"But there never seems to be enough time to do all the things you want to do once you find them."
"Time in a Bottle", Jim Croce. I know the feeling!
A close friend suggested I read a book that really depressed him (gee thanks!). The book is called "The Crash of 2016" by Thom Hartmann. Even though I just started reading it, I can see why he is depressed. The book is depressing! But even though there will be a stock market crash in our near future, we can either become depressed like all the other lemmings, deny what is happening:
or we can understand what is happening:
First, if the news is bothersome to you, don't watch it! If the presidential race scares you to death, don't follow it! Who is in the White House or who killed who on the news should have little impact on your life! You have enough to deal with depending on your age, marital status, amount of debt, and your job status. Work on the things you have control over and set goals that will make you a better person.
Enough comments from the "peanut gallery"
I'd like to review some of the things I think are important from previous blogs.
Since year 2000 we have been in a bear market that has all the earmarks of a very long drawn out depression. Although our gold chip stocks have been making new highs, most stocks are losing money. The stock market is in what I call a "Bear Market Bounce" that, when using real money (gold), hasn't made new highs since 1999.
All other world stock market indexes are down from their highs from previous years in real money or fiat money!
So we are in a worldwide phenomenon that is cyclic in nature where the mood of society goes up and down. As we are part of the natural world, we see other examples such as Spring, Summer, Fall, and Winter. We are of course, I believe, heading into the period of winter.
So what can we do to prepare ourselves for this winter? The squirrels bury nuts for food and build nests to keep warm. The birds fly south. The turtles bury themselves to prevent from freezing. Well enough of nature's analogy!
There are a number of things we can do to prepare. The biggest thing one can do is to protect what savings you have! Remember, we are talking about DEflation, meaning basically that the price of everything will go down. So as the stock market will plummet, you can't keep it there!
Here's a shot of what has happened in previous bear markets:
This is the "short list" that doesn't include 1929. That bear market lasted 10 years and stock prices went down 80 percent! To me the stock market is a gamble. Period.
Bonds, both government and corporate, will decrease in value. The amount of world debt is unsustainable and people will wake up and start selling once the "herd turns" Real estate values will plummet again. Commodities like gold and silver will decrease in value. It has been said that it is a good idea to buy gold during times of uncertainty. Remember, during the Great Depression the price of gold was fixed. So we can't compare it to now. But during times of DEflation, prices of gold and silver go down.
So if the prices of everything are going down, what is going up? The dollar! Cash will be king! And this will be true on a global level also. Since 2008 the dollar has been soaring compared to other currencies:
This leaves me to my point I will continue to drive home. The only safe place to keep your money is in a safe bank. I mentioned in a previous blog that Weiss Ratings rates banks. I borrowed a chart from their web page (Weiss Ratings) and here are the safest banks in the world and the United States.
There are many others but anyone can open an account in any of these banks.
Secondly, as the debt bubble implodes, interest rates will skyrocket. This amount of dept is unsustainable. This is what helped cause the Great Depression.
If you don't have a fixed mortgage rate in a reputable bank, get one! Try to diminish any other debt.
So at the end, he or she who has the most cash and the least amount of debt wins!
Stay safe and we'll work on more useful information next time. There will be no test!
Best regards,
Ken Knight
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