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Posts Tagged ‘investing’

United States dollar

On December 14, 2010, Porter Stansberry of Stansberry Research Associates released a video called “The End of America.”

In it, he made the claim (at 6:18):

Let me back up and show you in the simplest terms possible what is going on, why I am so concerned… and what I believe will happen in the next 12 months.

He then went on to talk about the end of the U.S. dollar as the world’s reserve currency (13:40).

“The U.S. dollar has been the world’s reserve currency for decades now. So most Americans don’t have a clue about what the repercussions are of losing this status.

Commenting on the likelihood of Stansberry’s prediction much earlier than October 2011 wouldn’t have been that useful, as we learned in 2008, when the U.S. stock market was relatively high prior to September, before things began to massively collapse.

And, obviously a prediction much later than now wouldn’t be of much value either. Therefore, on October 23, 2011, I predict that Stansberry’s prediction is likely not to come true.

Eventually, the U.S. dollar will lose its status as the world reserve currency, since nothing lasts forever, and especially not a currency whose status is imposed through artificial forces, and not market forces.

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The U.S. real estate collapse continues

Financial analyst Al Martin gave a stark and timely presentation of the continuing economic collapse on his August 28, 2010 monthly appearance on Erskine Overnight.

First segment

  • Existing home sales have fallen to levels not seen since the Korean war.
  • Unsold inventories of existing homes, 12 1/2 months, is the highest on record, not even reached during the depths of the Great Depression in 1933.
  • 44 of the last 48 months have been negative for mutual funds.
  • $500 billion annual drawdown of common stock mutual funds.
  • He said gold is the ultimate hedge. (In contrast, in November 2009, he effectively told gold shills to take a chill pill).
  • He said gold has always risen in a deflationary environment.

Second segment

  • In 2005, 26% of U.S. debt was financed internally — now 33%.
  • $500,000 house in Stockton, California in 2005, has defaulted three times since then. It dropped to $400,000 in Q1 2007, $300,000 in Q2 2008, $200,000 in Q3 2009, now being sold by the bank for $185,000.
  • He said historically, a bottom in the U.S. real estate market comes as the percentage of cash buyers increases. Now, 33% of all housing units sold are paid in full with cash. When it reaches 50%, he says the market will have reached a bottom.
  • 25 to 30 year-old first time homebuyers have fallen 70% since 2005.

Third segment

  • Defense Secretary Robert Gates announced 150,000 U.S. troops to be redeployed to the U.S. by 2014.
  • He said there is record global inventory for oil and copper: a 2 million ton net surplus for copper at the end of the year, and copper is at least a dollar per pound overvalued, and oil is overvalued by at least $20 a barrel.
  • They figured the world economy would perpetually grow by at least 2.2% per year, but 1% is now the new target.

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