Thursday, January 22, 2009

Where is our "safe haven" - Hint, it is not the US Government debt

Taken from the prudent bear article (The Perma-bear website)

As I rant and rave about the bailout package about the American debt fueled lifestyle being solved by injecting more debt into our lifestyle. This is basically trying to cure a heroin addict with giving the addict more heroin. This episode is about how it is "expected" for other nations to purchase our debt, especially when the return rate is at near zero percent as some people like to say the ultimate safe haven against the market fallout is to get into American bonds.

As usual, in order to make money in the markets is to SUCCESSFULLY anticipate where the next bull market is going to be. A general rule is that once a particular bull market is heated up, it's already too late to get in, and you may be better off to short that bull market.

For example:
  • The 1970's Gold bull market
  • The 1980's Hair Spray market
  • The 1990's Dot-Com boom
  • The 2000's Housing Market




In order to anticipate the next bull market, it would pay to do your homework and make your own decision to decide the next bull market.

As far as a safe haven goes, my bet is on gold and commodities. In a nutshell I am betting on massive inflation problems within the next couple years. Since President Obama wants to pull off his second term, he will administer a dose of economic heroin by implementing second new deal into the economy and at least that will provide jobs and money flow in the short to medium term.

The massive side effect on this is inflation due to the simple law of supply and demand. They are printing dollars with unsold government debt bonds and when other nations start cashing in to jump start their own economies, the United States of America will be holding the bag once again.

With that said, go do some homework on why gold and commodities are the ultimate anti-inflationary investment.

1 comment:

Philimanjaro said...

Hey man...

I saw your comment on another blog regarding the OSCP labs / exam.
I've hit a brick wall as well. I would really like to have someone to bounce ideas off of.
i have about the same amount of time invested into the labs as you do.
Take care...