How to Preserve Your Capital in a Depression
In this article Doug Casey presents the case that we are in the early stages of an inflationary depression, commodities are soaring and next will be retail prices. In an inflationary depression financial assets aren’t worth the paper they are printed on and currently they are precious few bargains available in paper assets anyway. So what can you do to protect yourself? In this excellent analysis Doug shows what we can do now… before it’s too late. Tim McMahon, editor
Keeping Capital in a Depression
By Doug Casey, The Casey Report
Nothing is cheap in today’s investment world. Because of the trillions of currency units that governments all over the world have created – and are continuing to create – financial assets are grossly overpriced. Stocks, bonds, property, commodities and cash are no bargains. Meanwhile, real wages are slipping rapidly among those who are working, and a large portion of the population is unemployed or underemployed.
The next chapter in this sad drama will include a rapid rise in consumer prices. At the beginning of this year, we saw the grains – wheat, corn, soybeans and oats – go up an average of 36% within one month. In the same time frame, hogs were up 30.7%. Copper was up 29.1%. Oil was up 14%. Cotton was up 118%. Raw commodities are the first things to move in an inflationary boom, largely because they’re essential to everything. Retail prices are generally the last to move, partly because Continue reading
An Investment Lesson from Deflation Scares
On November 6, 2002, The Wall Street Journal, in a front-page article entitled “Inside the FED, Deflation draws a closer look”, stated that the FED was discussing the possibility of deflation at a country inn in Woodstock, VT. It said “central bank officials” attended this ominous-sounding meeting.
But wait, when was this meeting? A careful reading of the article reveals that the meeting happened in 1999! This is news? A meeting three years ago is now making headlines? What gives?
Why would the WSJ publish it now? Why not 3 years ago? The answer is simple and once you understand the ““why” of it you will become a much wiser investor.
The why is simple… front page headlines sell papers. Continue reading
The MIP Accurate Even Under Stress
Why the Deviation?
This historical chart has been posted in response to a question posed by a regular viewer. He asked why our projection deviated so drastically from from the actual CPI as shown by the red line on this chart. As you can see the deviation occurred for several months but during the most recent months our projection from last November has been amazingly accurate. As you can see the red line has tracked the “most likely” line very closely.
So the question remains why was our projection so far off during the period from October through April? We must remember that the MIP is a mathematical projection and there are a few thing beyond its scope. Those things are large random political forces.
Some examples of these type of forces are: Continue reading
