March 28, 2013

More Than Bearish, Downright Grumpy

Grumpy? Maybe even homicidal.

Marc Faber gives his read on the stock market and what may happen to gold investments.
When you print money, the money does not flow evenly into the economic system. It stays essentially in the financial service industry and among people that have access to these funds, mostly well-to-do people. It does not go to the worker. I just mentioned that it doesn't flow evenly into the system.

Now from time to time it will lift the NASDAQ like between 1997 and March 2000. Then it lifted home prices in the U.S. until 2007. Then it lifted the commodity prices in 2008 until July 2008 when the global economy was already in recession. More recently it has lifted selected emerging economies, stock markets in Indonesia, Philippines, Thailand, up four times from 2009 lows and now the U.S.

So we are creating bubbles and bubbles and bubbles. This bubble will come to an end. My concern is that we are going to have a systemic crisis where it is going to be very difficult to hide. Even in gold, it will be difficult to hide.

What say you? What can the small investor do?


IanH said...

Oh my gosh, I thought I was looking in the mirror!! :-}}

sig94 said...

IanH - ya gotta stand closer to the razor when you shave. :)

Doom said...

Friends, family, skills, and real assets. Find out what real assets are. At my income level, that is food, the tools to grow and process it, guns, and ammunition. If I had more, I would go into silver, then a bit of gold. Just understand, silver and gold will not make you rich, they will simply be something real, that people agree are of some value-real wealth if there really is going to be a crash. (Something I believe as a certainty, but I'm... Doom, after all.) Beyond that?

Now, assuming nothing bad does ever happen? Stocks. Stocks, watched a bit, are still losing less than most other investments. And, yes, they are actually losing wealth (if not money). I mean, the stocks are worth 5-12% more money per year, but the real value of that money is decreasing faster with real inflation being much higher than government numbers are suggesting. (And I am putting up a very conservative estimate of real inflation... which I think is probably ignoring quantitative easing.)

sig94 said...

Doom - excellent point. If the destructive fools in DC get to the point of initiating hyper-inflation then all bets are off. That is the real killer.