The worst is yet to come

I have stated over time some things that have been proven correct. Here are some:
• The US is a fraud enterprise
• Real estate will drop at least 30%
• The Dow will drop at least 50%
• The USD will fall
• By the end of 2008 there will be tears on the streets

A couple still unfolding:
• Gold to hit 2k by the end of 2011
• We are heading into the greater depression

The fraud enterprise was proven to be true with the near collapse of the financial system. Unfortunately the fraud is still continuing. Large scale paper transactions add nothing of great tangible value to wider society and as long as it continues to go on unabated the free enterprise system will continue to be a fraud.

Real Estate has dropped more than 50% in some areas. Some think that real estate has recovered, however, I think this is delusional. There is a second and third wave coming, the commercial real estate defaults and the prime borrowers default. There will be no leveling off of the real estate market until around late 2011/2012.

The Dow did drop over 50% however I do not expect it go back down to that level but it would be better if it did. I expect it to trade within a range of 7k 11k for a while yet. However if it goes above 15k then heaven help us all!

The USD has fallen more then 50% vs CDN currency and has fallen very much vs all major currencies. This is the only way that the US can pay all of its foreign debt and meet all of its debt obligations. Expect the USD to continue to fall.

There was already tears on the streets in many US cities by the end 2008 and still continue to be the case in many major US cities, Detroit, LA, NY, Cleveland, to name a few. I expect this to get uglier as unemployment continues to rise.

Gold is today over 1K and I expect this to continue to increase in value. With all of the money being created in the US and worldwide, I expect gold to appreciate vs all currencies. The last time gold hit its high the ratio was 1:1 Gold vs the Dow. Take your pick either the Dow falls or gold increases or we have a combination and they meet somewhere in the middle. Even if the ratio is 2:1 for the Dow you can see the potential for gold to increase in value.

We are heading for a greater depression, when the combination of real unemployment and real inflation goes over 30 we have entered a depression. The combination of unemployment and under employment puts Real unemployment at about 15. Real inflation is currently close to double digits, I expect this to increase to at least 15%, hence the increase in gold price, and the Dow not falling back to its 2009 lows. If we ever hit hyper inflation then gold will hit some crazy highs and that would not be good for anyone of US.


It took us over 25 years to get to the peak of the economic and financial bubble and anyone who thinks it will unfold in 2 or 3 years need to think again.

At the end of the day, despite what the talking heads say, deflation is better than inflation. Inflation enables the ones in power to transfer wealth from the poor and working class to themselves as paper is worth less and less over time. In deflationary times paper is scarce and it is at least worth something more than in inflationary times.

I believe that the worst is not yet over, buckle up and make the moves that will let you go through this crisis with minimal impact, however, none of the poor, working or middle class will be spared, but, we can minimize the damage. Good luck!