By Monty Pelerin, on February 12th, 2010 For investors or just curiosity-seekers, how we escape from the economic mess is of interest. Jim Puplava at FinancialSense.com stated: “I believe that getting the inflation/deflation story right is the single-most important investment decision that needs to be made. It will determine the investment outcome of portfolios over the next decade.”
Investments that might be expected to do well in a deflationary environment will do poorly in an inflationary environment and vice versa. Thus, a reasoned determination of what lies ahead is critical for investing success. That determination and flexibility in case your judgment proves incorrect will be important to investment outcomes. For most investors, “buy and hold” should be considered dead. Arguably that determination should have been made a few years ago.
While no one can foresee the future, Chris Martenson has been more prescient than most. He presents a logical case for what is likely to happen below.
CHRIS MARTENSON’S BLOG
Austerity or Money Printing?
Wednesday, February 10, 2010, 8:42 pm, by cmartenson
I was asked to write a once-a-month Market Observation for Financial Sense. Here’s the first one (posted today, Feb 10):
From time to time, I think it’s a good idea to stop squinting at the short-term market wiggles and pull our heads back for a wide-angle view. Now would be a good time, so that’s what we’re going to do. For the record, I also happen to believe that close-up market analysis loses some of its potency during times
Continue reading Martenson’s Forecast for How This Ends
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By Monty Pelerin, on January 7th, 2010 Here is a good collection of articles from Chris Martenson’s site. These articles show no green shoots, and in no way are consistent with what the government wants you to believe. There is no recovery coming. See recent post about 2010 will be worse.
Take a look at Chris’ site. Be sure to watch “The Crash Course” that he provides online. It will provide a simple and thorough explanation as to why we are here and why getting out the hole is not simple (and I would say, not possible). He also provides good information as to how you might protect yourself and your family in the free “Crash” video.
Daily Digest – January 6
Wednesday, January 6, 2010, 11:01 am, by saxplayer00o1
Contracts down: Is housing headed for double-dip?
Pump prices on pace to top 2009 high by weekend
GMAC Says Lender Will Post $5 Billion Quarterly Loss
Silicon Valley ‘Bloodbath’ Leaves Buildings Empty
Manhattan Apartment Prices Fall as Finance Jobs Lost
Fed may re-enter MBS market later in 2010
TrimTabs suggests government manipulated stocks
Medicaid Long-Term Care Spending Tops $106 Billion
Missouri revenue drops in December, more budget cuts coming
U.S. business bankruptcies rise 38% in 2009
Homelessness and cold weather have shelters at capacity
Unemployment spikes demand for Census jobs
Promise to Trim Deficit Is Growing Harder to Keep
US public pensions ‘facing $2,000bn shortfall’
Over $26 billion borrowed by states for unemployment benefits
U.S. Budget Deficit May Exceed $1 Trillion for Years, Kos Says
read more »
Continue reading Martenson Sees No Recovery
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By Monty Pelerin, on December 5th, 2009 Massive liquidity injections continue to drive markets. Yesterday, a much better than expected jobs report caused the Dow to soar over 100 points at the opening. At the close, the Dow was up about 20, after going negative for part of the day. The dollar strengthened, and precious metals were crushed.
Despite economic fundamentals that continue to look awful, the stock market continues to hold and increase. Bonds declined the past two days, yet still have what seem to be ridiculously low interest rates.
How much longer can markets continue to levitate like Wile E. Coyote without terra firma? To paraphrase John Maynard Keynes, Wiley can probably levitate longer than the shorts can remain solvent. Despite Wiley’s performance, the Road Runner (beep! beep!) always wins in the end. For those long in these markets, think of the market as Wiley and economic fundamentals as the Road Runner.
Below is another outstanding post from Chris Martenson who is as perplexed as the rest of us.
Pumps On Full
Tuesday, November 24, 2009, 10:08 pm, by cmartenson
I am truly amazed at what I am seeing out there in the markets these days. I also understand and share the frustration of the many analysts who know what “should” be happening but is not.
What should be happening is massive, self-reinforcing deflation caused by debt destruction and resulting from the housing bust and retreat of consumer borrowing.
These are harrowing figures:
One in Four Borrowers Is Underwater
The proportion of U.S. homeowners who owe more on
Continue reading Do You Bet on Wiley or the Road Runner?
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By Monty Pelerin, on December 3rd, 2009
Economy
Wither the US dollar? (Al Jazeera)
Liquidity and the Fed The US Federal Reserve (popularly known as the Fed) is also unlikely to be defending the dollar any time soon. To prop up the currency, the Fed would have to buy back dollars which would require that the US offer euros, British pounds and Japanese yens in exchange. The Fed does not have much foreign currencies in stock because the US has been running trade deficits continuously for a long time now. The fact that the Fed does not have a war chest big enough to intervene credibly in the foreign exchange market on behalf of the dollar, paradoxically, discourages short and swift “shark attacks” – the massive selling of dollars by speculators in a very short span of time.
Iowa tax receipts continue to fall
The red ink continued to flow in the state treasury last month. The Legislative Services Agency’s monthly revenue report indicates that net state tax receipts fell by 7.9 percent in November. That marked the 11th monthly decline over the past 12 months and the 10th straight monthly decline. The nearly $2.32 billion collected so far this year in
Continue reading Chris Martenson Daily Read
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By Monty Pelerin, on November 25th, 2009
Four Horsemen of the Apocalypse
From Chris Martenson’s excellent website
The Dollar Bubble (Video)
(Quote from their earlier press release)The National Inflation Association is pleased to announce the release of ‘The Dollar Bubble’, a new 30 minute documentary about the upcoming collapse of the U.S. dollar and how the Federal Reserve’s destructive monetary policies could bring the U.S. financial system to an end.
Saab May Be Done
The future of Saab was thrown into doubt on Tuesday after General Motors announced a consortium led by Swedish investors pulled out of talks to buy the premium car brand. The deal’s collapse marks the second failure by GM in less than two months to sell a money-losing brand. In October, Penske Automotive Group abandoned a deal to acquire GM’s Saturn because of doubts about securing a long-term supply of vehicles.
Moody’s Finds Commercial Property at 2002 Prices
An index compiled by Moody’s Investors Service found that prices of commercial real estate have, on average, returned to levels seen seven years ago. The Moody’s/REAL Commercial Property Price Index declined 3.9% in September to 109.61 from 114.06 in August. Based on the index, prices for commercial real estate were 37% lower than in September 2008 and 42.9% below the peak measured in October 2007. The index is based on repeat sales of the same properties across the U.S. at different times.
Global sovereign debt to hit $49.5 trln-Moody’s
Global sovereign debt is expected to hit $49.5 trillion by year end, a
Continue reading Martenson — No Green Shoots Here
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Friedrich von Hayek
Friedrich von Hayek founded the Mont Pelerin Society.
“Monty Pelerin” is a pseudonym chosen by this blogger to convey general agreement with the philosophy, goals and spirit of the Mont Pelerin Society. No other connection exists between the blogger and the Society.
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