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First The Fall...

A Special Report: Deflation is here
Tuesday, February 24, 2015, 12:41 AM

One of the models of the future that I favor is the Ka-Poom theory put out by Erik Jansen of iTulip.com back in 1999.

Basically it states that the end of a bubble era begins with a sharp deflationary event (the ‘Ka’ part of the title), but ends in a highly inflationary blow-off, (the ‘Poom’).

It’s a one-two punch. Down then up. » Read more

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A Quick Sanity Check

A cautionary reminder of where we are in this story
Monday, January 19, 2015, 12:06 AM

Sometimes it pays to step way back and look at things from a high level.

In response to the 2008 crisis, the world's major central banks pumped an unprecedented amount of monetary stimulus into the system -- all in the name of kick starting enough economic growth to pull the planet out of its fundamental sinkhole of Too Much Debt.

More than six years and over $4 trillion later, what exactly can we say it did for us?

Not enough, as the following short video summarizes. » Read more

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The Good News In All The Bad Data

A rare convergence of confidence in future developments
Friday, June 13, 2014, 12:14 AM

Today's financial markets make a mockery out of sanity and logic. The difference between what SHOULD happen and what IS happening is perhaps the greatest it has been in our investing lifetimes.

If you're perplexed, flummoxed, frustrated, stymied, enraged, bored, irritated, insulted, discouraged -- any or all of these -- by the ever-higher blind grinding of asset prices over the past several years, despite so many structural reasons for concern, you have good reason to be.

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How To Position Yourself Now

Components of a good investing plan
Friday, June 13, 2014, 12:13 AM

Executive Summary

  • Planning determinants for:
    1. Precious Metals
      • Bullion: physical
      • Bullion: stored & tradable
      • Miners
    2. Stocks & bonds
      • Remaining long
      • Strategies for shorting
    3. Real Estate
    4. Debt Management
    5. Income Security
    6. Local Investing
    7. Personal Preparations
    8. Community Preparations

If you have not yet read The Good News In All The Bad Data, available free to all readers, please click here to read it first.

Though we strongly advise in Part 1 to move to cash, it's essential to remember that this is largely a transitional maneuver. The goal is to keep your powder dry during the coming deflationary storm, and then deploy it in as intelligently and timely a manner as possible when your dollars can buy quality assets at excellent discounts. In this Part 2, we walk you through the principal components for building your investing action plan for both in advance of, and when, that time arrives.

Also, we understand that for reasons of options and attitude, simply moving your portfolio 100% into cash is unpalatable or unrealistic for a number of people. Some of you will want to, perhaps even need to, have a percentage of your capital remain in the financial markets for the foreseeable future. So we discuss both long and short strategies for you to evaluate and pick whichever best suits your personal situation.

It's important to understand that the solution set contained below is a superset for your consideration and not a one-size-fits-all recipe (i.e. do NOT take it as personal investment advice!). As strongly urged in Part 1, its best use is as a structured guide for you and your financial adviser to use together in discussing and developing an investment plan customized to your goals, needs and risk tolerance.

Suffice it to say, everything discussed in this report (even the % cash component mentioned in Part 1) should be reviewed with your financial adviser before taking any action. Am I being excessively repetitive here in order to drive this point home? Good...

Precious Metals

One of the biggest mysteries that continues to perplex Chris and me is: Why is central bank liquidity creating price bubbles in every asset class EXCEPT the one you would expect it to most?

Here we have everything from Facebook stock to Las Vegas houses to junk bonds to Beats headphones catching bids at insane prices. As Chris discussed last week with economist Steen Jakobsen, the data for stocks over the past year shows that the worse the balance sheet, the better a company's stock performance has been.

Why is everything down to pure crap being lifted by the giant pool of money sloshing around the planet, but prices for gold and silver -- arguably the highest-grade assets to own -- are so badly languishing?

I won't rehash all of our speculations for why, as there are dozens of recent articles on this site speculating on the topic. But as this year's mega-report on gold drives home, the actual fundamentals for owning precious metals not only remain intact, but they are expanding materially each year. 

Well, the good news here is that the precious metals market is the one place you don't have to wait for the "buy at pennies on the dollar" experience. It's here now.

Prices are not only far below what the fundamentals justify, but... » Read more

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The US Housing Market's Darkening Data

Get ready for the return of declining home prices
Tuesday, June 3, 2014, 12:15 AM

The more we look at today's data, the more it looks like that we are in a new type of pricing cycle -- one that homeowners and housing investors have no prior experience with.

And the more we learn about the fundamentals underlying the current cycle, the harder it becomes to justify today's home prices on any sustained level. Meaning a downward reversion in home values is very probable in the coming years. » Read more

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Get Ready For Falling Home Prices

Don't be as vulnerable as you were in 2008
Tuesday, June 3, 2014, 12:15 AM

Executive Summary

  • The new drivers of the current housing price cycle
  • Why investment capital, not normal household formation, has become primary for pricing
  • What the implications of an investment-driven housing market are
  • Why prices will fall & what homeowners (residents & investors) can do now

If you have not yet read The US Housing Market's Darkening Data, available free to all readers, please click here to read it first.

The The New Drivers of The Current Housing Cycle

1. Cash

First, we are currently seeing something in residential real estate markets that has not occurred in our lifetimes – the magnitude of all-cash offers. 40-50% of residential real estate purchases have been for cash in recent years. This phenomenon has no precedent in recent economic history. Why is this happening?  We need to remember that a primary goal of the Federal Reserve in setting short term interest rates near 0% was to induce investors to buy “risk assets” – think real estate and common stocks.  By eliminating rate of return in safe securities such as Treasury bonds, CD’s, etc., the Fed essentially forced formerly conservative investors to purchase higher risk assets in order to get any acceptable rate of return.

In good part, the all-cash offers are coming from investor’s intent on buying to rent. Intent on obtaining an acceptable cash on cash rate of return as yield can no longer be found in safer investments. This crosses the boundaries between investors in the asset accumulation phase of life and retirees starved for yield, draining formerly CD-centric bank accounts in order to purchase income-producing rental properties... » Read more

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Are You Crazy To Continue Believing In Collapse?

That it hasn't happened yet doesn't mean you're wrong
Wednesday, March 5, 2014, 4:16 AM

It’s nerve-wracking to live in the historical moment of an epic turning point, especially when the great groaning garbage barge of late industrial civilization doesn’t turn quickly where you know it must, and you are left feeling naked and ashamed with your dark worldview, your careful preparations for a difficult future, and your scornful or tittering relatives reminding you each day what a ninny you are to worry about the tendings of events.

Persevere. There are worse things in this life than not being right exactly on schedule » Read more

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2013 Year in Review

Austerity is not a policy
Friday, December 20, 2013, 12:36 PM

Every year, friend-of-the-site David Collum writes a detailed "Year in Review" synopsis full of keen perspective and plenty of wit. This year's is no exception. Moreover, he has graciously selected PeakProsperity.com as the site where it will be published in full. It's quite longer than our usual posts, but worth the time to read in full. » Read more

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The Wisdom of Looking Like an Idiot Today

Now is the time to act with the courage of our convictions
Tuesday, December 3, 2013, 9:42 AM

Perhaps you still remember the speed and depth of the 2008 credit crisis' arrival, and its toxic impact on asset prices, jobs, and overall trust in the financial system. Maybe you took notes during the preceding tech and housing bubbles and their aftermath. If so, you likely swore that "Never again!" would you put your wealth at risk during such obvious times of public mania.

So, if this sounds at all like you, five years after the 2008 crisis, how is the "prudent" strategy looking today? » Read more