Tuesday, July 7, 2009

Dr. Doom & Gloom or Sunny Bono

I don't know, but lately I just have been Dr. Doom & Gloom. I have been reading and studying experts about how to keep my money and investments safe during these shaky economic times we are seeing. You listen to me write a lot about how our government is making all the wrong moves with interfering with banks, businesses, wall street, automobiles, and now energy and health care. I truly believe we are going through an extraordinary time in the history of America. I have talked with friends, family, and even strangers and no one can talk me into believing that what our government is doing is going to help out. 

One side I have been studying is the Ron Paul, Peter Schiff, and Jim Rogers outlook. If you are a regular reader of this blog you will know their outlook and their beliefs in that we are going to see hyperinflation and they suggest purchasing gold. I have the most confidence in these guys and I am sure we will see inflation at some point over the next 3-6 years.

Another side I have been studying is Harry DentNick Guarino, and Joe Saluzzi who predict there is going to be another Great Depression and a run on the markets. Harry and Nick think that we are going through a deflationary period and that all the banks are completely broke. I agree with them as well that all the major financials are completely broke. If not, why would our government feel the need to step in and bail them out. Also, just wait till the commercial real estate bubble burst, we will be seeing more banks going under than we already are. They say, eventually it will all collapse and that is probably the case unless we go through a period of hyperinflation because of the government intervention.

I have also been been following a couple energy guys Chris Nelder and Gregor Macdonald that think we are going through a period of Inflation and Deflation. And I tell you what, these guys are thinkers and they factor in energy so I am not ignoring these guys for one second.

So as you can see I have no idea what to do. I think the best thing I can do is hedge against everything in hopes there is no big swing one way or another. I have been throwing around the idea of buying Gold, I just do not know enough about it. Also, lately I have been thinking of buying some shares of  SKF or FAZ (ETF's that shorts financials). I called a friend last night and talked to him about it and he doesn't like it because he thinks no matter how bad the shape of financials are, we do not know what the government is going to do which can ultimately effect the price of these. He mentioned SDS which is a ETF that shorts the S&P and he suggested that more so than the others. I would hedge by investing in money that I would be willing to lose if it did not work out.

As of right now I am still in limbo. I still have money going into my 401k, and Roth IRA. I am seriously thinking about pulling most of my money back into cash and let it sit on the sidelines if A) the market goes to 10,000 or B) if we are still stagnate mid to end of July. I think the market is going to take a long long time to correct itself and as long as the government is making moves I am going to be watching very carefully.

I do not suggest anyone follow my advice because I am forming my own opinion and even experts cannot agree on what is going to happen. How can I sit here though and post about how I think our government is going to do harm to our economy and personal finances without actually living by what I preach.

Again I am not making any drastic moves right now, and it could all change next week. I will keep you posted with the next moves I am going to be making.

Am I just over thinking? Should I be so concerned? What the hell do I do with my money? Who's right, inflation, deflation, or stagnation? Leave a comment

1 comment:

  1. MMS,
    I am kind of in the same boat as you. I'm wondering will the economy recover, or is all of this just a repeat of the multiple sequential crashes of the 1930's.

    I do know that everybody that was sitting on the sidelines for the last 6 months missed out on the recent stock market rally. But is it now overpriced?

    Every time I put my finger on the liquidate button I remind myself that timing the market would primarily consist of luck. If everything tanks, I will just have to "shrug" it off and buy more shares at even lower prices than March '09. Dollar-cost-averaging will have to be our savior if things go sour again, as well as intestinal fortitude.. LOL :)