- Be early out the door before the Ponzi scheme collapses. How? Exchange paper investments for hard assets.
- Build your financial base with diversified cash holdings and precious metals
- Monitor the four key indicators most likely to presage a market collapse
- Use time to your best advantage
If you have not yet read Part I: What to Do When Every Market Is Manipulated, available free to all readers, please click here to read it first.
One lesson here is that the system is now out of control – and sometimes lacking the necessary safeguards and trust required to have confidence that one’s wealth will not simply evaporate or be stolen with the tap of a keyboard at some dark point in the future.
Confidence happens to be one of the most important assets of a Ponzi system, and it is being steadily eroded by the cumulative failures of the Fed, the SEC, the European Central Bank (ECB), the Bank of England, the Bank of Japan, and every other government body that have recently tossed caution, rules and precedent to the wind in their efforts to preserve the status quo. I think this is an extraordinary mistake.
Unfortunately, as the brokerage accidents MF Global and Peregrine Financial taught us, knowing which type of firm you have your money with (e.g., prime broker vs. broker vs. fiduciary trust), as well as being confident in your specific firm's financial health and management practices are prudent financial practices. The financial advisory firms that we recommend to people know all about these differences and will be happy to explain them to you in detail. They are also exceptionally good at managing risk in these uncertain times.
We always advocate investing in yourself and your homestead as the first course of action. This quiet summer has been a real snooze-fest for those tracking the markets with the VIX volatility gauge plumbing multi-year lows. That’s the good news. Hopefully you’ve used this time to put in a garden or fine-tune your green thumb, practice one or more new skills, and/or install energy systems. This quiet period will not last…the news out of Europe should make that abundantly clear.