By
Monty Pelerin, posted February 12th, 2010 http://www.economicnoise.com/2010/02/12/martensons-forecast-for-how-this-ends/
For investors or just curiosity-seekers, how we escape from the economic mess is of interest. Jim Puplava
at FinancialSense.com stated: “I believe that getting the
inflation/deflation story right is the single-most important investment
decision that needs to be made. It will determine the investment
outcome of portfolios over the next decade.”
Investments that might be expected to do well in a deflationary
environment will do poorly in an inflationary environment and vice
versa. Thus, a reasoned determination of what lies ahead is critical
for investing success. That determination and flexibility in case your
judgment proves incorrect will be important to investment outcomes. For
most investors, “buy and hold” should be considered dead. Arguably that
determination should have been made a few years ago.
While no one can foresee the future, Chris Martenson has been more
prescient than most. He presents a logical case for what is likely to
happen below.
Wednesday, February 10, 2010, 8:42 pm, by cmartenson
I was asked to write a once-a-month Market Observation for Financial Sense. Here’s the first one (posted today, Feb 10):
From time to time, I think it’s a good idea to stop squinting at
the short-term market wiggles and pull our heads back for a wide-angle
view. Now would be a good time, so that’s what we’re going to do. For
the record, I also happen to believe that close-up market analysis
loses some of its potency during times of immense official
intervention. As with any subsidy program, prices become distorted and
often fail to tell the real story, which is absolutely true with
respect to interest rates and, by extension, the risk premium for
stocks.
Back to the story. Where the current crisis has been described
using millions of words in thousands of articles packed with arcane
acronyms (such as TALF, CDO, and CMBS), perplexing regulatory lapses
and with a degree of complexity that dwarfs the Apollo moon mission, I
can explain why the whole thing happened using just three words.
Too. Much. Debt.
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