The 'Great Depression' and It's Consequences

Below is a lengthy but worthwhile article on the troubled economic times we live in and the myriad negative effects we can expect it to have on society.

One troubling thing is that men are affected more than women. This is a bad sign for me because revolutions are always started by men - especially young men. Unemployment (and its accompanying anger and disillusionment) is perfect fodder for uprisings. Not that I'm saying America couldn't use a little 'change we can believe in', it's just that such change is unlikely to be frictionless.

From an investment perspective, such conditions would favor precious metals (among other things), while anything CNBC pushes should be regarded with extreme suspicion!

How a New Jobless Era Will Transform America

The Arguments for and Against Gold

This is a good article that condenses a lot of the arguments for gold and finishes with a few links to a guy who does not like the metal. In it you will find comments from such luminaries as Alan Greenspan, Marc Faber, Adrian Ash and others.
I found the comments on gold in a deflationary environment interesting. I never really thought of deflation as being good for gold, I just knew I did not want to be at the mercy of a currency that I fundamentally do not believe in as a store of wealth. I wanted the stability of gold, and regardless of whatever deflation there was, I was sure that in the long run we would have inflation due to all the paper and digital dollars being created. But some of the pundits in this article say it doesn't matter if there is deflation or inflation, gold is a 'go-to' asset that will be much sought after.

Is Gold a Reasonable Investment?

Lorax2013 on the Importance of Taking Action

I posted a video by this fellow awhile back. I just thought I'd put this one up as well, as he makes the point that people who are aware of the problems with the dollar and the general direction of the US economy should not just sit and worry about it - they should take some very simple steps to control their own situation as best they can.

It's a point that ought to be emphasized. An individual has a surprising amount of control over the conditions in their life. The election of 'The One' (Barrack Obama) highlights the tendency of people to look to others, often politicians, to save them or to change the conditions they feel assailed by. Loren Howe (aka 'Lorax2013' on YouTube) explains this well in this video, where he talks about a book by a well-known Libertarian.

Taking control of your finances and mitigating (or eliminating) the influence of the banking industry on your life is one of the reasons to invest in gold and silver. This blog is not just about investing, but about financial freedom and self-governance. I think taking your fiat dollars and converting them to something (not just precious metals) that retains value is one of the most important steps you can take.

Meltdown 2.0?

An article like this on a main-stream site like Marketwatch.com is worth a look. Mr Farrell argues that we are getting set up for a bigger meltdown in the near future. (Here is the article, it has two pages).

I have heard the argument made that we will have a big bull run as a result of all this money being created and all the CNBC types will pump it as the return of good times. Then we will have an even bigger crash. Based on the enthusiasm with which the powers that be have provided more dope to the addict rather than let the bastard sweat the junk out of his system, I concur.

I also think that the social mood has a significant effect on the stock market. And this article is one example of the darkening of that mood. I think Obama will be a 'one-termer'.

Mr Farrell also writes about how this will happen :

"The culprit? The Fed, Ferguson says: "Without easy credit creation a true bubble cannot occur. That is why so many bubbles have their origins in the sins of omission and commission of central banks." So the next bubble (and meltdown) is virtually certain, thanks to Washington's $23.7 trillion explosion in debt."

It is too damn easy for people to get credit these days - too easy to go into debt. This does not make for a sound economy (though I imagine it makes certain parties quite rich).

I wish I knew exactly how to trade gold in light of all the inflation vs. deflation debate going on. No one can say for sure how it will play out. (Marc Faber has said there will be deflation first - then inflation through the roof). I think he's right and I would have no problem putting 5-20 % of my net worth in gold and silver and leaving it for 5 or 10 years. But he also has predicted volatility in all asset classes, just as a natural part of navigating the rough seas we find ourselves in there days.

For many of us, the best advice is probably to try not to figure out the short term and focus on the fundamentals : FUBAR.

Golden Shelter from Falling Giants

The Mogambo Guru delivers another eccentric article ...

"I was reading Michael J. Panzner’s book When Giants Fall, a scary-yet-scholarly look at how the hell we got into this mess, and I was impressed with how the title When Giants Fall so perfectly describes America (the heretofore ravenous, gluttonous engine of global economics based on the fraud of an expanding fiat currency) falling on its fat, stupid face."

Read the rest of the article here.