Saturday, November 10, 2012

When You Reach The "Moment" & The Importance Of Patience

I read two articles this week that really stood out to me. The first was from an author who was talking about when he had his "moment." The moment when things clicked and he realized that things were not okay, or things were different than what he had been brought up to believe, was taught in school, etc.

For him it came when he was working as an intelligence officer over in Iraq in the early 2000's. He remembered understanding clearly that based on the available US intelligence that there was almost no possible way that Iraq had weapons of mass destruction. At the same time, he remembers President Bush giving speech after speech where he assured the American public that there were definitely weapons and they would be found at any cost.

This led him to begin doing some research on the government which led to how our money supply works. That of course opened another set of doors he did not even know existed. I know that many of the readers that come to visit this site have experienced this "moment." For some it may have occurred recently and for others it happened a long time ago. For some, I hope, it was triggered in some part due to the information presented here.

My moment occurred about a year after I left college and picked up a book called Rich Dad Poor Dad. The things I read in the book were unlike anything I had ever come across. It rocked my entire paradigm of the financial world.

The book led me to read every other book in the series soon after, which led me to purchase the company's paid video subscription they had on their site at the time for $10 per month. The first video I pulled up was a three part guest appearance from a man named Michael Maloney (summer of 2005).

He presented a slide show that went through the basics of monetary history, how the world was removed from a gold standard in 1971, how the money supply had exploded, how the US government was bankrupt, and the supply/demand dynamics for something called silver.

I was floored.

It was my "moment." I spent the next weeks reading relentlessly. I picked up Richard Duncan's "The Dollar Crisis," which was one of the few books released at the time about the coming problems for the global economy. I remember going to the bookstore and seeing the five full floor to ceiling sections of real estate investing books. I found one book out of the hundreds that discussed a potential problem the author saw coming in real estate. I was rocked again by what the author was describing.

My "moment" has subconsciously set me on a path in my life that has brought both good and bad. The good was that it kept me away from purchasing a home when everyone around me was buying (and some younger people I know were already purchasing second "investment" properties). It also brought good in that I purchased my first ounce of silver for $7 in 2005 and I have not stopped buying since. It is hovering around $32 an ounce today.

The bad is the time it has taken for the ultimate endgame to unfold. The number one question I get from readers on this site is "when?" I have described in detail the coming disaster in Japan, but that is irrelevant for most if they do not have the "when." I have had to live with knowing and worrying about what is coming for a long time while I wait for it to arrive. When someone first collects enough information to achieve their "moment" it seems as if they are going to wake up the next morning and the world is going to end. Of course, that does not happen.

The second article I was discussing at the beginning comes from John Rubino, and I'd like to share a piece of it with you below. Why should his voice be heard? He was the author of the book I was just describing at the book store back in 2005. Rubino not only saw it coming but had the balls to write an entire book on how to profit from the real estate collapse (released in 2003). His words below help speak to those who had their "moment" long ago and are waiting and waiting for the world to re-align itself based on fundamentals. The emphasis added is mine:

So Why Bother Watching?

This story is at least a decade old, and it’s getting tiresome for all involved. For the majority who expect positive change from each election the disappointment must be exhausting, as each inevitable compromise moves their latest hero one step closer to impotence. For the small number of people who see the underlying truth, this show is even harder to watch because the obvious, inevitable ending just won’t come. The zombie that should have died for good after the 2000 tech stock crash keeps shambling along, wreaking havoc or boredom, depending on whether you’re in its path or watching from a safe distance.

The solution? Accept that time spent obsessing over a process with a predictable result but unpredictable schedule is time wasted. So just stop watching. Make the right – and by now obvious – financial and lifestyle choices and then tune out. Turn off the TV and stop reading the business and political sections of the paper. Use the resulting time to develop yourself and cultivate your community. You know what’s going to happen, more or less: A decade hence your gold will be worth a lot more and everything else quite a bit less. And you know your friends will suffer and need your help. So prepare for the things that you can predict.

Once the markets stop providing unlimited leverage and the system crashes for good, then tune back in and add your voice and your capital to the debate over what to build in its place.

Full Excellent Article Here: Now We Can Stop Paying Attention

While I enjoy seeing some of the people and friends I know that have had their "moment" due to some of the information here, I find myself some days jealous of those that have no idea about what kind of disaster is coming. Ignorance in many ways is truly bliss.

Thursday, November 8, 2012

Marc Faber On Obama's Re-Election: "The Stock Market Should Be Down 50%"

Marc Faber speaks with Bloomberg following the re-election of President Obama with his thoughts on what it means for the economy and the stock market.

After the re-election was confirmed the following day the stock market fell 2%, the largest one day drop this year. Faber told Bloomberg he felt the market should have fallen 50% with the news that Obama was back.

Betting On Water: A Scarce Resource Still Off The Radar

I believe we are in a secular bull market for commodities and natural resources. One of those scarce resources, although it gets little attention in the news today, is water. The best time to begin accumulating a position in companies that will help solve a problem associated with a scarce resource is before the problem hits the mainstream news (see rare earth metals back in early 2010). The strongest water companies will provide excellent long term gains for those with patience, specifically in areas such as China where they will be needed the most.

Wednesday, November 7, 2012

Four More Years: The Stage Is Set For A Gold & Silver Explosion

I fell asleep early last night, and I woke up early to the news that Obama had been re-elected for four more years as the President of the United States.

I believe that the country entered a depression in December of 2007 that it has not yet emerged from. A depression occurs historically about every 75 years, the last one occurring in America in the 1930's.

Before I go on I will say the fact that Obama could be re-elected during a depression under any circumstances is truly incredible. He is one of the greatest "politicians" this country has ever seen.

Our current depression is far different than the last and Obama has been a direct beneficiary of the differences between the two. Americans live in a country where it has become the goal to make things better immediately at almost any cost to the long term. When it comes to health, people would much rather take pills than diet and exercise. When it comes to personal finances, the country has become a nation of buying everything first on credit (car, home, furniture, clothes, etc.) and then spending your remaining years figuring out the best way to pay for it.

Politics and the economic decisions made for the country now also follow the exact same philosophy. All political discussions center around what the government can "do" right now, today, to "fix" the economy. Politicians will pump any sort of stimulus or provide any amount of government transfer payments to appease the populace and just push through to the next election. After we get through the current rough patch they will make the hard decisions. Of course, "after that" never comes.

Americans now live in a country where we entered a depression and those that lost their jobs and were unable to find work in many ways entered a better life than they had previously. This is a stark difference from the previous depression in the 1930's where those that lost work entered bread lines and many people saw their bank accounts closed and money lost that they saved.

Those losing their job today found they received 99 weeks of unemployment benefits for staying at home. Millions of Americans found out about food stamp and disability programs. Many that stopped paying on their homes found out that the banks never came to foreclose. They now collected unemployment checks without the burden of making mortgage payments. They had the ability to spend time with their family that did not exist previously. 

As Americans have been living this new lifestyle, they turn on the news and watch the stock market rise relentlessly day after day. It has now more than doubled off the lows of March 2009 and it continues to rise. This has subconsciously confirmed that everything was getting better, even if people knew deep down that it was not.

The topic of Fannie Mae and Freddie Mac, the newly acquired government agencies that along with the FHA insure or purchase over 90% of new home loans in America, were never discussed once during the presidential debate. These monsters control well over $5 trillion in mortgages and they were never even mentioned.

I saw an older commercial leading up to the election which shows the Chinese in the future discussing how they had taken control of America due to their accumulation of our debt. People still refer to the Chinese today as the main buyer of US treasuries. Unfortunately, China stopped buying US treasuries years ago and their holdings have tracked sideways and even fallen recently. It is the Federal Reserve that has become the main buyer, something that was never discussed once during the debates.

Based on this new type of depression we live in today, I understand why people would vote for Obama. For many things don't really seem that bad. As much of the trouble as possible has been masked and pushed back with deficit spending and a printing press.

With Obama's re-election confirmed the stage is now set for the absolute worst possible outcome for the United States in the long term. Soon the stock market will find out what happens when the cost to produce products begins to rise and the ability to cut costs further begins to fall. The bond market will find out what happens when either inflation begins to rise or the world wakes up from its coma and realizes that the United States has no possible way to pay back any of the money that it has borrowed. I believe one of those two scenarios will occur over the next four years.

I long for the day when I can re-invest my personal investments back into the country in the form of stocks, bonds, or real estate, but unfortunately that day is now a long way away.

The Obama re-election creates the perfect storm for the precious metals markets. Not only does it put safety into the job security of Ben Bernanke, it confirms that as the real economy continues to weaken there will be no hesitation in adding another massive stimulus program.

I assure you that there will be a day of reckoning for a country that runs trillions in annual deficits that are paid for with printed money. This day of reckoning could come this week, or it could be years away, but it is coming.

Please enjoy every temporary fall in precious metals as a tremendous opportunity to continue to accumulate physical positions. Please enjoy, just as the Chinese are today, every day where over priced dollars provide you the opportunity to purchase under priced metals. There will come a day when gravity sets in and this imbalance no longer exists.

Tuesday, November 6, 2012

Election Day In America

The world will be a different place tomorrow morning so I don't need to provide you a large outlook on the future today without the election results secured.

Tomorrow we will know if we will have more the same or much more of the same. Both scenarios in the short term are good for the country and many of the people that enjoy the benefits of tremendous government spending and artificially low interest rates. Both scenarios are very bad for the country and the long term health of the global economy in the long term.

Here's a little humor for those out there that just can't wait for it to be over.