"How much pain have cost us, the evils that have never happened." – Thomas Jefferson
Worrying about the many economic threats in the news today really is a waste of time. So many people come up to me depressed, concerned and frozen into a total inaction and paralysis about domestic politics, foreign affairs, the dollar and the debt, saying, "What are we going to do?"
My answer is to quit worrying, make sound preparations and then get on with your life. Every generation and nation has had their trials and tribulations, successes and failures and although today looks eerily like the 1930s, this too will pass.
Although I've been retired from individual consulting for some time (still work with corporate clients) I receive a large number of inquiries from readers and former clients as well as current conferences attendees and they all ask, essentially, "What is going to happen? Will the dollar and US sovereign debt crash, what about the European Union and their problems, gold, oil and the scary situation in the Middle East?"
They never ask whether Congress or the US political system will get their act together. They know the answer and except for the Ron Paul campaign, everyone has basically given up on government solutions to the threats facing us today. The real underlying question from everyone is simply, "Is everything going to be all right?"
A simple answer is despite positive assurances from Wall Street, Washington and the EU, or the negative forecasts from doomsday prophets, no one really knows. While all the experts have opinions, as this is what experts are paid to do, the western world is dealing with such a complex series of problems now all at once that we really are in uncharted territory.
First of all, I really don't know what will likely happen over the next 12 months and neither does anyone else. Most investors and advisors have made good money betting against the dollar buying gold, mining stocks, oil futures and investing outside the dollar over the last few years. Although I really like gold stored outside the US in programs like Global Gold, I urge investors to be careful in the short term adding dramatically to these positions right now. The serious EU sovereign debt crisis could in the near term strengthen the dollar because US bonds are still perceived by many as a safe haven reserve if the euro really tumbles.
As a contrarian, I believe if the PIIGS return to their national currencies this could actually benefit both them and those northern European nations remaining in the euro. While a win/win situation for individual nations, this would be catastrophic for the banking elites and they seldom lose. This is why I believe the banks and EU politicians will do their best to keep every nation in the EU. This would create the worst possible outcome for the sovereign debt crisis.
But just because some advisor was right about the fall in the dollar or rise in gold or oil doesn't mean they will be right the next time. In fact, back when I was in the investment business I often discovered that the worst decisions were to pick investment groups, advisors or funds that had done the best the previous year. Sometimes the best choice was to pick the worst performers.
My advice is to legally diversify much of your wealth outside your home country, currency and the political leeches running everything and then live your life. It is apparent in Greece, Italy, Germany and America, as well as throughout the West, that individual citizens have lost control of their governments and establishment politicians.
If you want to know what will happen in the US, just watch the mega-bank bailouts in Europe and the forced austerity measures on the already bankrupt PIIGS and their citizens. This is our future. Forget what the politicians promise, the financial experts say or the establishment news propagandizes, as the tide of wealth confiscation will also sweep the United States. The Federal Reserve and central bank cartels have created too much fiat money and the politicians have borrowed too much sovereign debt to buy votes and they will steal your wealth to prop up the governments, banking elites and political establishment.
But Every Thing Is Gonna Be All Right
Yes, both Europe and America are facing some hard times but it is time to quit worrying and take action if you haven't diversified your portfolio and wealth in true safe haven jurisdictions. If you've already done this properly – and I believe most of you have – then hold to your current strategies and get on with your life. Living is far more than fake politics, stock markets, gold and worrying about movements in your portfolio. If you have prepared properly for what is coming, then relax. Watch world affairs but don't despair. Listen to a little Bob Marley and know that everything is gonna be all right.
I really like Bob Marley and his song, "Three Little Birds," where he advises the listener, "Don't worry about a thing, 'cause every little thing gonna be all right."
Now, our politicians, the Federal Reserve, EU experts and the financial media have been telling Americans to spend and not to worry that everything is, in fact, going to be all right since 2006. To date they do have a 100% track record of being wrong on every pronouncement so far but eventually they'll get something right because even a dead clock is right about the time twice a day.
The American economy, even after multiple trillions of "pump priming" and new debt on future generations, is still limping along at a fabricated growth rate of around 1% annually. If they are going to lie, Washington should at least "man up" enough to falsify the numbers far more to really make the economy look good to the idiots around because intelligent Americans never believe government statistics and propaganda anyway. Everyone knows the financial establishment is in business to defend and protect Wall Street and the banks so everything from them is suspect. Frankly, the only reason there is some negative factual information on CNBC and Fox Business is because people can read differing opinions and views on alternative media on the Internet.
Yes, the doomsday promoters are daily ranting about economic and dollar Armageddon and how you must act today to avoid the total loss of your wealth and liberties while the establishment propaganda provides a relentless contrary opinion, suggesting now is the stock and bond market buying opportunity of a lifetime. As an investor should you follow the latter-day "The End Is Nigh" crowd or the "Happy Days Are Here Again" refrain?
Here Is What I'm Watching Very Closely Right Now
• Will the Super Committee Failure Cause Another US Debt Downgrade?
They were supposed to come up with $1 trillion-plus in cuts for the US budget. Actually, the cuts would have been faked anyway, as they were cutting planned budget increases not actual cuts, but they can't even accomplish this. My concern is rating agencies may again reduce the debt safety rating of the Washington sovereign debt and this could dramatically cut stock market values and in the long run raise US interest rates and borrowing costs. On the bright side, no one really expected them to act and this will result in automatic cuts over the next nine years, though this will not begin until after the election in 2013. Basically nothing will happen in reducing the budget and our debt will be continually downgraded.
• Will Israel Attack Iranian Nuclear Sites and Create $200 Oil and Economic Crash?
What are the chances of a new Middle East war, oil disruption and prices rising to $200 a barrel, causing another world economic crash? Today, Israeli Defense Minister Ehud Barak said, "The time has come to deal with Iran," and he refused to rule out military action against Iran. • Is Egypt's Second Revolution Beginning Now?
Over the weekend, anti-government protests began to increase in scope and intensity. While the protesters rightly fear the army will not allow a civilian government to have real power, as much of the army leadership are just holdovers from the Mubarak regime, this could provide a real opening for radical groups. The people of Egypt certainly deserve better than what they have but this could really destabilize the region, especially if Israel attacks Iran.
• Tear Gas Politics
In much of Europe, the Middle East and even in America citizens are getting more radicalized on the right and left due to the collapsing economy and deep recession created by the monetary elites, politicians and central banking cartel. The EU and coming American austerity measures and government wealth confiscation actions could cause the people to rebel against existing political institutions and structure.
The people are angry, as they should be, but look at the consequences of a similar period in the 1930s. All governments will crack down on demonstrations and rebellions against those in power and government institutions that failed the people. Police, especially in Egypt and the US, appear to be overreacting. This is not good because when the people grow to oppose law enforcement even when justified, law and order can break down.
• European Debt Contagion Is Infecting Even the Strong Nations of Europe
Now we see a growing number of European banks dramatically increasing their rate of de-leveraging, and interest rates even in France and Belgium are starting to rise. If the firewall around the sovereign debt of Italy fails then the entire continent will likely be thrown into a prolonged recession and debt crisis as rising interest rates and falling bond prices jump the Atlantic to the final western redoubt of stable government bonds, the United States. This is what everyone fears most, no place of safety in the West.
• The Aftermath of the MF Global Collapse
I have many friends and business associates that utilized the services of MF Global for commodity hedging and investing. This was the largest commodity broker in America before their collapse and investors have been unable to even get an accounting much less any of their money out of the firm so far.
Many are asking, "If I can't put my money here and it be safe due to the supposed regulatory oversight of the US, then where will it be safe?" Second, some very respected financial journalists are beginning to seriously question if this bankruptcy was a deliberate attack against those making money speculating against the dollar and favoring gold? I don't know but read this essay today on LewRockwell.com, "MFG Global: Was It A Hit?" and decide for yourself.
As we approach this Thanksgiving holiday in the United States I am going to give thanks for being born in America and redouble my efforts to restore my nation to the position of respect, freedom and limited government for which it once led the world. Part of this means safeguarding my wealth from the many threats growing around the world today, as my children aren't going to have the opportunity I had during my working career.
I'm also going to watch and continue to write about the threats, opportunities and solutions as I see them. But I refuse to allow the difficult times we face today to get me down. Like many of you, I've structured an appropriate amount of my investments outside the dollar and the US financial system. I believe that the important gifts of life, including family, faith and personal liberty, will continue regardless of how destructive our adversaries are and what they have done to the world economy.
I will remain watchful and vigilant and continue to defend my liberties from those out to destroy everything I hold dear. But I've prepared as you have and believe "Every Thing Is Gonna Be All Right" because I've prepared instead wasting my time worrying about the future. On this, at least, I agree 100% with Bob Marley, and this is my message to you.
"Don't worry about a thing,
'Cause every little thing gonna be all right.
Singin': "Don't worry about a thing,
'Cause every little thing gonna be all right!"