Tuesday, February 15, 2011
Markets due for a pull back
The Stock market is due for a pullback. Looking at my chart below you can see that over a certain threshhold the market always pulls back. This current bull has been running for a while and will go through a correction of at least 7%.
Sunday, May 9, 2010
More Trouble Ahead
Some of us for years have be forecasting everything that has unfolded so far and a few of us have gone even further to say that we would enter what would come to be known as the greater depression. We are officially in the greater depression. The media and politicians may look for many reasons to say that the economy is getting better, they will manipulate the unemployment numbers, the housing and GDP numbers to make things look rosy, however, until manufacturing and R& D full time employment increases the recovery will be nothing but a figment of imagination. Service sector jobs will not make the economy grow over the long term.
There is a wave or ARM and Alt-A resets coming starting in June and lasting till 2012; I expect to see many more foreclosures. Currently the inventory of houses foreclosed and coming up for foreclosures will take banks about 9 yrs to clear up; based on the current numbers of sales vs foreclosures.
The numbers:
• 11 million home owners currently under water on their mortgages
• As of March, banks had 1.1 million foreclosed homes – up 20% from a year earlier
• Additional 4.8 million mortgage owners are 60 days behind in payments or in foreclosure process
The ARM, plus Alt-A resets combined with a possible increase in interest rates will lead to sure disaster. I do not see any real turn around in the economy till around 2015 earliest. As I have stated before it cannot take 1, 2, 3, 4 or 5 yrs to undo 30 yrs of damage. Best case scenario is 8-10 yrs.
The economy will turn around for sure, but there has to be a true reset and the more the government interferes the longer the reset will take when instead the earlier would be the better. However, whatever the scenario, life in the US as we knew it has changed forever and will take many generations to return to that state, if ever.
There is a wave or ARM and Alt-A resets coming starting in June and lasting till 2012; I expect to see many more foreclosures. Currently the inventory of houses foreclosed and coming up for foreclosures will take banks about 9 yrs to clear up; based on the current numbers of sales vs foreclosures.
The numbers:
• 11 million home owners currently under water on their mortgages
• As of March, banks had 1.1 million foreclosed homes – up 20% from a year earlier
• Additional 4.8 million mortgage owners are 60 days behind in payments or in foreclosure process
The ARM, plus Alt-A resets combined with a possible increase in interest rates will lead to sure disaster. I do not see any real turn around in the economy till around 2015 earliest. As I have stated before it cannot take 1, 2, 3, 4 or 5 yrs to undo 30 yrs of damage. Best case scenario is 8-10 yrs.
The economy will turn around for sure, but there has to be a true reset and the more the government interferes the longer the reset will take when instead the earlier would be the better. However, whatever the scenario, life in the US as we knew it has changed forever and will take many generations to return to that state, if ever.
Sunday, March 14, 2010
Cuba is one messed up country
• Mortgage industry controlled by the government
• Financial industry controlled by the government
• Auto industry controlled by the government
• Healthcare industry about to be controlled by the government
Socialism and Communism never worked and never will, unless the intense passion for innovation is not important.
• Financial industry controlled by the government
• Auto industry controlled by the government
• Healthcare industry about to be controlled by the government
Socialism and Communism never worked and never will, unless the intense passion for innovation is not important.
Monday, December 28, 2009
My annual soapbox.
I am a vegetarian. I became one based on the unethical treatment of animals and it was my little way of saying that I will no longer support that part of the meat industry that ply its trade unethically. Also, currently, I have enough other choices that I do not need to eat meat, poultry or seafood.
My friends are pretty much all meat eaters but I believe that they are all ethical about it; in that they consume basically what they need and do not indulge in the pure gluttony that goes on in most of North America.
Why anyone would need to eat a 10 ounce stake, a rack of ribs, 25 wings, a whole lobster or veal (baby calf) is beyond me and just pure gluttony. There are many other examples. But the meat, poultry and seafood industry has only one interest and that is to make as much money as possible in any way possible, with absolutely no interest in ethics.
Ed, one of my friends, and I have discussed this very topic many times about the cruelty to animals and the pure gluttony of North Americans in general. We have also discussed what we believe is killing this planet and it is, simply put, over consumption.
People do not need to eat the above mentioned portions of food. People do not need to have a new cell phone every year people do not need to have a new laptop every year or two years. How many pairs of shoes do people need? These are just some examples.
Essentially, we need to live life and enjoy it, but with consideration for all other living things around us and the consequence of our actions on them. Therefore, as we indulge and live our lives from day to day, we should do things within reason, and realize that everything we consume requires energy to manufacture and grow and there is only so much energy on this planet. Also, the side effects of the process of growing and manufacturing can be very detrimental to this planet.
For example, much of the waste of the animals that we consume end up poisoning our water systems, and we kill over 50 billion animals per year to support our gluttony.
Happy New Year's everyone!
My friends are pretty much all meat eaters but I believe that they are all ethical about it; in that they consume basically what they need and do not indulge in the pure gluttony that goes on in most of North America.
Why anyone would need to eat a 10 ounce stake, a rack of ribs, 25 wings, a whole lobster or veal (baby calf) is beyond me and just pure gluttony. There are many other examples. But the meat, poultry and seafood industry has only one interest and that is to make as much money as possible in any way possible, with absolutely no interest in ethics.
Ed, one of my friends, and I have discussed this very topic many times about the cruelty to animals and the pure gluttony of North Americans in general. We have also discussed what we believe is killing this planet and it is, simply put, over consumption.
People do not need to eat the above mentioned portions of food. People do not need to have a new cell phone every year people do not need to have a new laptop every year or two years. How many pairs of shoes do people need? These are just some examples.
Essentially, we need to live life and enjoy it, but with consideration for all other living things around us and the consequence of our actions on them. Therefore, as we indulge and live our lives from day to day, we should do things within reason, and realize that everything we consume requires energy to manufacture and grow and there is only so much energy on this planet. Also, the side effects of the process of growing and manufacturing can be very detrimental to this planet.
For example, much of the waste of the animals that we consume end up poisoning our water systems, and we kill over 50 billion animals per year to support our gluttony.
Happy New Year's everyone!
Wednesday, December 2, 2009
The next decade
I have written many times over the years on my blog and various forums on where the US was headed. Some have been dire but all have been realized or are in the process of being realized. However, even though life has changed the world has not ended, in fact the world is not about to come to an end anytime soon. That being said the prospects for the next decade in the world does not look good.
The world is headed for a long depression, there is no doubt about it, as a matter of fact we are already in it. No country will be spared. The way we react to this as humans on this planet will say a lot about us.
Scenario one; for the most part, we are good to each other and share what we have with our “neighbors”. This would include countries helping countries and we get out of this in time with no major wars or chaos.
Scenario two would be that people and countries get so desperate that there is total chaos, stealing, killing for basic stuff, fire, riots, increased deaths through crime and through total neglect in society from health to infrastructure to car and home maintenance. Wars declared because countries will be trying to steal other countries resources with the official declaration of WWIII, before we get out of the depression.
We would all hope for scenario one but knowing common human behavior Scenario two is most likely. In that case, expect Russia, China and some Mid-eastern countries to be on one side, while the US, Europe and India will be on the other side. Where South America ends up will be interesting and I believe that there will be a major grab for control one way or the other of South American countries because it is resource rich. At the end of it, just like after WWII, expect a new world order with a redrawn world map either physically or ideologically. Us as individuals will need to take steps to minimize the adverse impact of scenario two.
It is very likely that there could be a bank holiday for some time where people would have no access whatsoever to their money or gold, or possibly even of the government taking or “borrowing” some of people’s wealth for “the cause”. My advice would be to keep some of your wealth out of the bank where you would have quick access to it. Expect runaway inflation and gold to hit at least 2k by end 2011. If we see hyperinflation expect, 5k gold and commodity price increases across the board.
Will it be scenario one or scenario two? I say scenario two but hope for scenario one. I have not been wrong on any of my forecasts so far but hope more than anyone that I am totally wrong on this one, but I do not live my life based on hope so I do whatever I can to make life bearable over the next decade. Yes the next decade will be very interesting.
The world is headed for a long depression, there is no doubt about it, as a matter of fact we are already in it. No country will be spared. The way we react to this as humans on this planet will say a lot about us.
Scenario one; for the most part, we are good to each other and share what we have with our “neighbors”. This would include countries helping countries and we get out of this in time with no major wars or chaos.
Scenario two would be that people and countries get so desperate that there is total chaos, stealing, killing for basic stuff, fire, riots, increased deaths through crime and through total neglect in society from health to infrastructure to car and home maintenance. Wars declared because countries will be trying to steal other countries resources with the official declaration of WWIII, before we get out of the depression.
We would all hope for scenario one but knowing common human behavior Scenario two is most likely. In that case, expect Russia, China and some Mid-eastern countries to be on one side, while the US, Europe and India will be on the other side. Where South America ends up will be interesting and I believe that there will be a major grab for control one way or the other of South American countries because it is resource rich. At the end of it, just like after WWII, expect a new world order with a redrawn world map either physically or ideologically. Us as individuals will need to take steps to minimize the adverse impact of scenario two.
It is very likely that there could be a bank holiday for some time where people would have no access whatsoever to their money or gold, or possibly even of the government taking or “borrowing” some of people’s wealth for “the cause”. My advice would be to keep some of your wealth out of the bank where you would have quick access to it. Expect runaway inflation and gold to hit at least 2k by end 2011. If we see hyperinflation expect, 5k gold and commodity price increases across the board.
Will it be scenario one or scenario two? I say scenario two but hope for scenario one. I have not been wrong on any of my forecasts so far but hope more than anyone that I am totally wrong on this one, but I do not live my life based on hope so I do whatever I can to make life bearable over the next decade. Yes the next decade will be very interesting.
Saturday, November 28, 2009
The US as we know it is dead
In an economy two sectors provide employment; private and government. When government grows it does so at the expense of the private sector. This is the case right now in the USA. This may be ok for a while but then where do the government get the revenue for its programs? It can do one of three things; increase taxes on the population, decrease the size of government or increase the money supply. The first one will lead to more hardship for the already overtaxed population. The second; well what are the odds government will get smaller with government being involved in banking, insurance sector, mortgages and now soon to be; healthcare. The third one; well that will lead also to increase taxation on the population via inflation
There is a real possibility the Government will increase taxes on the rich; this will not work. Increasing taxes on the rich may work for a short while, however, over the long term it will not. Eventually the rich will pack up and leave either physically or at least their business interest, taking even more jobs with them. The government will try to stop this by limiting the movement of wealth. They have already taken some drastic steps by imposing themselves on the Swiss government resulting in the loss of anonymity which is what made the Swiss banking system worked as well as it did. If anyone wants to start moving wealth out of the US they had better start doing so soon, because the US is becoming more and more of a communist state in the laws they are imposing; from security to finance people are losing their privacy and freedom.
There are a lot of changes to be made if the USA is to ever go back to what it used to be, I doubt whether we will see all of those changes. At least not over a short time
If anyone doubts that the US is getting more and more into financial trouble here is one last bit of information for you; current government spending as a share of GDP is around almost 40%. The last time it went over 40% was during the Great Depression.
I strongly believe hat the US is dead as we know it and will never go back to what it was during the last 30 years. Yes, like I have before, life as we know it in the US has changed forever.
There is a real possibility the Government will increase taxes on the rich; this will not work. Increasing taxes on the rich may work for a short while, however, over the long term it will not. Eventually the rich will pack up and leave either physically or at least their business interest, taking even more jobs with them. The government will try to stop this by limiting the movement of wealth. They have already taken some drastic steps by imposing themselves on the Swiss government resulting in the loss of anonymity which is what made the Swiss banking system worked as well as it did. If anyone wants to start moving wealth out of the US they had better start doing so soon, because the US is becoming more and more of a communist state in the laws they are imposing; from security to finance people are losing their privacy and freedom.
There are a lot of changes to be made if the USA is to ever go back to what it used to be, I doubt whether we will see all of those changes. At least not over a short time
If anyone doubts that the US is getting more and more into financial trouble here is one last bit of information for you; current government spending as a share of GDP is around almost 40%. The last time it went over 40% was during the Great Depression.
I strongly believe hat the US is dead as we know it and will never go back to what it was during the last 30 years. Yes, like I have before, life as we know it in the US has changed forever.
Tuesday, October 20, 2009
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!
• 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!
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