muses of the moment

March 3, 2010

Where do we go from here?

I feel like I am just waiting for the other shoe to drop in this investing cycle. It’s not fixed, it’s going to get worse, but when and how bad.

Here is an update from some of the sources I read to give you a little time line. Groovygirl’s comments are in blue.

From Martin Weiss with Money and Markets (Martin is into ETFs and short-term trading, groovygirl is not, but his long-term suggestions have been good so far):

#1:Starting this year (2010), US stocks are likely to fall in a zig-zag pattern for the next 3 years. We have not hit bottom in stocks yet, do not buy more.

#2:Gold (and other precious metals) will skyrocket higher than $2,000 per ounce by the end of 2011. This is the safe-haven investment.

#3:The USDollar Index will begin to sink in 2010 and not hit bottom until early 2012. This could be the inflation, hyperinflation time. (see side musing below)

#4:Most commodities will not make new, all-time highs. I think commodities will be better in the future, may be a time to buy a small portion and hold for a longer term (5-10 year) investment (past 2015).

#5:The US Economy will suffer a severe double-dip recession in 2011, worse than 2009. If you have not saved money for a potential job loss, do it now.

#6:US budget deficit will surpass $2 Trillion in 2012. This will hurt the ability for gov to continue bailing out everything, so some markets may collapse further. States will not be able to rely on gov hand-outs, expect less from local gov and higher taxes.

#7:Bond prices will plunge because of out-of-control deficits and a sinking dollar. Do not buy bonds……yet. Buy later in the K-wave winter cycle, when interest rates rise.

#8:2012 will be the year of maximum turmoil in markets and peak tension in society. Be prepared for angry, tense people. Side step them as much as possible. Turn off the TV if it is too depressing. Work your plan, you already know what will happen. 

#9: 2012 will bring massive wealth shift from old fortunes that are destroyed and new ones that are created. This is already in process.

We have a slight breather here in early 2010, don’t waste it. Prepare your family and investments for 2012-2015. All of these predictions are in line with John Williams, Martin Armstrong, James Turk, and Jim Sinclair.

Side musing: some hyperinflation thoughts from When the hyperinflation phase hits, you will want tradable items and stored food for at least a 6-month period. This is when supply disruptions will happen.

What was the best investment in the Weimar Republic? Gold and silver, to use to buy real estate when the market hit bottom. But no one had their gold and silver in Germany, they brought it into Germany to buy devastated, cheap real estate at the end of the war.

Additional side musing: keep an eye on that middle east thing that no one in the media is talking about. Remember Jim Sinclair calls for a middle east “disruption” by Jan. 2011. 

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