Some critics say we’re like the Joe Bfstplk character in the old L’il Abner comic strip. Joe walked around with his own personal dark cloud hanging over his head.
We defend ourselves by saying, “You don’t understand. It’s probably worse than we than we think and we think it’s pretty damn bad.” Now it appears that a big-time Wall Street mover and shaker is singing our song:
There may be another round of quantitative easing in the U.S. and Europe remains volatile. What’s an investor to do? Get into gold, art and jewelry, Scott Minerd, chief strategist at Guggenheim Partners, told CNBC Wednesday.
“We’re in a ‘beggar thy neighbor’ era. Paper money is garbage at the end,” he said. “It’s a matter of relative values, about which garbage do you own.”
There’s gold, of course, but “I don’t want to get labeled as a gold bug,” Minerd said. “I’m in favor of any asset class which is a store of value, which gets you away from currency risks,” and that would include art, collectibles and diamonds. Over his long-term horizon, “all of these noncurrency-related assets are probably superior investments than looking at financial assets.”
Watch the entire interview. When Wall Streeters begin agreeing with the doom and gloomers at EconomicCollapse.net, it’s a sure sign that the apocolypse is nigh.
Dr. Marc Faber is known as Dr. Doom because, unfortunately, he’s a contrarian whose dark forecasts have been right on the money. He publishes a pithy monthly investment newsletter called The Gloom, Boom & Doom Report.
Here are five questions and answers we plucked from a recent interview with the Daily Bell:
Question #1:
Daily Bell: Do you still expect hyperinflation? Marc Faber: In my view, the debt level, especially in the US, if we include the unfunded liabilities of Medicare, Medicaid, Social Security and these entitlement programs, is beyond repair. And this will necessitate printing more money. Also, in my view, there is no real political will to address the issues, because who ever would cut entitlements, will not be re-elected. So we have a tyranny of the masses.
We all know how far U.S. housing prices have fallen. And they are still falling. But that’s against the weakening dollar. For another perspective, here’s a chart showing the decline in another currency: gold. This chart presents the median single-family home price divided by the price of one ounce of gold. In gold, the price of the median single-family home is down 80% from its 2001 peak.
You’ve heard it over and over: gold is in a bubble and it’s going to burst. Today, gold was off as much as $50 dollars, although it’s come back quite a bit. Right on cue television shows have been trotting out “experts” this morning to say that gold is looking very, very toppy.
I cannot predict where gold is going, but I can say from previous investing experience that bubbles can continue on for much, much longer than one thinks. I know I’ve been burned more than once not remembering this.
All bubbles eventually pop, but if in fact gold is in a bubble now, the accompanying chart suggests that there could be more bubblicious gains yet to be had. The chart compares the last 8 1/2 years of gold’s rise to the charts of the tech bubble and the real estate bubble. As you can see, if — and this is only an IF — a bubble is a bubble and the gold bubble will fully trace the other two bubbles, it’s only just begun, not having yet entered the parabolic stage.
Again, this is not a prediction or a suggestion to buy gold. Do your own due diligence. But personally, I believe all bubbles are alike, only the underlying asset is different.
Feeling good about the 10% the U.S. stock market gained in 2010? Forget about it. Or as Peter Schiff says in this video, big deal. Against other currencies, metals and commodities, you lost ground.
While we’re in Peter Schiff mode, here’s a debate he was in yesterday on some of the same subjects, and offers predictions for 2011:
Yesterday, John Hathaway, a managing director of Tocqueville Asset Management LP in New York, wrote a commentary on the coming dollar slaughter and the coming value of gold.
He concludes with the point that gold is not in a bubble now, as so many suggest. We couldn’t agree more. We’ve seen bubbles and this is no bubble. At least it is nowhere near the end of the bubble. The price of gold is merely mirroring the declining value of the dollar, and the expectation (and rightly so) that paper money will deteriorate considerably more, and faster than many believe.
John’s article, Gold Will Outlive Dollar Once Slaughter Comes: John Hathaway:
Jim Rogers was on Bloomberg yesterday to discuss currencies primarily, and in particular the Chinese Yuan. The entire interview is well worth a listen, as he comments on currencies, China, gold, silver, rare earth elements and inflation. But, for us the biggest take-away is what he has to say about the end result of a currency war.
http://www.youtube.com/watch?v=yHZ3oCNkfLw
“A trade war could be the end of all of us. In the 1930′s we had a trade war, it had led to the Great Depression, and ultimately to the second world war. No one has ever, ever won a trade war, everyone loses a trade war. If the trade war gets worse, that’s the end of the game. The world economy is going to be in trouble for a long time to come. Unfortunately, most politicians have not read their history or their economics and don’t know the consequences of a trade war.”
Jim Rogers always tells it like it is.
He’s right about the politicians not following history. You can bet that these idiots will lead us to disaster, whether it’s through currency wars or something else.
Gold took a forty dollar hit today, but pretty much everything took a hit today. The surprise rate hike by China in their deposit rate, from 2 1/4% to 2 1/2%. This caused a chain reaction of events in the currency, commodity and equity markets.
If you own gold, or want to own gold, in preparation for the coming financial collapse, you need to listen to Peter Schiff as he reviews the market action today, and pays particular attention to gold.
Yesterday the US dollar fell sharply against world currencies yesterday after the Federal Reserve suggested it’s ready to further stimulate the US economy: maintain artificially low interest rates and further quantitative easing.
This lit a match (again) under gold prices, as investors lifted the price of gold towards the $1300 mark. This is not just panic buying by retail investors, but buying by governments, funds and other institutions. Gold expert Max Keiser noted on the Alex Jones Show yesterday:
“Central banks for the first time in decades are buying gold,” Keiser explained. “Up until recently they were net sellers of gold, now they are actually buying gold. So, this is another huge piece of the equation for gold.”
Watch this video of Alex Jones interviewing Keiser on his show, and you’ll understand why you need to begin, or add to, your gold holdings.
R. Arthur Beckles: Barack Obama is President of all Americans, not just of African-Americans! It’s difficult for all working class Americans – black, white, brown, etc. African-Americans who don’t want to vote for Obama, can feel free to do so. But do they think that their lot...
keith: wow. Whos got the bigger stick, My @!(k is bigger than yours, your country my country, my countries poor is richer than yours. the truth of it is that in the end the civilians are going to feel the brunt of this economic downfall. i live in the U.S. and there are over 200 multi...
Anonymous: I agree with many of the above. I know people from both the US and Europe that are on disability because of health problems and the one person in Europe is receiving much more help than are the US citizens.
Sunday: BTW, before you ask why two adults only received $240 a week for unemployment, just remember that you can only receive unemployment if you were laid off. If you were fired or quit, you cannot receive unemployment. In my case, I got ill, and FMLA only applies to people who have worked at a...
EriktheRed: I like how it’s “fortunate that the crisis is confined to the E.U.”- what’s unemployment in the U.S. right now? How about the millions of foreclosures you’ve had already? Tent cities, anyone? Deficit spending at $3.5 bn a DAY? HMM!
David, Self Defense Retailer: Really? Why in the world are they doing that for Gitmo detainees? A whole soccer field? Outrageous! Maybe the EU really won’t last.
David, Stun Gun Supplier: It’s the next bubble. I wonder what Romney has to say about this. Obama’s made himself clear in his typical way. It’ll probably be worse than housing when it does.
See I told you: Who didn’t see this coming . Put a communist organizer in the White house and just wait. To bad the American populace lacks true intellect or is it just that the dummies out number the smart 20 to 1. Probably the latter. Obvious who controlls the vote with those kind of...
James: After a seriously obese person has had fat removal procedures, his/her flesh sags where excess fat used to be. World population should never have risen this high. It will be reduced. Through lower birth rates; or by more traditional means: war, disease, famine, cannabalism. I’m not a...
JoAnn: I have a real problem with Obama borrowing money to send to Greece when so many people in this country who have lost long term jobs,lost homes,living on the street, little or no food. I vote to take Obama and his family if they want to go and DROP them on a desert island some where just so...
Arkansas Slim: Update. Oil hit 105 per barrel yesterday, 2 20 12. Gas US Avg => 3.50 per gallon. Cloward Piven Theory of Economics: Tipping point of US Electorate => 51%. Nevada odds for Obama RE Election 6/10 on thier sport boards. EU/Greece set to collapse, dominos arranged. Socialistic...
kkl: America is now turning mediocre no more fun no more trips or vacations 100 bucks to fill gas tank and pasta and ramen noodles for life for usa there is no more hope no more fun just work go home work go home fill up gas tank eat shit and work no more fun thanks for nothing nobama i hope you...
Chris Marshall: Hi Janice, I just wanted to know, how would you be able to get a good investment out of the Whole Life Insurance if it costs really high? The projections usually given out by “Financial Advisors” that 12% is the usual earnings specially if it is invested in TSX or NYX...
Agent: Walt Disney funded Disney World by using the cash value in his whole life policy. You can’t say that was a mistake. Buy term for a specific need/period and buy whole for a permanent need or if you need your life insurance past age 65.
Forex Agent: As a financial advisor what I tell clients is that the main purpose of a life insurance policy is to provide a death benefit. Whether term, some sort of permanent life insurance, or a combination of the two is most appropriate depends on a number of factors including the...
Cindy: Before long they will, if not already, invade and keep track of everything you do including the privacy of your own home exploiting you and demanding that you worship them. You will be powerless to control it so you will have two choices…… ;kiss butt or commit suicide.
Space Cadet: don’t be rediculous. Glass Steagall is a red hearing. This problem is much farther reaching, from before the Nixon Administration. He took the US off the gold standard which was the pillar of the US dollar, and the reason it is the world currancy. He did that because the US...
Hervy: Very good advice, same as I give when talking to people. Clark Howard and Dave Ramsey are both good sources of information that is inline with what is written here at EC. Another good website that i tell people to go to in order to get an easy calculation of how much insurance to buy is...
BenP: This is part of the cannon fodder that will be used against Obama in 2012 and his administration. It’s not that he is horrible (he is) or worse than any other President (about the same), its that examples like these can be used to show the devil you know has got to be worse than the...
Lauren: Personally I think you sound like an idiot. The NIH spent 55,000 to promote a vacine that does not exist and, one of which, they would not fund to discover in the first place(yes, it’s ture look it up). If someone lives in an area with a lot of storms they already understand the...
Matt USA: I know I’m a little late to this discussion, but I think that the economic collapse scenario has changed somewhat in recent weeks. It appears that Europe will go first, followed by the United States who has gambled and lost on a TARP style European bailout. The real question for...
Kim: Marcy, Rep. Alan Grayson said in the attached youtube video in 2010 that Fannie Mae and Freddie Mac both own stock in MERS. How much stock and when did they own it? Would this explain their current actions? Did they move loans out of MERS and into Fannie Mae for the tax payers to bail out?...
China: @Serban Enache , You Are Wrong We are In Lot Of Trouble and you Know This , Starting In 2012 We will have Many Many Different Problems , We The Government Is Paying For All This Building , We Know Our Own Citizens Can’t Afford This Type Of Live Style , but we are building it Any way...
City On a Shining Hill: “The problem with socialism, i.e., the failed economic system being adopted by so many nations in the world today, is that in funding entitlement programs voters want in their politicians and having governments fund retirement, health care, education, etc, is that...
Rider I: How the US has historically used mineral rushes to get it out of Deficits and stop foreign economic take over. In the US’s historical past the Druids have used and impressed upon the US leadership to use mineral resources to stop economic warfare, along with military take over....
Financial Collapse: Everyone needs to get this correct… (REPOST ON TWITTER, FACEBOOK) America is controlled by the 3 privately owned states (district of columbia, the city of london, and the vatican.) Each has it’s own flag, pays no taxes and has it’s own laws. All 3 are part of...
Tm Newman: I graduated with my B.A. in psych/soc a year ago. Interned teaching math and English to fourth and seventh graders. The school shut down due to lack of funding. All the kids got shipped off to public school. I can’t find a position in my field, and there are no teaching jobs in...
hefsmaster: Been a slow couple weeks since the downgrade. News wise that is. But it gave me more time to coin a phrase. You’re a true libertarian when you piss everybody off. Which explains why everybody thinks were nuts and relegated to being a third wheel in politics. Well call me and...
PeacefulPatriot: The worst is yet to come in the realm of austere measures to keep up appearances on the global markets. The truth though is quite obvious to the sane members of society, we have reached a break point and it is the Systemic collapse of the post-industrial globalization bubble. All...
Serban Enache: Pearl Harbos was orchestrated as an operation years before WW2, by the British empire in conjunction with Imperial Japan. The japanese elite didn’t surrender even when they did not have any hope of wining, let alone after Hiroshima, though I don’t agree with the two...
hefsmaster: No, despite these guys obvious failings. He is exactly right. You think japan would have attacked us without any allies. Pearl harbor is an effect from a cause. Without hitler, point is mute. By the way lee, you haven’t copied anything in a while. You a congressman?
Serban Enache: This Larry Summers has some nerve. Is he trying to say that Hitler attacked Pearl Harbor?
Gordon Shumway: Two questions: 1. Why is it a felony for an individual to print money, but evidence of a keen insight into the arcane world of macroeconomics when a bankster does the same thing, only on a vastly greater scale? 2. Since those who are running the Fed and Treasury are supposed to be...
tim: i for one will not pay a single dr bill my sickness is caused by our government let’s take it back already raped and brusied lady liberty is not what she stood for so many years lets scrap the statue that means so little any more freedom is prison in america try being disabled for 20...
tim: well about time someone in power noticed what wool us seniors have to face daily after food shopping go to my drug store same tricks and and cost is up 25 percent then dr co-pays up another 20 % what will we do when money social security doesnt go far enough to keep us healthy
Space Cadet: Does it matter how we got here? The people in charge ‘think’ they are so smart that they will finesse our way out, while staying in power and making a ton of money for their pals. We will be left to pick up the tab and clean up the mess, as usual. My neighbors just got...
Yesterday, John Hathaway, a managing director of Tocqueville Asset Management LP in New York, wrote a commentary on the coming dollar slaughter and the coming value of gold.