Friday, November 09, 2007

Predictions Past and Future

In the past year I have learned alot from both writing this and reading other peoples work. What began as a silver blog has by necessity spread to comment on many other aspects of the economy, Canadian, U.S. and world.

Some weeks it's not necessary to mention what happened to gold and silver but little did happen, rather it's more important to highlight a greater trend, a new threat, or the corruption inherent in the system.

The past

With the year end approaching I thought it was time to consider past and future predictions. In mid 2006 I made a number of predictions to friends.

1. U.S. recession- While I can't prove it by Government stats- (they lie, they must lie: the current inflation numbers .8 percent is irrational,) a recession did start. Stats by John Williams of claim CPI of near 10% and negative growth for several quarters which feels correct to me.

2. Oil $100 - it's been too close to quibble- I made it

3. Silver $16- we've nearly hit it this week and I suspect we will break it by year end

4. Gold $900 , we've hit 840 and like silver I think the run will last till year end

5. A U.S. dollar melt down- this is tricky I said we'd break parity and might hit 1.10, we did but I did not expect it only last 1 day. I'll take this one too

6. I mentioned dollar melt down and U.S. fiscal crisis but I
apparently did not define myself well enough as some people have claimed these are too vague to quantify. I certainly think a 25%depreciation of the Dollar vs. the loonie counts as a meltdown, but to be honest I expected something much more drastic to happen to quality as a fiscal crisis.

7. I predicted lenders and banks would fail. This was a gimme to anyone who had read anything but my friends still did not
believe me. Well the number of mortgage companies that have disappeared, closed, filed for protection is actually quite huge and one bank,NetBank did indeed
file for bankruptcy protection. I felt we might get a big fist too but I have no doubt this will run 2 more years at least.

That was about it, I can't say I'm too pissed off about my predictions, I seem to have the trend right but I was a little to anxious or pessimistic for 2007. My biggest disappointment was my failure to see the credit crunch would weaken mining shares despite the actual metals preforming well. Equities are still far off 12 month highs despite metals are at 26 year highs. That sucks but does give us time to accumulate

The Future

I plan on building a very detailed list for 2008 with half a dozen trends, and particular price goals and even a series of expected political political moves. This is not going to be a road map for any ones investments other than my own but rather a fun little game to watch over the coming year.

For your part I'd like to hear some of your predictions. What do you see that I may not. What spoilt this years guesses. Mostly I'd just like some good natured discussion of the issues on the page.

Thursday, November 08, 2007

Fractional truths

The U.S. Government, federal reserve and the world banking elites have finally run out of wiggle room and a drastic rewriting of the norms of fiscal culture about to happen.

Over the last few years there have been voices in the wilderness who have seen this coming and have been ignored, sneered at, decried as cynics, doomsayers, depressed, unpatriotic but rarely acknowledged as being correct. A few of the notables are

David Walker Comptroller General of the United States who has been railing against the debt and unsustainability of the U.S. financial system.

Dr. Doom aka Peter Schiff, stockbroker, analyst, writer and uber bear, president of Euro Pacific Captial

Ron Paul, U.S. congressman, libertarian, Republican Presidential hopeful, strict constitutionalists and one of the few people in modern U.S. Government you understands money and economics.

The list is huge and includes the people behind so many websites, blogs and newsletters that could not gain access to the mainstream media yet have been telling the truth and helped to make people's investment choices safer and more lucrative in recent years. The bottom tier is people like me who after wasting their time NOT convincing their friends and family to protect themselves turned to the Internet out of communal duty

I think this segregation between truth and spin is about to be broken. Over the few months the severity of the housing crunch could not longer be hidden and mainstream new outlets have daily housing gloom stories. The large financial entities have had to report huge losses and write downs related to bad commercial paper, mortgages and this is all before the true destructive power of derivatives have been demonstrated.

The real jeopardy of a U.S. dollar crisis is in the offing and when newspapers like the Globe and Mail state blatantly Greenback on the Brink you know the days of ignoring or hiding the problem are over.

Frational truths

So if reporting the problems is suddenly becoming Vogue when will we see answers and strategies coming from the mainstream media?

My bet is no time soon. The media is part of the system and the system is run by banks, investment houses, brokers, industrialist who want you to do several things which are not necessarily best for you. This is what will happen in my opinion. Remember as long as you stay in the market the big boys can make money on both the up and down ticks of the market as well as hefty commissions

They will continue to tell you "the worst is over", "we've hit bottom", "recovery is imminent", the same as they did during the crash of 29, and the entire first year of the U.S. housing bust.

They will lobby and pressure the Governments to do what is best for them, not average investors.

The Government will lowering interest rates, legislate bailouts, and inflate away their debts by destroying your savings.

Canadian and Europe Banks will lower the interest rates and join in the U.S. dollar's race to zero value for the sake of saving industrial jobs that would likely become irrelevant in the later stages of peak oil anyways.

How this will unfold cannot be predicted 100% by anyone. Once panic and desperation shows up it will be chaotic and unpredictable but I so believe there are a few safe decisions to make.

Shed debt, downsize, delay major purchase and increase savings.

Investment money should be moved away from the most dangerous currencies, U.S. dollar and probably the Sterling(which I believe is also headed for a break). This includes cash, bonds, equities priced in the risky currencies.

If you must play in equities such as a self directed pension fund, stick to commodities, food, energy, metals, maybe infrastructure, water, consumer staples. Tech(non energy), electronics, auto,banking, aerospace, luxury goods are all destined to be losers.

Precious metals, real money that cannot be devalued to nothing, something that will reactive inversely to the destruction of any particular currency, something that cannot be counterfeited.

If you have the option acquire productive land. Be it currency crash, depression, unemployment, peak oil etc the greatest asset one can have is even a few acres and the will and ability to feed oneself. Despite my belief that silver and gold are a great investment, it is just that, an investment and one you cannot eat. The ultimate asset is productive land, while silver might buy you food, it only works until you run out of gold. If you have land too garden on you can save your precious metals for property taxes, medical treatment or other emergency purchases.

So while the sickness has been diagnosed I don't think the mainstream media will ever tell us the solution. If main steet media ever tells you anything like I have that will be the signal that it's be nearly over and it's far too late for you to jump in. Don't wait, make what ever changes you can. If you wait for frational truths to become complete truths, you'r sunk!