I think that 2012 will be a growth year and 2013 might be really big growth. I will explain why I think that in a second but first the recommendations.
1) If you hold gold or other metals be thinking about selling. I already sold half of my gold for a small profit and all the rest will be pure gravy. Gold may go up in the short term but is still in a bubble. I think $2000 is a psychological barrier and I will unload the rest of my gold before that point or if they price begins to drop again. Watch it daily.
2) Now is actually a good time to buy stocks. But look for solid companies with good P/E and depressed prices.
3) Stay out of debt, but if you need to purchase something big like a car or house, then now is the time since I don’t think these low rates will last much longer.
Now for my explanation. I think that the markets, business leaders, investors, and almost everyone with any sense has completely discounted Team Obama, and Bernanke. In other words there is no downward push left to their failed policies. What everyone is doing now is just basically waiting for regime change.
The Euro debt crises has also had a slow down effect on investment, but I think the Euros will handle their problems and will come out a bit stronger. It is important to note that unlike our nation, nearly every European country has taken steps to reduce it’s huge bloated government. Small steps to be sure, but steps in the right direction. Meanwhile Eastern Europe and the rest of the world are still experiencing growth, just not as fast as before.
My belief based on past experience is that the worst of the Euro crises will coincide with the Republicans solidifying behind one candidate, and by middle of next year there will be a modest increase in investment, and employment.
Of course the idiots in the government could still find some way to screw everything up but you have to have some hope.
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Question
nathanalbright (Diary) Saturday, November 5th at 9:26AM EST (link)You seem really optimistic on the whole European bailouts. What are the odds that the European bailouts (a lot of which is our borrowed money) are going to help nations like Greece, Italy, Portugal, and Spain that seem to show no fiscal restraint and that (like Greece) look ready to go lynch-mob style on those who tell them they need to tighten their belts like the Irish? How do you see that working out when the numbers needed to bail out these nations just keeps getting larger and larger and no policy change seems in sight?
I wish I could be as sanguine about the “no downward push” left to Obama’s policies. After all, he hasn’t started raiding life insurance policies yet by making those taxable. There are plenty of ways that we can still be harmed by Obama’s policies that have not been touched yet. Don’t tempt them by saying it can’t get worse. It can always get worse, just as it can always get better.
The deals that the PIIGS make with the other Euros
kyle8 (Diary) Saturday, November 5th at 6:04PM EST (link)will force austerity on them. But they already have begun to moderate their debt.
“Nothing works like freedom, Nothing succeeds like liberty”
Kyle
Don't drink the kool-aid
nathanalbright (Diary) Saturday, November 5th at 10:03PM EST (link)If the European Union can’t stand up to mighty Greece, what makes you think that they will be able to force austerity on Italy, Spain, and Portugal, or Hungary for that matter. Or perhaps this is what you meant by “Italy moderating its debt and adopting austerity:”
http://www.theglobeandmail.com/news/world/europe/european-debt-crisis-spreads-to-italy/article2225003/
Oh, wait. That sounds like the sound of crickets chirping and doing nothing until they get bailed out. Too bad Greece has required around $400-500 billion in bailouts and Italy’s economy is far bigger, by about an order of magnitude. Does anyone have $4-5 trillion lying around to spend on a nation that can’t get its political house in order? If you do, you’re a better man than I. But you shouldn’t be giving others false optimism when it doesn’t look like any nation’s electorate is willing to accept austerity at this time.
No, no, no; you hold out until 2013.
skicougar (Diary) Saturday, November 5th at 3:44PM EST (link)From financial armegeddon:
“PMI readings for the eurozone, China, and Japan, as well as the U.S., have been trending lower for months, and all are now below where they were when the 2007 recession began”
http://www.financialarmageddon.com/2011/11/all-fall-down.html
What has been happening the past month is just a reflex rally after FIVE months of declines that will most likely continue delicing after the holidays into a second recession.
Has employment picked up ? No, there are still stories of more layoffs and holday hire this year are expected to be less than last year and most of the GDP growth for the last quarter was to pay for the increasing energy and food prices.
I am sorry to be the bearer of bad news, but a 2012 recession is coming. I would not hold money in mutual funds again until fall 2012 or 2013.
Only way I don’t see a recession is if Quatative Easing 3 is announced.
Eat ‘em up Houston Cougars !
That's very possible, but...
kyle8 (Diary) Saturday, November 5th at 6:06PM EST (link)It would be a small recession, there is simply no big load of inventories (except housing of course). Businesses are already lean and full of cash, and there is lots of economic activity in other parts of the world.
“Nothing works like freedom, Nothing succeeds like liberty”
Kyle
Which parts?
nathanalbright (Diary) Saturday, November 5th at 10:08PM EST (link)Which parts of the world are there “lots of business activity” to prevent a double-dip recession here in the United States? Is it an unsustainable Chinese growth? Is it that robust post-earthquake/tsunami Japanese economy? What about the mighty economy of Thailand, a majority of whose industrial strength is being threatened by flooding in Bangkok and the surrounding areas (full disclosure: I’m in Northern Thailand). What about those robust European economies? Anyone?
And why is it that businesses are sitting on hordes of cash instead of investing it in capital improvements or new employees? Are they simply waiting on a regime change in DC with the assumption of a better regulatory climate before they start spending money? And if that is so, then wouldn’t genuine economic improvement (assuming there are no confiscatory moves for the government to tap into those cash reserves) have to await the resolution of political problems? If so, then we could expect a flat 2012 and (maybe) improvement starting in 2013, assuming all goes well.
I wish I could disagree
Valrobex (Diary) Saturday, November 5th at 11:54PM EST (link)with you, nathan, but I thought much the same while reading these postings. China has big problems of its own with all its internal bank debt and the world beginning to push back regarding China’s currency manipulations. Though Europe will most likely stop if China buys EU debt.
Kyle, I’d like to share your optimism but I suspect nathan is more accurate on what’s to come. Businesses are sitting on their cash because of lack of certainty and, let’s be honest – there’s just no good place to invest all that liquidity right now.
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When we commit our self to that which is greater than our self
We are Liberated — we are set Free.
When we commit our self to that which is less than our self
We become Slaves.
— Socrates
I wish I could disagree with me too...
nathanalbright (Diary) Saturday, November 5th at 11:58PM EST (link)N/t.
MF global and 600Trillion down the drain
lastgopinillinois (Diary) Saturday, November 5th at 11:39PM EST (link)and you think 2013 will be a really big growth year?
Just because the eurozone reached agreements doesn’t mean it is actually going to pan out. The hard work of the individual countries hasn’t even begun yet. I expect to see more rioting as governments begin to roll out their austerity plans. Will their measures be enough? How long will it take to return to fiscal sanity?
My money ain’t movin until meaningful Tax reform, regulatory reform, debt reduction measures, healthcare and banking repeals happen at a minimum.
In the beginning, God created earth to be an extension of his vast Kingdom and his LOVE was so great that he wanted to share it with man, whom he created in his own image and likeness and gave him free will.
To this very principal, the Founding Fathers of our nation decreed that freedom is a God-given in-alienable right of all the people.
Gee lastgopin...
Valrobex (Diary) Sunday, November 6th at 12:04AM EST (link)you sure want a lot for you to make an investment.
Good grief! You want ” Tax reform, regulatory reform, debt reduction measures, healthcare and banking repeals.” The next thing you’ll be asking for is a constitutional republic that operates on free market principles… The nerve of some people…. : >)
——————————————————————————————————————
When we commit our self to that which is greater than our self
We are Liberated — we are set Free.
When we commit our self to that which is less than our self
We become Slaves.
— Socrates
I did say at a minimum, didn't I ?
lastgopinillinois (Diary) Sunday, November 6th at 8:45PM EST (link)I lost $38,000 practically overnight in the crash of ’08 from my retirement savings accounts and those investments were in the conservative category (non-high risk).
I was counting on that money, knowing that social security is probably not going to be there for me 8 years from now.
I pulled everything out and put it all in money market or CD’s, but at least I am not losing any more money.
It is going to need to be a booming economy to coax me back to the market and even then I will still be watching it very closely.
In the beginning, God created earth to be an extension of his vast Kingdom and his LOVE was so great that he wanted to share it with man, whom he created in his own image and likeness and gave him free will.
To this very principal, the Founding Fathers of our nation decreed that freedom is a God-given in-alienable right of all the people.