost of energy may have reversed. Starting in 2004, I wrote and published articles referencing the reasons that energy costs were rising and the predictable consequences of any continuing rise, which I did predict would continue.

I have noted that the average decline of 40% of the stock prices of the US airline industry in several months in 1999 [red line above] went along with a quick doubling of global oil prices [blue line above]. [Also, the green line above shows the simultaneous decline of the financial sector of the US stock market.] Further, I have consistently documented the general shift in the economies of Japan, Europe, and the US toward the economies of OPEC and other oil-producing regions (including places like Alaska, North Dakota, and the province of Alberta).

Japan’s decline started in 1989. The USSR, which was the #2 oil-producing region on the planet (and still is), has also collapsed politically since then (dissolving in to smaller political units). The EU (including the UK and Germany, etc) as well as the US have been declining now for over 10 years at least, depending on the exact measures used. [Below is a long-term chart of the UK stock market, which peaked at the end of 1999.

My assertion is that the global political history of the 20th century can be summarized in a few words: the rise of oil. Next are a few paragraphs summarizing the 20th century:

The prior two major powers, Great Britain and Germany, fought two massive wars against each other (world war one and world war two). In ww1, Britain won. In ww2, Germany lost.

But who won world war two? The USSR and the US did. In WW1, those two countries were not even major powers. However, after ww2, those two countries dominated much of the world and they even split Germany right in half between those two allied victors.

Britain did not get occupied like Germany did, but Britain did not get a portion of Germany either: just the US and the USSR. Britain did not win ww2. Germany lost (along with Japan and Italy) and the winners were the US and USSR. Further, lots of other folks (France, Poland, etc) could also be said to have lost or at least not to have won.

So, those two “superpowers” of the US and USSR had very different political systems and very different cultures, but those two nations rose from relative obscurity in the 19th century to become the top two global powers in the 20th century. What did they have in common was oil. In the 20th century overall, the US led the world in oil production (and consumption). In the early 1970s, the USSR surged past the US in oil production, leading to a significant power shift and the rise of OPEC to prominence.

In the latter decades of the 20th century, as the USSR and US slowly fought over regions like Afghanistan and Central America, the USSR eventually lost and crumbled. One of the most devastating economic events for the USSR was the joint effort by the US and OPEC to drive down global prices of crude oil, which was the main source of revenue for the oil-exporting USSR.

Normally, when a company produces something, then want to sell it for maximum profit. However, with the US and OPEC colluding to drive down oil prices, US and OPEC companies (like Aramco, the Arab American Oil company which controls much of the oil industry in the Middle East) sold oil for much lower prices than they could have. Governments may even outright subsidize oil production so that private companies can sell oil at a loss, but still receive tax incentives or other incentives so that the governments can drive down international prices of oil for political purposes.

American International Group

Image via Wikipedia

So, what is there to do about any of this? Recognize it. Adapt to it. Benefit from change. Reduce exposure to risk (like protecting assets using the fullest extent of the law while those laws still exist, settling debts rigorously, and investing wisely).

This is a time of unprecedented opportunity. Why? Because so many people who are currently so wealthy (in the US and EU) are so naive (if not arrogant) in regard to what is happening.

The mainstream middle class (not just in the US) have been taking immense financial risks with no appreciation for the basics of economics or investing. Most people do not understand the simple ponzi scam of the insurance industry and thus consider casino gambling and state lotteries to be less risky than their investments in ridiculous long-term annuity contrasts. There is nothing as risky as the global insurance industry, which is the largest concentration of financial risk in human history. AIG was not a fluke. The 2008 financial crisis in the US and EU was not a fluke. Myself and many others predicted it. People see the financial issues with the government of Greece or of the US, but a glance at most any insurance company might reveal a much less favorable long-term financial stability.

So, The investments that will be most valued in the next few years are almost completely ignored by the mainstream as of now. That will change and suddenly, which can produce huge increases in price.


By huge, I mean larger than the 1200% increase in the price of oil from 1999 to 2008. I mean larger than the 1600% increase from 2000 to 2010 in the stock prices of the HUI index of 15 conservative gold and silver mining companies. Those were certainly quite large gains. Some gains, however, are huge, like historically unique.

So, I am not especially interested in speculating as to what is they right thing that other people could do (such the US Congress or the leaders of OPEC or AIG or NATO). I am interested in identifying what I could do, in what results I can help individuals to produce with me, and in then producing the results that I value.

Related articles

Tags:, , , , , , , , , , , , , , , ,
Posted in Uncategorized | 4 Comments »

best case planning (like HUI’s 1600% rise and a 90% reduction in credit card debt)

February 12, 2012
Credit Card

Credit Card (Photo credit: 401K)

BEST CASE
Planning

Once you know what is best,

you stop doing any less

BEST CASE INVESTMENT RETURNS:

BEST CASE LEGAL PROTECTIONS:

Could you produce gains of at least 1600% per decade?

Could you protect your assets, reduce taxes and legal fees, & even settle debts for as little as 10% of what you owe?

 After the two graphics below, more details follow:

Below are a few quick details relating to the 1600% gains.


I have been focusing on that top-performing US stock sector (HUI) since March 2003:

 

HUI had already risen 250% in the 18 months from late 2000 to mid 2002, then it faltered and next recovered to be just below the prior highs by early March 2003 when I was preparing that article. Here is another quick highlight from that early 2003 article:

As for the $20,000 reduction in credit card debt, here is the full settlement offer from the credit card company. You can zoom in on this page or click on the image to open it in another window.

 In the next set of images, I highlight the basics of the discounting of the debt, plus at the end I show what the credit card company specified in regard to consequences for the credit record of the debtor. Since the debtor had been quite delinquent with over $22,000 owed, that reduced his credit score, so to have the total debt drop by over $20,000 might have improved his credit-worthiness quite a bit.

 

Acceptance marks displayed on top left of this...

Image via Wikipedia

Related articles

Tags:, , , , , ,
Posted in Uncategorized | 5 Comments »

is 1984 BBC anti-government propaganda?

February 9, 2012
Some groups of people may establish systems of organized coercion, also known as governments. The rest of us may call those people the rulers, the leaders, the elite, the patriarchs or “the founding fathers.”
Then those groups who establish violent governing systems with courts, regulations and of course armed law enforcement mercenaries may publicize their systems. They may create propaganda systems to further influence the attention, perception, and behavior of the target populations, including even to produce anti-government sentiment. There are two basic kinds of propaganda of course: (1) propaganda to promote compliance as in the perception of legitimacy of a particular system of organized coercion and (2) propaganda to entice the disloyal to identify themselves and take some action to justify the re-education, correction, punishment, or even the execution of those cultivated rebels.
The cultivating of rebels in order to identify them was the theme of George Orwell‘s famous book 1984, in which Winston Smith volunteers to participate in an anti-government conspiracy, which happens to be a false front operation of the ruling government. Oddly, many people seem to miss that point and instead interpret the book as merely a criticism of tyranny. To present the basic behavioral patterns of tyranny is not to criticize tyranny, but simply to direct attention to it.
Category:George Orwell Category:Nineteen Eight...

Image via Wikipedia

Ideally, the flow of anti-government sentiment cultivated by propaganda is typically kept moderate, as in a steady trickle. However, there are times when a clash between governments may be produced (like the invasion or “liberation” of one government by another). Prior to that, there may also be a larger polarization (as in first divide and conquer next) in which the morale of a population is reduced by anti-government sentiment being cultivated more than usual.
Civilian anti-government protesters may even be enticed to confront riot squads and tanks. Typically, such confrontations go rather poorly for the civilian anti-government protesters.
More protests may be used to justify more draconian measures. More draconian measures may be used to justify more protests, and so on it goes.
If indigenous populations rebel, governments may increase the frequency of bombing. If slaves rebel, governments may tighten policing and encourage lynching and torture, perhaps protecting (through the politically-directed discretion of local government criminal prosecutors) those in league with the government who commit atrocities.
 
Police Tank in Tunisia 
Wise tyrants know that the best way to neutralize anti-government protests is to be the ones who start them or at least to infiltrate them and guide them, sometimes with funding and training. For whatever reason, former employees of intelligence (spy) agencies like the CIA or the KGB may be among the most celebrated leaders of anti-government conspiracy. “Ex-CIA agent criticizes CIA” always makes for a dramatic headline, right?
When in the 1930s USMC Major General Smedley Butler presented his criticism of war (or at least of US imperialism in central America) called “War is a Racket,” it was published first by Round Table Press and then in condensed form by Reader’s Digest, achieving a huge circulation. However, how many people notice “Round Table” as the name of the publisher and what that name implies?
What if the publication of that content intentionally produced a wave of anti-government sentiment? If so, could the publishers have been producing anti-government sentiment (anti-US) on behalf of the interests of the US government? We might presume that anti-American sentiment would be cultivated by foreign enemies of the US, but, again, George Orwell suggested that governments may cultivate sentiment against the very ones doing the cultivating. Are they inciting riots in order to justify firing on anti-government rebel fanatics?
Police attacked by protesters in Algeria
Several years ago, the creators of the US TV show “South Park” had an episode parodying how having peace protests in the US looks good for international PR: “Yes, we are invading and occupying your country, but most of us are sensitive and peace-loving folks, so please don’t get the wrong idea about us just because we are dropping bombs on civilians (again).” I had never thought of that.
When I read 1984, I had never before thought that governments might entice rebellion for their own purposes, such as to identify isolated rebels and attract the rebels to throw themselves (armed only with big signs with anti-government slogans) at riot squads armed with… tanks. Now, I think of the practical value to governments of enticing anti-government sentiment and congregating herds of protesters. Some governments might even be so dishonest as to “plant” fake protesters among the sincere ones and then have those fake protesters do something dramatic like throw a rock or a molotov cocktail at armed government mercenaries, thus justifying the use of deadly force against the entire mob of protesters.
Tank of the Tampa Florida (US) Police Department (above)
There are three basic orientations that one can have in regard to governments: anti-governments, pro-governments, or neutral toward governments. Those who are generally anti-governments may be the least likely to perform those behaviors that result in rewards from governments that enhance social status, such as government contracts, but also compliance with laws, familiarity with the protections offered by a particular legal system and use of those protections.
In mid-2002, when I started researching the forecasting of trends, I had no idea what I was getting in to. I found not only trends of things like birth rates, but also of the inflation-adjusted cost of fuel, which had been dropping dramatically for many centuries, but then reversed trend in 1999. I also found trends in approval ratings of governments, as in trends in pro-government sentiment and anti-government sentiment. Further, those trends of social psychology closely correlated with trends of stock market price. Trends of stock market prices were an excellent predictor of things like the re-election of an incumbent President in the US as well as the sentiment ratings toward the current US President (which is apparently polled much more often than overall sentiment about the entire US government in general).
I encourage people to use the protections offered by any legal system. I do not say to do that because of any concern with morality or fairness, but what I call a practical concern.
If you can legally increase your net worth and profit, why not? In other words, if you can legally reduce your taxes, why not at least explore it? If you can legally reduce your debt, why not at least explore it?
Of course, I personally offer services in these realms, so it is not just that I am encouraging that people concern themselves with practicality first and things like morality and fairness only in the context of practicality. That is true, too. But I also specifically encourage people to use my own services solely for their practical value.
Protect your assets simply because it is valuable. Reduce your taxes and debt simply because it is valuable.
If focusing on morality is valuable, then do it! If focusing on fairness is valuable, then do it!
However, be aware that moralities vary from place to place and time to time. Practicality is always valuable.
Moralities are learned, as in indoctrinated from one generation to another, from one group to another. When the elite are propagandizing the masses as to the morality of a particular war and the immorality of a particular target enemy, that is just practical propaganda. It is valuable to the elite to program systems of morality in those ways, even if it is untrue that the target enemy is actually guilty of something like the possession of weapons of mass destruction.
First, condemn the morality of possessing weapons of mass destruction. Then, accuse someone of violating that morality. That is a very practical way to distract people from the clear and obvious fact that one is also violating that same moral code. Using weapons of mass destruction to punish someone accused of weapons of mass destruction… is a classic example of the practical amorality of the elite in governments and media outlets worldwide.
Arab leaders might have used the same principles of propaganda to justify something like an economic embargo against NATO: “economic embargoes are morally wrong, plus NATO is accused of planning an economic embargo against someone somewhere, therefore we must punish them by using an economic embargo against them.” The elite in one system may pretend to be quite different from the elite in another system, but, even with various notable differences, there may be tremendous consistency in their methods.

Governments consistently use organized coercion to collect revenues such as taxes. They also punish others for the unlicensed practice of extortion and racketeering. Only officials like government tax agencies are allowed to practice extortion and racketeering.
Blackmail and bribery are also illegal throughout the world, except for law enforcement agents when making deals with suspects to get more information about other suspects. In that case, blackmail, bribery, and even torture and threats of execution have been used quite consistently by governments for thousands of years. From police officials to the guards of prisoner of war camps, reservations, and internment camps, government officials use whatever methods they deem practical.
Governments may cover up atrocities when practical (or blame them on enemies, such as when the Soviets blamed the Nazis for the massacres at Katyn Forest in 1940). Governments also consistently offer lenience like presidential pardons to convicted criminals who are the friends or business partners of the ruling officials, such as the pardons granted to Oliver North.
So, shouldn’t we condemn the propaganda, organized coercion, deception, fraud, extortion, and racketeering of some or all governments? Well, that may be the reaction that we have been trained to have.
However, those who condemn such patterns of behavior may include many who practice such behaviors. For instance, let’s review the personal history of George Orwell:
From 1941- 1943, he was a propagandist for the BBC (the British government’s public TV station). Here is another interesting detail: “On the outbreak of World War II, Orwell’s wife Eileen started work in the Censorship Department in London.” By the way, while Americans might not know it, Orwell’s references to a “Ministry of Information” were not fantasy, but part of his daily life: http://en.wikipedia.org/wiki/Ministry_of_Information_(United_Kingdom)
English: George Orwell in Hampstead On the cor...

Image via Wikipedia

Was Orwell assigned by government officials to write his famous books? I don’t know. However, it is notable that the BBC made Orwell’s 1984 in to a TV movie in 1954: http://en.wikipedia.org/wiki/Nineteen_Eighty-Four_(TV_programme) and it did produce a wave of people identifying themselves to the BBC as outraged by the ideas presented in their TV broadcast of 1984: “The production proved to be hugely controversial, with questions asked in Parliament and many viewer complaints over its supposed subversive nature and horrific content.”
Also, if Orwell’s writing was so threatening to governments, then how is it that his two books Nineteen Eighty-Four (1949) and Animal Farm (1945), “together have sold more copies than any two books by any other 20th-century author?[5]” Isn’t it odd that I was introduced to the book 1984 as assigned reading in a public school class?
The book is represented as a condemnation written by a disgruntled BBC propagandist in 1948 (and published the next year). However, only 6 years after writing it, 1984 was made in to a TV program by the BBC. Isn’t that more than a little ironic?
Was the government station BBC intentionally stirring up anti-government sentiment in 1954? To propose that they were not is rather ridiculous.
Was Orwell intentionally stirring up anti-government sentiment? If so, why? Well, what did he write in regard to the intentional stirring up of anti-government sentiment in his own book? He indicates that anti-government propaganda can created by governments and used to stir up anti-government sentiment in order to create “thought criminals” and entice the thought criminals to identify themselves.
Again, I do not particularly condemn the use of organized coercion by governments or anyone else. For thousands of years, groups of humans have killed each other. To exclusively celebrate a particular occasion of organized violence, such as the US Revolutionary War or Civil War, seems odd to me.
One may be anti-violence or pro-violence, but why some of each? Other than after-the-fact moral justifications indoctrinated by propagandists on behalf of the winning group of organized coercion, I am not aware of any reason to celebrate (or condemn) any particular instance of organized coercion (or propaganda). Yes, wars in particular are dangerous- and governments in general.
But recognizing their danger does not imply condemning them. I also recognize the danger of sharks, airplane crashes, gambling, pharmaceutical drugs, heart surgery, and tornadoes.
So, former British government propagandist George Orwell’s anti-government propaganda was notably successful. Even the government liked it- or perhaps even especially the government there in the UK. The BBC took only a few years to make 1984 in to a movie. It took nearly 50 years for the BBC to make Huxley’s “Brave New World” in to a movie.
Again, though, the BBC, a government channel, made two of the most famous books of anti-government criticism in to movies. Isn’t that extremely odd?
I was assigned both of those books in public high school classes. Isn’t that also extremely odd?

Do governments ever cultivate anti-governments sentiment? If so, how often? Further, exactly how practically valuable is it for them to do so?

Do governments ever discourage people from using the protections promised by government courts? Do “political activists” ever threaten people with economic repercussions for their political activity? In West Africa in the 1990s, apparently thousands of people had their hands cut off for daring to vote “the wrong way” in an election that had implications for the global diamond cartel, DeBeers. In the recent movie “The Gangs of New York,” politics is presented as openly violent. If there is such a thing as political violence, then violence can be political and politics can be violent.
As for me, I promote the full use of government protections such as evicting delinquent tenants, reporting all sorts of crimes including white collar financial crimes to bring about the arresting and punishing of certain people, and the use of the most skilled and effective criminal defense lawyer that a suspect is able and willing to hire. Further, I promote the full use of government protections such as asset protection, tax planning, estate planning, and debt interventions including re-organization of one’s finances under bankruptcy exemptions and benefits. If someone chooses to volunteer more money than is legally required out of guilt, so be it. However, if someone chooses to exercise their personal discretion and personal responsibility to the fullest extent possible, so be it.
If some people create legal systems or alter them or even oppose and overthrow them, so be it. If some people use lobbying or bribery or diplomacy or any other means to produce changes in the regulatory policies and practices of any particular governing system, so be it.
If George Orwell and the entire BBC create anti-government propaganda to incite anti-government sentiment, so be it. If I tell “everyone” to Occupy Wall Street or put their money in to insurance industry ponzi scams or whatever else, so be it. Maybe I get commissions from it or maybe I am sincere as in just doing it to ease my own fears or a guilty conscience.
I forecast the major opportunities and risks of the last 9 years of the global economy. However, lots of folks may prefer to focus away from the actual practical risks and practical opportunities to instead argue about propaganda, government corruption, immorality, injustice and, of course, arguing.
“People should not argue. I condemn arguing.”
Or, on the other hand, maybe some people encourage others to argue because it is practically valuable for huge proportions of a target population to be arguing amongst themselves: Christians vs Muslims (as in NATO vs OPEC), Democrats vs Republicans, boys vs girls, etc. “Divide and conquer” is still practical, right?
Related articles

Tags:, , , , , , , , , , , , ,
Posted in Uncategorized | 2 Comments »

Stop arguing and ADAPT!

January 31, 2012

First a brief and funny video distinguishing what I mean by “arguing:”

This next video is an audio of the content below:

Okay, you may already know that I have held tightly to some rather strong political opinions. If you have known me for even just a few decades (or perhaps even just a few minutes), then you know that I think my opinions are the very best, at least until I change my mind and then my old opinions are just opinions and my new opinions are then the very best.

I have been a sincere and even stubborn political activist. I have campaigned for clean water, I have campaigned against at least one war, and I have campaigned door to door as a volunteer for former US Senator Mark Foley (of Florida). If you recognize that name, by the way, you may know that his political career ended rather quickly in a scandal.

So, I have campaigned and won but then been disappointed even with how that went. I have also campaigned and lost but then been grateful for the thing that I previously condemned and opposed.

Some of you may already be able to relate to that. Some of you may not relate to that yet, but may eventually.

I’m not really writing though about how stubborn I have been or how sincerely I have argued. I’m just mentioning all of that to establish a possible common link between you and I, plus to contrast something quite distinct from all of that sincere arguing that I previously have done about conflicts of political opinions.

When I was focusing of what other people should do and how they should do it (according to me), that was one possible investment of my time. If I was the owner of a big company or even worked as a supervisor over others, than it might be very important for me to focus on what other people should do and how. However, when I focused my time on arguing with other people about what they should do and what they should not do, I found that such an investment of my time could be frustrating, exhausting, and even disturbing.

Let me put it another way. I could get furious. I could get very upset. I could get defensive and condescending and argumentative and bitter.

Those were the results available to me from focusing on arguing with others. So, when I recognized the pattern connecting the behavior and the apparent results of the behavior- like an experience of something between disappointment and burning outrage- I stopped arguing. Maybe I argued again about the same topic or about some other topic, but my experience was that arguing was aggressive, like being pushy. Maybe I just was not very good at being pushy, but when I notice a lot of people arguing and then being upset by their own behavior of arguing, I wonder if a lot of us are not very good at being pushy. We must not be if we just keep pushing and pushing and pushing, right?

I was an opinion pusher. Further, I really wasn’t very good at it. I didn’t especially value the resulting experience produced by my behavior of pushing opinions. I was open to new results and new methods.

So, I began to study things like how people form their opinions- first studying particular opinions but eventually studying the whole process of the forming of opinions from the perspective of psychology and neuro-linguistics (NLP). I also studied behavior in general- and not just pushy arguing and not even just various forms of communication and language patterns. I studied trends in behavior and that led to studying the forecasting of trends in behavior.

In mid-2002, I was researching trends in general and got interested in economic trends in particular- or certain ones at least. I got interested in some unusual trends in the lending behavior of investors who were lending money to the US government (as in “buying” US Treasury debt). Actually, I was not exactly interested in those trends so much as some historical correlations that fit with those lending trends. That lending behavior corresponded to a high probability of recession.

I do not have the data that I saw in 2002 to show you, but I was looking at the US treasury yield curve and the following chart is of the simpler US treausry yield spread, yet this chart shows a distinct correlation as well. I do not know the source of this shart, but it implies that the spread (range) between the yield rates of various maturity periods of US Treasury was such that in the early 1980s, there was nearly a 90% probability of a recession (and official recessions are shown in gray). I do not know the background of this chart, but this gives you an idea of the kind of thing that folks like me were looking at, for instance, in 2002.

So, the author of that particular report that I was reading in 2002 was connecting the lending behavior relating to lending money to the US Treasury to things like the future of real estate lending in the US. He forecast a real estate crash. So did other authors that I had read by 2002.

I read forecasts of a continuing rise in commodities, especially fuel prices. By 2004, my published articles focused particularly on the growing US dependency on foreign-source oil, as well as the reasons that I expected a continuing rise in fuel prices and what I expected it to do to the economics of the US and EU (and continue to do to Japan).

In 2005, I was monitoring real estate trends and soon after the decline in mid-2005 in the real estate markets of Phoenix and Las Vegas, I published an article labeling that as the first wave of a much bigger trend that would spread throughout the US. Later, I asserted that the reasons that the two sprawling desert metros of Phoenix and Las Vegas had done so well and then so suddenly done so poorly was directly related to fuel prices.

Downtown Las Vegas, Nevada and Red Rock Canyon...

Image via Wikipedia

Sprawling desert metros are especially sensitive to fuel prices. When energy prices were at all-time inflation-adjusted lows in 1999 and were expected (by many people at least) to continue to drop, it was already cheaper than ever to live in the desert, even through the searing summers. By 2005, many new large homes in the outskirts of the sprawling metros had monthly energy bills of $400 or $500 or more- and that was just for a single residence. As energy costs rose, the costs for cooling the buildings of large businesses ballooned. Further, as gas prices quickly passed $2, $3, and even $4 per gallon, the long commutes from the distant outskirts in SUVs went up right along with the energy bill: like hundreds of dollars per month in expenses for commuting (rather than $100 per month as in the 1990s).

Did those ballooning energy costs have any relationship to the overall budgets and spending behaviors of those households (and businesses)? Did such energy costs effect the willingness of people to enter new big mortgages to live in huge distant homes that would cost hundreds of dollars extra per month in energy bills and commuting costs? Note that a big part of the real estate boom of the sprawling desert metros was internal to those metros- people moving further and further out to bigger and bigger homes. Could it be that eventually the huge portion of their budgets that they were spending on rising energy costs brought the real estate booms to and end?

In 2004, that is precisely what I forecast, along with many other competent forecasters. By 2006, I began promoting videos online that specified the implications of the emerging real estate crash on the mortgage industry and financial insitutions (lenders including banks but also FNMA, FDMC, and Countrywide). By 2008, as there was a wave of bankruptcies in the US financial sector (and in Europe also), I was looking for signs of the inevitable rebound.

In early March 2009, only a few days before the reversal and rebound in the US stock market, myself (and many others looking at similar data and correlations) published explicit forecasts of, in my case, “a multi-month rally” in US stocks. It lasted dozens of months, far exceeding the minimum targets that I forecast, but I have never had any reason to shift my long-term forecast that the rally of 2009-2011 was just a rebound within a much larger decline. I interpret data like the following two charts to support my published conclusions from 2003 for a long-term shift (not just what we have seen so far). The first one shows a conspicuous absence of any rebound in consumer confidence in the US in 2009 or 2010:

The second chart shows that the US economy’s new highs are based on all-time highs in government spending (and borrowing). While Democrats may celebrate the new all-time highs in the GDP of the US, they may not know that so much of it is from government spending, much of which was paid with borrowed money.

Of course, much of the private spending was also with borrowed money, including huge amounts borrowed from foreignors. While many Replublicans and Libertarians complain about the possibility of hyper-inflation, they may fail to assess the simple reality of the source of much of the increasing spending of the Obama administration: foreign-source lenders.

Huge government debts or deficits do not always resolve as hyperinflation (and I repeatedly have noted that the US government does not have authority over the US Dollar anyway, which is the private currency of a private business, the Federal Reserve central banking syndicate). Government “excess” also resolves by things like rocketing tax rates and, in some cases, default.

As a forecaster, one of my concerns was that the US economy has been relying on “too much borrowing.” First, there was too much private borrowing for things like real estate mortgages (and, according to me, there still is). Next, status quo politicians (of whatever party) produced what I consider too much public borrowing (for things like bailing out the owners AKA shareholders of financial institutions that got involved with the excess of the mortgage mania).

The solution for too much borrowing is not more borrowing. That has already been tried, such as in Japan in the 1990s and since then. Here is how that went for them:

In conclusion, let’s stop arguing politics and adapt to the reality of markets. We’re going to have to do that anyway eventually- just like the folks did in 2005 in sprawling desert metros with $400 per month electricity bills and $300 per month commuting costs. They got more fuel efficient cars and moved closer to where they work, even if that meant a smaller home and hundreds of dollars less per month in bills for “overhead.”

The people of Japan have adapted. So have everyone everywhere that has ever experienced a wave of economic conservatism. By the way, the decline in borrowing and the resulting decline in prices is simply a wave of economic conservatism. As for people who accuse me of negativity, I do not consider conservatism to be negativity, but if you do, that may effect your behaviors and the natural results of your behaviors- like whether markets reward conservatism most or reward something else most.

Here is a hilarious video about the kind of excuses people give for not adapting:

Related articles

Tags:, , , , , , , , , , ,
Posted in Uncategorized | Leave a Comment »

greed & economic crisis

January 18, 2012

NOTE: the following text is just a summary. The video below details a demonstration of the conclusions or presuppositions referenced below.

Greed is a form of fear. When one fears losses, one hopes for gains. When the hope for gains extends beyond one’s awareness of risk, then one can be surprised at a sudden recognition of risk. When greedy, one neglects risk. When greedy, one is afraid of recognizing the actual risks and so one is vulnerable to pretense.

Gamblers study risk, accept risk, and accept their results as the results of gambling. The greedy hope for someone to guarantee them opportunities without risk, then blame others for the natural results of taking naive risks, then hope for sympathy and salvation from others.
The video essay touches several subjects including investor psychology, the similarities and differences between casino gambling and gambling on real estate and stock markets, how greed can be considered the source of the global economic crisis, and how the insurance industry is a legally-protected Ponzi scheme.
http://www.TheDominOILeffect.com
http://www.OneEyedKingsWealthClub.com
http:/jrfibonacci.wordpress.com

Related articles

Tags:, , , , , ,
Posted in Uncategorized | Leave a Comment »

« Older Entries