Wealthy Investors Dumping Stocks, Real Estate and Businesses Ahead of Fiscal Cliff as Market Guru Warns of Market Collapse

November 13, 2012

 

As many readers already know, due to long-term irresponsible fiscal policies, the US government finds itself headed to the edge of a so-called “fiscal cliff.”

Policymakers in Washington are trying to strike a deal to head off the carnage, but their track record is awful on such deals. What we are soon to be faced with is a combination of large budget cuts and sizable tax increases, which will kick in if nothing is done.

Faced with the possibility of tax hikes, America’s wealthy investors are taking action ahead of time and it isn’t good news for the markets; wealthy investors are liquidating stocks, real estate and even whole businesses to avoid higher tax rates in the future. This is obviously terrible news for the stock market, the real estate market and the economy as a whole, creating the type of environment in which hard assets, such as gold coins, thrive.

http://www.cnbc.com/id/49792979

Meanwhile, long-time market analyst, Marc Faber of The Gloom Boom and Doom Report actually says that there will be no fiscal “cliff.” Nevertheless, he predicts that corporate profits are certain to disappoint, resulting in a stock market decline of 20% or more. Faber points to Apple Computer as a leading indicator; Apple’s stock has fallen 20% in recent months already.

http://www.cnbc.com/id/49802535

 

 


Unemployment: America in Denial

August 3, 2012

The US economy is in trouble, though many Americans, and much of the mainstream media are in denial.

The latest unemployment numbers are out and they show another slight increase, to 8.3%. The trend has been headed in the wrong direction for a few weeks now.

The economy is NOT improving and sooner or later this is bound to be reflected in the financial markets. There is just no scenario in which the stock market and real estate market can be healthy while the overall economy is sick.

Government statisticians tried to put a good face on the unemployment news by coupling it with the tid bit that the economy added 163,000 jobs in July, the highest number in some time. But that figure has to be taken with a grain of salt because in each and every month so far in 2012 that jobs report has had to be revised downward in the following month.

In other words, someone, somewhere in the halls of government has their finger on the scale. It is just not reasonable to believe that it is just a coincidence that the employment figures can possibly be wrong in the same direction 8 months in a row.

Yesterday CNBC ran a story that reinforces the contention that the US economy is actually already in a recession and we are just are in denial about it. The unemployment picture is actually much worse than it appears…

http://www.cnbc.com/id/48468748

Investors may be bewildered by this news, but they need to shake off the cobwebs and realize that this all adds up to eventual very bad news for the financial markets, the stock market in particular. Meanwhile, inflation is making a comeback. Fuel prices made a surprise jump in July and drought is putting upward pressure on food prices across America.

This is building a picture that looks very much like STAGFLATION. Wise investors need to protect themselves against stagflation and the way to do so is to look to history.

The last time stagflation was a serious issue in the US economy was back in the 1973-75 time period, when the stock market fell 45% and the price of gold tripled…

 


Wall of Worry Extends from the USA to Europe

June 22, 2012

In the wake of yesterday’s serial downgrading of the world’s biggest banks, it is clear that the world economy and financial markets are entering a dangerous period for which investors must seek the protection and security of gold.

But we might add this morning that there are other items in the news that investors need to pay attention to. And these additional news items extend around the globe as well.

Starting right here in the USA, we have a news article about the bleak real estate market, which remains in a depression. (Yes, a depression.) We have been hearing from some real estate pundits for some time now that the real estate market is going to make a comeback. So far, there is no sign of it. In fact, as the article below mentions, the housing market just hit a fresh 15-year low. It seems to us that before the market can recover it must stop falling first.

http://blogs.smartmoney.com/advice/2012/06/21/5-housing-markets-where-renting-beats-owning/

There was a time when real estate was considered a suitable alternative investment for investors seeking diversification from stocks, bonds and cash. That just isn’t so any more. Real estate not only fell right along with the stock market back in the 2008 financial crisis, but it played a role in causing the bear market in stocks.

Investors seeking alternative assets need to look to true independent markets, such as rare coins and precious metals, which have historically had a low or even negative correlation with stocks.

Switching to conditions across the Atlantic Ocean, we have two news items which, while not pleasant, are issues that investors in the US ignore at their peril. Readers may recall that the markets breathed a sigh of relief at the results of the Greek elections last weekend. Greece often seems at the edge of the abyss, but also always seems to pull back at the last moment. Nevertheless, Greece is in anything but good condition. How bad are things in Greece?

Thousands of Greeks are lining up for food handouts in a scene reminiscent of the Great Depression:

http://www.dailymail.co.uk/news/article-2161651/Starving-Greeks-food-thousands-politicians-finally-form-coalition-government–long-last.html

It does very little good for the European Union to bail out the Greek government if the underlying economy in Greece is so bad that the people cannot feed themselves. The situation is not sustainable and is symbolic of the fact that, at the end of the day, no one really knows what to do to solve this building crisis. (Fortunately, there is something that individual investors can do and that’s to own gold. For centuries gold has endured every crisis known to man.)

To elaborate on the European theme, we were all greeted this morning with a stark warning from Italy, the next country in line with a debt crisis problem. Italy’s Prime Minister, Mario Monti says that there is only one week left to save the euro.

http://www.guardian.co.uk/business/2012/jun/22/mario-monti-week-save-eurozone

Every time it seems that policymakers claim that they have gotten their arms around the crisis in Europe, a new near-death experience comes along. Investors should have no confidence at all that there will be a positive outcome from all of this maneuvering. And don’t assume that America is insulated from the fallout. After all, yesterday, the biggest investment banks downgraded by Moody’s were American firms–all because of perceived vulnerability to the outcome of the European crisis.

Prepare ahead of time by accumulating a diversified portfolio of gold investments. Contact Coin Trader today.