Thursday, December 27, 2007

What Lies Ahead


Now that the speculative housing/lending bubble is undeniably deflating and the U.S. economy is sliding into recession--just as this site has been predicting for 2 years-- the bloom is off the doom and gloom.


(Sorry, I couldn't resist that bit of doggerel.) Truth be told, now that the decline in housing is being covered by every publication known to humanity, it's become rather boring. I mean, how many ways can you say, "housing is going down for a long time"?

Ditto with "the U.S. is heading into recession." The flaccid attempts at a "debate" engineered by the financial press are laughably absurd, as the same tired old hands who failed to foresee the 2000-2002 recession are again trundled out to make yet more failed forecasts of permanent rosiness.

As a result, there is less and less to say of any value about housing and the financial meltdown in the U.S. It was fun to cover those topics when they were being ignored and glossed over by the mainstream and financial press, but now that doom and gloom is mainstream, my focus in 2008 will shift to what is less obvious: the feedback of forces attempting to ameliorate and counter the destruction of risk and wealth we all see at work.

In my view, the Empire Will Strike Back to protect its assets, reach and power, and to expect the U.S. economy to roll over and expire in a nice predictable swan-dive of doom is foolhardy, given the scope of that Empire:



This great, long unraveling--and the powerful counter-trend rallies as the Empire responds--certainly will impact our own financial situations. Everyone wants to know where to put their nestegg to preserve capital/buying power and perhaps even increase the nestegg, and the worldview I will explore is this: there are no "long-term" straightforward investment answers anymore. Risk has retaken the field, and every investment strategy that seems to be well-grounded and working well will stop working.

The era in which you could follow some simple plan year in and year out such as "buy on the dips" or "buy precious metals" may well be over. That is the thesis I will explore.

Just to reiterate what has been established here in dozens and dozens of entries and charts: the housing decline has barely started; the bottom is at least 4-5 years away. Anyone buying in previously "hot" markets in the next year or three will see their investment lose value, perhaps by a stupendous percentage.

The U.S. will enter a long, confusing recession which will fail to respond to the usual elixirs of lower interest rates and more government deficit spending. Structural imbalances in the global economy will drag the rest of the world, including China and India, into recession behind the U.S. Oil will plummet in price as demand drops, for this recession will deepen with time. It will not be "shallow" or brief, despite all the official predictions that it will be a mere pinprick.

Most importantly, I will continue to strive for that most difficult goal: to surprise you. Once you can predict what I will cover tomorrow, I will have lost my edge. What keeps me sharp, of course, is you: your ideas, your suggestions, your critiques. That's what keeps the site lively and unpredictable: the amazing range of reader intelligence and experience.


Thank you, Pedro V. ($10), for your generous contribution to this humble site. I am greatly honored by your gift and your readership. All contributors are listed below in acknowledgement of my gratitude.

Terms of Service

All content on this blog is provided by Trewe LLC for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site. The owner will not be liable for any errors or omissions in this information nor for the availability of this information. The owner will not be liable for any losses, injuries, or damages from the display or use of this information. These terms and conditions of use are subject to change at anytime and without notice.


Our Privacy Policy:


Correspondents' email is strictly confidential. This site does not collect digital data from visitors or distribute cookies. Advertisements served by a third-party advertising network (Investing Channel) may use cookies or collect information from visitors for the purpose of Interest-Based Advertising; if you wish to opt out of Interest-Based Advertising, please go to Opt out of interest-based advertising (The Network Advertising Initiative). If you have other privacy concerns relating to advertisements, please contact advertisers directly. Websites and blog links on the site's blog roll are posted at my discretion.


PRIVACY NOTICE FOR EEA INDIVIDUALS


This section covers disclosures on the General Data Protection Regulation (GDPR) for users residing within EEA only. GDPR replaces the existing Directive 95/46/ec, and aims at harmonizing data protection laws in the EU that are fit for purpose in the digital age. The primary objective of the GDPR is to give citizens back control of their personal data. Please follow the link below to access InvestingChannel’s General Data Protection Notice. https://stg.media.investingchannel.com/gdpr-notice/


Notice of Compliance with The California Consumer Protection Act
This site does not collect digital data from visitors or distribute cookies. Advertisements served by a third-party advertising network (Investing Channel) may use cookies or collect information from visitors for the purpose of Interest-Based Advertising. If you do not want any personal information that may be collected by third-party advertising to be sold, please follow the instructions on this page: Limit the Use of My Sensitive Personal Information.


Regarding Cookies:


This site does not collect digital data from visitors or distribute cookies. Advertisements served by third-party advertising networks such as Investing Channel may use cookies or collect information from visitors for the purpose of Interest-Based Advertising; if you wish to opt out of Interest-Based Advertising, please go to Opt out of interest-based advertising (The Network Advertising Initiative) If you have other privacy concerns relating to advertisements, please contact advertisers directly.


Our Commission Policy:

As an Amazon Associate I earn from qualifying purchases. I also earn a commission on purchases of precious metals via BullionVault. I receive no fees or compensation for any other non-advertising links or content posted on my site.

  © Blogger templates Newspaper III by Ourblogtemplates.com 2008

Back to TOP