This Could Be Coming To A City Near You

Expecting to retire with a pension from your government? Is your money in an IRA, 401K or other managed accout with a financial advisor? Do you own mutual funds? Robert Kyosaki says in his book ‘Conspiracy of the Rich’, that “mutual funds are simply an unintelligent investment designed for the financially unintelligent” (page 145).

These are questions you need to answer and then begin to get informed on financial matters because there are signs the economy is recovering and many more that point to a looming collapse creating The Greatest Depression. There are several economists and business people that have been right in their predictions of the dot.com bust, the mortgage meltdown and the collapse of the Euro. These same people continue to predict the collapse of world economies, including the US. I have spent many hours and read several books, articles and collections of data and believe there is a higher probability of a depression than a chance of recovery. I sure hope I’m wrong, but I think it is important to prepare for the worst and hope for the best (preparation is a strategy – hope is not).

It is almost impossible to fathom any of our states going bankrupt and seeing state employees get reduced pensions – if they get anything at all, yet California, Michigan and Illinois are very much on the verge of bankruptcy. What we are seeing in Greece and soon to be seen in Portugal and Spain is a sign of what the US can expect if we continue on our current economic path (which may be too late to correct). The funny thing is that I see the polls and talk to a lot of people who agree that Americans will have to make many sacrifices from reduction in entitlement benefits, reductions in pensions and more to avoid economic disaster – but most are upset that it may happen to them – and will continue to vote with this in mind – making it tough for politicians to make the hard choices to fix the mess! I highly recommend reading this short article that was in the news today:

http://news.yahoo.com/s//ynews/20100504/wl_ynews/ynews_wl1925

These protests in Greece are from people not getting their pensions as expected. Social unrest is breaking out and we will see the same thing here in America. Our tax dollars, via the IMF, are going to bailout Greece, but this bailout only keeps Greece propped up for ONE year – then what? Delaying the inevitable by governments bailing out countries, markets, etc. is, in my humble opinion, completely wrong. Market forces should be allowed to work and make necessary corrections. I have a person that has been really accurate in assessing the economy and he calls Greece “the canary in the coal mine”.

The question is HOW to prepare for the worst. Will the stock market drop or increase? If it drops, how far will it drop? I have heard anything from 2,000 to 6,000 from very soon or in the next 5 years. After the Great Depression of the 30’s, it took the stock market 25 years to recover to its’ high before the fall. Do you have 25 years to wait for the market to return before you retire? Should you be in cash? The dollar strengthened over the weekend, but we are also in our third currency in the United States and as our government has cranked up the printing presses to print more money, the value of the dollar is rapidly decreasing. Should you own gold and other precious metals and if so, how? What stocks will perform better than others in uncertain times? How about real estate? Mortgage resets and lending requirements (both residential and commercial) could create many opportunities for investors to snap up real estate at bargain prices soon, but what type of real estate is better than another?

Originally posted 5-5-2010

I think it is absolutely critical for most people to take more control of their financial future. Most experts predict a transfer of wealth in excess of $50 trillion dollars to take place (it has actually been happening already – can you say ‘short Fannie Mae & Freddie Mac?’). This transfer will be from the uninformed to the informed. For me, I am preparing by getting better informed. I have set goals to get out of as much debt as possible and begin to manage my own money, getting out of all mutual funds and searching for investments that should do very well in our current state of the economy (and even better if it gets worse). If you want to know the books I have read and am reading or other places where I am getting my information, call or reply to this email. All of this is very interesting to me and I am way behind on getting prepared. I welcome your thoughts, opinions and ideas. I end this with a quote I heard recently from a pastor, “Awareness is not a substitute for preparation”.