Oct 23 2008
Finally! They agree with me!
My father is a faithful follower of Martin Weiss and his associates. For many years their advice has been his faithful quest. Sometimes I disagreed with their analysis, sometimes we shared the same view.
Several months ago, and even more so, several weeks ago, we once again parted ways on what we believed would happen to global stocks. They said that no matter what would happen here, the growth in China and India was such that our fiscal problems would have no bearing over there.
“There’s no way that the biggest customer of their businesses could have a cold without giving them the flu,” I told Father. “If we suffer from terrible times economically, then you can bet they will have it worse.”
We discussed it emphatically. He didn’t know if he believed them or not.
Then recently the news reports of abandoned factories in China began to hit mainstream media. People in China began to flock to rallies designed to protest plant closures. Still Edelson and Sagami of the Weiss group pounded the table crying that the growth was there.
Today they changed their tune. Now they believe we will be plagued with deflation, and that third world nations will have a massive financial wipeout due to lack of orders from the U.S.
I hate it when I’m on a different wave length than Weiss. He’s careful with money and has years on him that I do not. But this situation was different because it seemed so apparent to me.
Now comes the hard part for you to hear. As wonderful as these low gas prices may be, they will not continue. This is simply a correction. It will not be like this for long because anyone owning any amount of oil at alll will do their best to get their profits back up.
Another thing, don’t expect long term deflation. Why? Because worker’s wages have not really caught up with the increase in the cost of living. Those cost of living increases will come. The deflation which Weiss is predicting is already true. Last year, the insulation I bought for my walls cost more money than it did this year. And retailers are already looking at sales as a way to get rid of merchandise that people aren’t going to buy easily for the holidays.
Weiss says the deflationary period will not last long. I agree. In fact, the free fall in the price of gold will be so fast, and the turn around for the price will be equally so fast that it will give you whiplash. Watch it.
Prepare for the upcoming changes in our economy. There are ways. I will explain more on this tomorrow.
