Global Economy; The Start Of The Collapse…

I’m sorry to say that I saw this coming, like dominoes we will see all markets starting to collapse. I’ve had people ask me if it was safe to invest in other foreign markets, my answer to them has been no. I wish I would have posted this instead of talking just talking about it to several people. My hope is that none of you pulled your money out of the stock market, and put it into another market. I did warn about the domino effect in an earlier post. But I wish I would have addressed this directly in a separate post since so many people seemed confused about this issue.

A friend told me that his financial adviser said a few conventional things (after he told his advisor my predictions). 1) Not much happens historically in the market place in December and 2) Over time the market will rectify itself. But we will not see anything conventional over the next couple of years, this is the problem with listening solely to financial adviser types. You must trust your own intuition, but not your fear. 

In my friend’s case, he has enough diversity and time on his side that even if 75% of all the stocks he owned went belly up he’d be OK. He wouldn’t go broke. He wouldn’t really gain anything though. We are all in a quandary as to where to put our money. I’ve been asked that question a lot. Should you hide cash in your house? Will the FDIC fail? Is there anything really safe?

The sad answer to this is, not really, nothing is safe right now. The safest thing is an FDIC account, however if your bank goes under it may take awhile for you to get your money. But keeping large amounts of cash in your house is not a good idea for obvious reasons. Another friend asked if real estate investing was a good way to go. Well, not right now because it will be a liability. If people can’t afford to pay rent then you still have to pay the mortgage and the taxes and the upkeep. 

So for now. I’d say, try not to freak out. Just keep your money in a safe conservative bank. Maybe some extra cash on hand, nothing crazy though, some extra food, water and necessities and save your money. Things will get better once Obama takes office. Things won’t turn around overnight, but plans will be put in place, action will be taken to save the middle class. This I see so clearly. And this will start the turn around. And with that there will be more hope, more confidence and things will start to move (slowly) toward the America we’ve known so far. But hold onto your hats for awhile things are going to get really scary before they get better. And don’t invest in anything right now! If you’re still in the market, it maybe too late to get out without losing, so use your best intuitive judgement there. 

Just remember, things will get better, we’ll get through this. Make sure to be active in politics. Those of us who couldn’t understand how politics directly effected us will see exactly how it does. It’s important for us as citizens to stay informed and participate.

Best wishes and good luck. 

PS. Remember don’t let fear get the better of you. You will be seeing some very scary things, and as I said in an earlier post late December something very mind boggling is going to happen in regards to the market. But, we will be OK. I feel the country turning toward the light. It will ultimately be OK. We’ll have some trouble for awhile, but hold tight and save, save, SAVE!

Blessings to you.

Saving the Economy…

As I said in an earlier post we are seeing the tip of the iceberg in terms of the financial crisis. I was heartened to hear that congress was working in bipartisan fashion to solve this problem. Obviously, the Bush administrations plan of no oversight is not a good idea, but we do need to do something about this impending disaster.

But my panic light went on today when talks broke down after McCain showed up, not that he was solely responsible, but he did use the crisis to try to look like a hero when he clearly doesn’t have any answers or even knowledge of what’s going on. As I said in an earlier post McCain would plunge this country and the world into the worst depression ever (based on his aspects to the Dow Jones, and of course now that the world is interlinked all the markets would crash) and this couldn’t be more illuminated in just his slightest touch of involvement unraveling the talks. According to reports coming out McCain had nothing to say at the meeting, but obviously tried to use it politically.

And by the way the Republicans have caused this mess — a free market without rules isn’t free. Deregulation is what caused this. Deregulation or no regulation is China’s case has doesn’t work. We put regulations in place for formula after babies started dying when formula companies watered milk down. Babies died of malnutrition in this country, the US. This is exactly what happened in China just recently, but instead of water they used melamine to try to falsely boost the protein levels in tests.

Regulations are laws — like us the normal everyday citizens have to abide by, such as you can’t kill, steal or rape someone. No regulation is akin to abolishing punishment for criminals. Companies policing themselves has never worked, because it is not in their best interest, as we are seeing in this banking debacle.

So all of you who think the market will correct itself, that deregulation is good for the economy — here’s the result: global DEPRESSION! It may have worked in the short term for companys to be able to gobble each other up. We’ve seen the melt down of the music industry partially from this cannibalistic approach. That’s a whole other story and another article if anyone is interested.

But its safe to say cutting off all the arteries to your heart will eventually kill you.