I expect the current financial bubble to burst during the Second Quarter of this year.
There are too many concurrent antecedents to the forthcoming burst to be ignored.
Greece is not going to be the cause of this pop. Greece will be the victim. Liquidity will be blamed. As in, not enough. But this isn't, and won't be true. There is plenty of liquidity. The problem will be, as it was in the Weimar Republic, currency devaluation.
In my last post, I put up a video of a mathematician talking about the simple math that leads to doubling of value; whether that value is one of debt, or growth. The amazing thing is, I heard, tonight, Governor Romney complaining about a sixty percent increase in government spending during Senator Santorum's tenure in the U.S. Senate. Taking a look at the math, it's obvious that government spending, during Senator Santorum's tenure as a U. S. Senator, was less than seven percent, per year.
How effective would Governor Romney's objection had been, if he were to have said, "you know, when Senator Santorum was in the U. S. Senate, growth in federal spending occurred at under a seven percent annual rate!"
But, let us not parse the knowable. Let's think about the unknowable.
What will be the value of an ounce of gold next year? What will be the price of gasoline next year?
When President Obama was elected, the price of gold was $700.00 per ounce. The price of gasoline was $2.00 per gallon. The majority holder of debt for U.S. debt was China. Today, it is the United States. Imagine the poverty that has been imposed upon U.S. citizens by the current administration. We have move back, each and every one of us, by more than fifty percent, in JUST THREE YEARS.
Not ten years. Not twelve years.
Three years. And the bad things about monetizing debt are still standing off-shore. We haven't yet experienced the effects of excess liquidity, since the markets have been extraordinarily defensive in their asset allocations. We have parked most of our national economy in deep water, waiting for the flood. (And, worse yet, all of our retirees who have made investments are slowly being robbed of their capital, as markets seek to trade on dips.)
Nobody loves the rich. They have stuff and money, and stuff. It's easy to hate the rich, since, if you hate the rich, chances are you're either the spawn of the rich, or wish to be rich yourself. Envy is a hellofan attitude. "They have stuff that we want to have." Well, yeah! Hella! Want me some rich guy stuff!
I don't know how you're getting ready for the next bubble-burst. I'm planning acquisitions. Why? Because, when bubbles burst, some are able to make money, some aren't. In 2008 I made money. Have for three years. I depend upon my clients to understand why I'm spending their money, and what the benefits for those expenditures are. They are stated. My clients give me their money, freely. I don't have the authority to work in their own best interests as a mandate provided by the government. They can choose not to use my services. They are free.
After years of Solyndras, isn't it time we look at the mandates our government has imposed upon markets, and more importantly with the imposition of ObamaCare, ourselves, that we take a look at the success ratio of government investments to outcomes? Governments suck at investments.
People don't. Unless they are idiots. (See, equity holders in Washington Mutual.)
Time to tuck in. Gold coins that I bought years ago at thirty dollars each are now worth $1700.00 per ounce. Silver I bought for face value is now worth $33.50 for ten dimes. Money has value. Good money drives bad money out. Gresham's Law. I'd gladly pay you Tuesday, for an hamburger today.
Be smart. Look for alternatives.