Our rather pessimistic articles of late on the lodging bubble, the baleful warnings from a long listing of fiscal experts and their suggestions on how to best endure the at hand fiscal hurricane have got been refuted by none other than the well read writer of our "Crazy Man" articles (see "A Crazy Man's Harangue or Right On? You be the Judge" and "Crazy Man's Harangue - He's Crazy Like a Fox!") who sees things completely differently. Who is right - the ageless optimist with a different return on the economical environment or the large bad bears? Below are his comments.
"I have got been beset, of late, by a figure of anomalousnesses in what I read and cognize about the economical system and how they interpret into an at hand lodging collapse and how those linkages to other major sections of the economic system would do general economic bedlam.
Be that as it may, I am convinced that we are in the early phases of a multi-year secular trade goodss bull market.
I am equally convinced of "peak oil" and the virtues of energy investings whether they be for grounds of supply, geopolitical or for environmental reasons.
I am also convinced of the big and continuing incremental demand for alkali metallic elements and other trade goodss by the growth economic systems of Asia centered around People'S Republic Of China and India.
And, finally, I am totally convinced that this demand for alkali metallic elements and other trade goodss will go on to intensify even if recession goes the order of the twenty-four hours in the United States and other developed western economic systems because of the detonation of nest egg and demand by the growth center social class of Asia.
I am puzzled, however, as to why you are so convinced that lodging demand and terms are on the threshold of tanking.
As I see it the recent addition in short term involvement rates are not that unsettling (John Mauldin, in his most recent article entitled 'When Volition the Federal Stop?' back ups my contention devising the point that from an historical footing the Federal finances charge per unit is not that high given the fact that from 1946 through 2000 the median value Federal monetary fund charge per unit was over 6% and yet the U.S. economic system grew rapidly during that period) and the almost permanently unchanging longer term involvement rates go on to do lodging a tremendously low-cost proposition. In addition, institutional loaners go on to flex over backwards to suit buyers.
Your "Our Worst Nightmare" articles on the lodging marketplace (see "Our Worst Nightmare - The Puncture of the Current United States Housing Bubble" and "Our Worst Nightmare - The Bubble Have Burst") are ballyhoo artist and misleading. Housing is a difficult commodity. It is real, concrete, can be seen and used. Compared to paper representing chemical bonds and equity shares, it is tangible just as all other trade goodss are. So if we are really in a trade goods secular bull cycle, why should we desperation over the recommended at hand collapse of the lodging market? Where is the nightmare? Moreover, if the Federal goes on to be accommodative in footing of money supply, involvement rates and recognition generally, why should the floaty lodging marketplace autumn apart prompting all the other elements of the economic system dependent upon it to make the same? Again Iodine ask: where is the nightmare?
As I see it, functionary employment figs bespeak a strong economic system and the consumer price index index is not in the least inflationary. Also, studies of consumer and manufacturer assurance base almost at multi-year highs. Knowing that Henry Martin Robert Prechter preaches that public mental attitudes and societal temper Pb to behaviour and activity - not the other manner around as we almost all believe - this public optimism portends well for a continuance of the current economical reality. With an always accommodating Federal policy of M3 yearly growing in the money supply of almost 10 percent, all should be sugariness and visible light for continuing consumer led demand and economical growth. As I see it, all your 'ominous warnings and desperate predictions' are also manner off alkali and are alarmist at best.
You travel on and on in your "Ominous Warnings and Desperate Predictions" articles (see "Ominous Warnings and Desperate Predictions of the World's Financial Experts Part 1 and 2 of a 6 portion series) about all sorts of things but:
a) neglect to turn to why so many people are so optimistic given the obvious inflationary effects of growing in the money supply, bubble-like housing terms and a loss of affordability because of rising house prices.
b) neglect to show concern that functionary Numbers relating to the Consumer Price Index, unemployment, gross domestic product and other measurements of economical world are largely fake and
c) fail, most importantly, to advert the unfunded liabilities of Sociable Security IOU's, Medicaid, Medicare and its new drug plan, Freddie and Fannie Mae and the Pension Guarantee Corporation which purportedly backstops underfunded private and public sector defined benefit pension plans.
Now I may be talking out of both sides of my oral cavity here but I also experience strongly that this lengthening listing of economical basics are, indeed, alarming and can not go on indefinitely without a blow up. Politicians and cardinal bankers along with their cheerleaders in the brokerage, banking and common monetary fund industries, assisted by a largely nescient and blameworthy popular news media, will, however, make their best to go forth the toiling multitude largely nescient of economical worlds for as long as possible.
Inevitably though, when the 'dam breaks' or the 'deck of cards' collapses, it will be speedy and black in its magnitude and impact. That is why I am well positioned in cherished metallic elements (gold and Ag bullion, excavation company shares and some well placed long term cherished metallic elements warrants to harvest the major benefits of purchase these assets go on to give my portfolio) but somewhat less so in alkali metallic elements and energy. That is my comfortableness zone which lets me to kip soundly because it is the best manner to protect my difficult earned equity and boom from the radioactive dust of the approaching fiscal collapse. The lone thing I make not cognize is the extent of this hereafter fiscal disruption or its timing. What the heck, life wouldn't be very interesting if we could foretell the hereafter with absolute certainty, now would it?
For what it is worth, and I have got been laughing all the manner to the depository financial institution of late, I believe we are in a echt trade goodss bull marketplace and, as such, see no demand to pass much clip paying attending to the day-to-day ebb aways and flowings of the marketplace for these investments. I have got done my research and analysis and taken a position. I periodically reexamine the public presentation of my investments, mulct melody them on juncture and then acquire on with my life confident that the marketplaces will develop as we cognize they are destined to with our assets safe and growing. If there is a financial hurricane approaching as you propose I am confident my portfolio is secure. (See "Warning! Fiscal Hurricane Approaching! Are Your Portfolio Secure?").
Call this the criterion 'buy and hold' attack if you will, but it isn't. Traditional bargain and throw investment do a juju out of per centum plus allotment between marketplace sectors, pillory and bonds, picking individual stock victors and pruning also-rans all in the name of 'balance and diversification.' Lighten up and bask the trade goodss ride."
The underside line decision looks to be for investors to strategically place themselves in a broad assortment of assets including cherished metals, excavation shares and long-term warrants.
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