this will be an unparalleled decade of wealth destruction, bankrupty, and demise of hedonistic, selfcentered, spoiled, and compulsively consumptive BabyBoomers... coupled by the gradual but not catastrophic erosion of GrayBeard wealth
those not prepared to step aside from the destruction will be very sorry
those who resume old patterns of investing will be doomed
those who rely upon the parade gaggle of mutual funds will be badly disappointed
their management is inexperienced, their themes are smeared and blurred, their loads are heavy and unjust
next bubbles to break: real estate, USdollar, bonds
Greenspan's final legacy will be the slow decline of the dollar, icing on his cake
followed by continued declines in stock major averages
climaxed by unexpected inflation as a result of unprecedented and irresponsible money supply infusions beyond all levels of reason, a true panic
next week will see the final rate cut
this inflation, dollar decline, and world distrust of America as an international haven will result in a major shift from the US to Europe
the Euro will strengthen as the dollar weakens, while Arabs store this money in non-American paper
the US Bond market will take major hits, finally bring wealth destruction to the seasoned GrayBeards who profited from the Post-Y2K declines
but their losses will be gradual, slow, erosive, and not wipeouts
so stocks and bonds and realestate will simultaneously decline in value
Boomers and GrayBeards alike will live in confusion
the lack of a gold standard for world currency, and the abuse of debt will result in a worldwide call for stability as history comes full circle toward hard assets not leveraged by debt
the IMF, UN, WTO, EU, and central banks will be at loggerheads to debate a return to the gold standard
its absence has ushered in an era of debt abuse
the hard assets that will find renewed value: gold, platinum, oil, gas, industrial metals, timber
property has been abused by Boomers
it is part of their debt structure, along with credit cards
"party until we drop"
following the 100% rise in values from 1995 will be the biggest distress property sale since WW2
as Boomers age, they will transition from borrowing against equity to cashing in on property equity
how to avoid: get under the radar with smallcaps and microcaps and nanocaps
look for growing companies that brokerage house whores have not heard of
follow the impending shortages -- energy, health
ignore like panhandlers the bigname stocks with no growth and high price
never purchase stocks with PEratios over 50, which means the majority of tech stocks
rent your home or townhouse or apartment
I remain a humble jackass
stick this post on your refrigerator next to the Dec2k one which called for a Naz decline to 1650
this time, I make no predictions on stock indexes
they will repeatedly retest old lows
and sometimes establish newer lower lows
but not all sectors will suffer, and some will thrive
the concomitant decline of stocks and bonds will confound many
the US economy is going down a path similar to Japan's
but key differences will allow short periods of growth and semi-prosperity
GreenScrotum broke the bubble with clear intention and purpose, a bubble he helped to build, cheered in building, and pushed constantly with easy money policies
the wild card: war in Arab oilfields
/ jim |
