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Our "As You Wish" Markets Have Reached the Cliffs of Insanity

Next stop: the Pit of Despair?
Friday, July 19, 2013, 12:41 PM

In the classic fantasy rom-com The Princess Bride, the beautiful maid Buttercup orders the farm boy Westley to perform numerous tasks to test his servitude. No matter the magnitude of the request, Westley simply answers "As you wish" and makes it so. Buttercup eventually comes to view Wesley with similar devotion, and true love is born.

Similarly, investors have fallen back in love with the capital markets, whose continual response their increasingly irrational hopes has been "As you wish." » Read more

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Get Ready for Rising Commodity Prices

Driven by hot money seeking a low-risk haven
Tuesday, July 16, 2013, 9:27 PM

The human mind seeks a narrative explanation of events, a story that makes sense of the swirl of life’s interactions.

The simpler the story, the easier it is to understand. Thus the simple stories are the most attractive to us.

But conspiracies and power groups do not always provide comprehensive explanations for what we observe. » Read more

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Living Two Lives

And what to do about it
Friday, July 12, 2013, 3:12 PM

You know that something is very wrong.

Even if you ascribe to the recovery meme and ingest the current narrative that the economy is about to take off and that stocks and houses will once again make us all rich, you know deep down that the story of perpetual exponential growth has an ending.

Maybe not immediately, but someday, certainly, the doctrine of endless growth will have to end. And you know that in all likelihood it won't end on human terms, in a manner of our careful choosing, but on some other terms set by exhausted ecosystems and depleted resources interacting with our highly complex economic and financial systems. » Read more

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The Dead Weight of Sluggish Global Growth

Weighing heavier each year
Tuesday, July 9, 2013, 1:04 PM

Global Slowdown

The U.S. economy weakened appreciably in the first quarter of 2013. But what if this weakness persists into the second quarter just completed, and worsens still in the second half of this year? Q1 GDP, as reported on June 26th, was revised lower to just 1.8%. And various indications suggest that Q2 could come in slightly lower still, at 1.6%. Might the U.S. economy be guiding to a long-term GDP of 1.5%? That’s the rate identified by such observers as Jeremy Grantham the rate at which we combine aging demographics, lower fertility rates, high resource costs, and the burdensome legacy of debt. Well, after a four-year reflationary rally in just about everything, and now with an interest-rate shock, the second half of 2013 appears to have more downside rather than upside risk. Have global stock markets started to discount this possibility? » Read more

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Why the Bullwhip Effect All But Guarantees Another Poorly-Handled Liquidity Crisis

Complex systems break under stress
Monday, July 1, 2013, 11:54 AM

One of my more memorable moments in business school came during an Operations class. The topic for the day was the Bullwhip Effect, a very real and vexing phenomenon that occurs in forecast-driven distribution systems.

Essentially, when there are multiple parties in a distribution system, the imperfections in each player's forecasts (no forecast is consistently perfect) compound to wreak increasing havoc over time, even if demand stays relatively stable.

Grasping how this works is somewhat non-intuitive... » Read more

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Europe's Precarious Banks Will Determine the Future

Ticking time bombs
Tuesday, June 25, 2013, 5:09 PM

Crying Wolf?

It is easy to get the impression that the naysayers are wrong about Europe. After all of the predictions of Armageddon, ten-year government bond yields for Spain and Italy fell to the 4% level, France (which is retreating into old-fashioned socialism) was able to borrow at about 2%, and one of the best-performing bond investments has been until recently – wait for it – Greek government bonds! Admittedly, bond yields have risen from those lows, but so have they everywhere. It is clear, when one stands back from all the usual euro-rhetoric, that, as a threat to the global financial system, it is a case of "panic over." » Read more

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Everything Is Being Sold

Market crash warning
Thursday, June 20, 2013, 3:55 PM

Global financial markets are now in a very perilous state, and there is a much higher than normal chance of a crash. Bernanke's recent statement revealed just how large a role speculation had played in the prices of nearly everything, and now there is a mad dash for cash taking place all over the world. » Read more

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PeakProsperity.com

A First-Hand Account of The Peak Prosperity Seminar

Sharing, learning, and putting plans into action
Friday, June 14, 2013, 11:27 PM

Have you ever wondered what happens at one of our Peak Prosperity weekend seminars? Every year, Chris and the Peak Prosperity team host two weekend-long retreats to explore topics related to the Crash Course, up close and personal. So what are these retreats like? » Read more

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Is Gold at a Turning Point?

Precious metals investors' heartbreak may soon be over
Wednesday, June 12, 2013, 9:18 PM

There's no way to sugarcoat the dismal performance of the precious metals in recent months. But a revisitation of the reasons for owning them reveals no cracks in the underlying thesis for doing so.

In fact, there are a number of new compelling developments arguing that the long heartbreak for gold and silver holders will soon be over. » Read more

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Ward Hooper

Finding Your Way to Your Authentic Career

Transition to the fulfilling work you were meant to do
Thursday, June 6, 2013, 10:22 PM

Unfulfilled by your job? Wish the work you do on a daily basis were more aligned with the person you are (your interests and values)?

You're not alone.

In fact, the majority of workers would chose a different career path if given the chance. » Read more