Bonds: The Most Important Asset Class

Bonds are without a doubt the most important asset class to grasp in this particular crisis. The fundamental problem with bonds is that our leaders had this genius idea that they could spend and spend year after year without repurcussions. As I’ve said before, this is a failure in our political system because the only way to get elected is to spend, spend, spend. And when the crisis does arrive?…

Gold

Today I will talk about the most divisive asset class of them all– gold. Even though real estate has been crushed, the general thinking still is that real estate is a good long-term investment. Bonds are still a viable investment for many people, as evidenced by falling yields. But gold? Good luck trying to convince people on that one. The most common arguments against gold I hear are: Isn’t gold…

E-Book Announcement and Some Thoughts on Real Estate

This week I will be writing about 3 asset classes: real estate, gold, and bonds.  I’ll write general public posts and then have e-books ready within weeks with some more information. Today I’m going to talk about real estate in the United States. To do well in real estate you don’t need a degree in economics or anything like that. What you do need is a good dose of common…

The Proper Thought Process for the Debt Crisis

As we enter truly perilous times, it’s important to have the right thought process. One of the reasons I hesitate to give trading recommendations is because it doesn’t prepare you for the future. It doesn’t help you think on your feet. The only people who will prosper in the years ahead will be those who can make connections that aren’t obvious. Learning is not about memorizing a whole bunch of…

Will the Market Ever Correct?

There is no doubt in my mind that this is the calm before the storm. Volatility has absolutely collapsed and the economy is showing some signs of life, leading pundits to believe that stocks are on an unstoppable push higher. There is a reason capital always gets wiped out in a debt crisis, and when extreme volatility finally does arrive, you will understand why. Even though stocks are overdue for…

Diversifying Across Asset Classes

It was said that Nero played the lyre while Rome burned. Well our leaders are doing the same thing; we should have emergency meetings every single day about the debt crisis, but we’re not. It’s the same old BS, and you can be sure that no change will occur unless it is forced upon us. Does anyone out there really believe Obama, if reelected, is going to do a 180…

Gold Rally to $1700

There seems to be some problem with the email list, so I’ll post today’s update here. Sorry, I’ll try to get the problem resolved. Today gold finally broke out of its range and breached $1700, which I’ve noted is a critical level. The rally came on the heels of the announcement that the Fed will continue its accommodating monetary policy until at least 2015. Of course this was obvious to all of…

Expecting the Worst, Starting in 2012

I remember when I started to get really bearish on the economy in 2007 that it was something I felt in my gut. Sure the data suggested something was wrong, but you could always use the powers of rationalization to ignore it. Well, this is the same sort of feeling I’m getting now; we are headed straight towards the worst crisis of the past century, including the Great Depression, and it…

Gold and Precious Metals

Understanding Unintended Consequences

As you get older and start thinking more, you realize there are more layers to even seemingly straightforward problems. When you are young, solutions are simple: If drugs are bad, we should make them illegal and put people in jail for using them. Or if we need to raise revenue, we should raise taxes on everyone, especially the rich. Perhaps this is the logic behind the saying, “If you are young…

More Confirmation of Economic Weakness

We received more sobering economic news today with the weaker than expected  jobs report. The unemployment rate of 9.2% is the highest of the year, which is news to me since our economy “officially” came out of recession 2 years ago. Employment in government fell for the 8th straight month, which is all part of the inevitable collapse of the public sector. This is bad news for our economy since…

Why Stocks Won’t Crash

It seemed like only a week ago when permabears were predicting the appearance of a new bear market that would take out the lows of 2009. The variables all seemed to be there: Greek debt crisis, inflation from higher commodity prices, and worsening economic data in the U.S. Most economic observers believe these kind of variables lead to lower stock prices. As you can clearly see, this is not the…

Some Thoughts On Freedom

In honor of Independence Day and the heroic founding fathers who fought against tyranny, I want to talk about the subject of freedom. I believe we need more voices of reason, like Ron Paul, in these crazy times, and I have no problem being one of these voices. A lot of people live their lives in fear of speaking the truth, but I could care less. No one has any…