Feb 8, 2013 / 5:00 am
This is my first column of the New Year and I wish I could start with some happy news. Just check out the Internet or other sources of information, there are plenty of good news stories out there. People are doing amazing things for mankind and the planet we inhabit. However, because this is an article about the global economy, I regret to inform you that this will not be a “feel good” story.
I have recently attended seminars and read articles (particularly by local sources) stating that it is time to get heavily invested in the local and US housing market as prices have bottomed. I think this is sound advice if you are looking for a career as a magician. “Now you see your money…..tada……Now you don’t.” Those people who advocate buying here are unaware as to how much further the housing market in Canada and the US can and will fall. I am taken aback as to how these realtors advise that the global and US economy is on the mend and everything is better now. I guess we shouldn’t blame them for they know not what they do. They are simply drinking the Kool-Aid that is spewed from the talking heads in government and main stream media. These sources are constantly telling us how everything is okay and the economy is on the mend. This must be true. Why else would there be over 50 million people in the US on food stamps? Why else would the US government not only have raised the debt ceiling but for all intents and purposes basically eliminated the debt ceiling? This will undoubtedly bring about hyperinflation in the US. And why else would Germany, who has parked her gold in the US since the end of World War 2, now be demanding its gold back? The answer is obvious; it’s because the economy is just fine.
Don’t get me wrong, I love real estate. But investing is all about cycles. Real Estate hit the end of its cycle back in 2007. It is now the time of commodities and precious metals. I should point out that unlike the realtors who tell you to get into real estate so that they can make a commission on the sale; I have nothing to sell you. I don’t sell commodities or physical gold and silver. I’m just trying to prevent people from making a catastrophic mistake with their money. So why do I care about other people’s stability and wealth? Because, when nations are impoverished and people have lost everything that they have, this is when tyrannical leaders come into power. One could easily argue that is what we presently have in the US. I would agree. If we look back over history, it was times of desperation when leaders such as Stalin, Mao, Mussolini, Hitler and others came to power.
We live in very serious times. The landscape for political and financial disaster is extremely fertile. When it comes to political and financial concerns; Question everything…Believe no one…..and think for yourself.
I provide the graph for those who believe the US economy is on the mend. In the last quarter of 2012 the US economy added an additional $312 billion in debt, while the economy shrank by almost $5 billion. Do you still think the recession is over? The truth is, the storm has yet to hit the shore. But make no mistake, it’s coming a’ shore.
Read more Economics Made Easy articles
- You're poorer than you think Feb 22
- Impending housing crash Feb 8
- Debt slave Part 2: Mortgages Dec 14
- Debt slave: Part 1 Nov 2
- Got gold? Oct 5
- End game for Europe Sep 21
- This will end badly Aug 23
- Things that make you go...hmmm? Jul 12
- Currency wars Jun 14
- Let them eat cake May 31
- No global economic recovery May 17
- Austerity comes to Canada Apr 5
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