As we enter the second decade of this millennium we have to ask themselves if the fabric of reality hasn’t been torn and all of us are falling into an Alice in Wonderland type fantasy. We live in a world where the financial Mad Hatters who created the greatest financial collapse in history are put in charge of fixing the problem. Where a Nobel Peace Prize is given to someone who has done nothing to promote peace and uses the acceptance speech to justify new acts of war. A world where the loss of hundreds of thousands of jobs a month is good news demonstrating we are now in a recovery. Perhaps it is just that I am getting old and my mind just isn’t functioning correctly. Or maybe my eyesight is failing and I no longer see things clearly. Whatever it is, this world seems to be getting more bazarre by the day. If you share this concern you are probably asking yourself some of the same questions including what a sane person has to do to protect themselves financially in this environment.
It is the goal of this article to offer some insights, information and resources for understanding, protecting and developing your wealth in this crazy, financially dangerous period. This information is for educational purposes and you need to do your own due diligence prior to making any financial decisions. Blue print areas are links to important informational articles and videos.
Diagnosing The Situation
Prior to making any decisions regarding our current or future financial actions it helps to have a full understanding of what is happening around us and how these facts will affect these actions. Escape Artist Magazine has been a good source for information with a contrarian mindset that has been correct in highlighting many of the problems we now face long before they actually happened. Some articles penned in 2007 by this author are here, here and here. These articles specifically focused on understanding the trends, cycles and problems we face today. I encourage you to read this article written in December 2007 first and this one from April 2007 next. These will provide you with a basic foundation of where we still stand.
Where do we stand today? It is our belief (and others here, here and here) that the we are in the midst of a systemic collapse that will continue to progress over the coming years. The real estate crisis has morphed from a sub prime crisis to a Prime and Commercial crisis increasing in 2010 and 11. The banking crisis is far from over as the bad paper on their books has not disappeared but has only been papered over. There are still 600 trillion dollars in derivatives still floating around the financial universe and increasing as banks are already returning to their old ways. To top it all off, governments around the world are ramping up their deficit spending recklessly throwing good money borrowed from our grandchildren after bad. Worse yet, most of it is not even borrowed but created out of thin air and hidden from public view by the banking cartel known as the Fed.
Trust us we are professionals
To add confusion to the average investors life the same corporate propagandists who claim to have not seen the present crisis coming are now telling us it is over and the green shoots of prosperity are blooming. Sadly, many investors with herd mentality will fall victim to these same people who sold a Dot Com bubble that would reap 20% or more for years into the future, covered up Wall Street Brokerage’s fraudulent sales of loser stocks to uneducated investors, and pushed a speculative housing bubble based on real estate that would “always increase in value”. Today, these same people are encouraging investors to get back into the market even as large numbers of insiders sell out of the market and the S&P no longer publishes the P/E ratio which was 140 to 1 in September.
It is the opinion of this writer that one of the most dangerous things any investor can do is blindly trust any financial professional with their financial future. A great circus owner once said a sucker is born every minute. It is obvious the financial industry believes this and has proven it time and time again.
Future Considerations for Protecting and Building Wealth
So what is one to do in this crazy mixed up bazaar world we currently live in. Well, that depends on your unique situation. The one we all share is that we have to take control of our financial situation. Be the captain of our financial ship so to speak. The recent collapse of a majority of American’s portfolios should provide all of us with a perfect example of why every investor needs to be on top of their investments. To
We are all speculators now! It is important for all readers to understand that all investing at this time is speculation. Now this may shock some of you but this is the reality we face. Investors must speculate on how the massive debt, uncontrolled government spending, massive money printing and a collapsing global financial system will impact your future finances. No longer can the average investor place funds into paper assets and expect to make a reasonable profit in future of unknown inflation and dollar devaluation. This being the case, as an investor you need to think, research and act as a speculator.
The following four areas are important aspects required of any investor looking to protect and build their wealth portfolio.
Become a student of financial, geopolitical, and global trends
If you care about your financial health you must understand what is happening around you locally, regionally, and globally. You must take the time and make the effort to not only understand the financial and monetary systems, but also how these systems are affected by other geopolitical events. It is important to understand the role of the dollar in global trade, why there is an effort to remove this abused privilege, and what this will mean for the future financial health of every American. Investors seeking to create long-term wealth must have an understanding of geopolitical trends. Finally, it is important to be able to critically identify what information presented in the media and on the internet is correct and what is total propaganda.
Only by knowing these will you be able to make the important decisions the coming economic environment will require. Let’s look at an example. Several years ago, an associate called to ask my opinion on a move the bank in control of his family’s trust was about to make. Their recommendation was to place a large amount of money in Fannie Mae. This was after Fannie Mae had missed numerous quarterly reports and had hired 1500 outside auditors to try to figure out their books. He was able to squash the move that would have lost a great deal when the stock finally collapsed. Still the bank “managed” a 1.2 million dollar trust into a loss of 300k over 8 years.
Assess your current situation
Once a person understands the above, they can begin to make strategic assessments of their personal situation and how they fit into the financial world. This knowledge will allow investors to strategically position their portfolio’s into safe areas. It is paramount for all investors to do a complete assessment of where their assets are located, their income and investing abilities now and in the future, how changes in the economy will impact current investments, and future trends that can be taken advantage of in the future.
Define your objectives
Few individuals take the time and make the effort to specifically identify their investment objectives. In a culture that encourages immediate gratification and imposes financial policies that punish the saver, this should be no surprise. The recent financial collapse has whacked the proverbial board upside the heads of the entire Baby-Boomer generation who now realize how important it is to have realistic long-term financial objectives. Now, many of us are scrambling to make up for these lost financial years. As each of us have different goals and objectives for ourselves, each of us will have to sit down and chart out our own course in achieving them.
Identify strategic relationships and resources
Finally, it is important to understand how making your future financial journey alone may not only be necessarily, but in your best interest. Historically, the greatest wealth building system has been the family. This wisdom, lost in recent years will become important as we move into a new investing environment. Wealth, once primarily compiled in the developed countries, will be spread amongst a greater world population. With resources and wealth being limited, this will mean investors will need to be more strategic minded in creating and holding the wealth they do have.
Now is a good time to study how super rich families make and hold wealth. It is also worth considering how groups like Goldman Sachs consider themselves family and conspire together to become wealthier. Isn’t it time to do a little conspiring of your own?
2010 Predictions and Pontifications
What do we see as potential events of 2010? Below are some issues and concerns we foresee in the coming year. In addition to these, it is my belief we will see a major decline in the Stock Market with a good chance it could test or the lows of last year.
Commercial and housing real estate will continue collapsing
Continued financial failure of nations
The dollar will collapse into the 60’s on the dollar index
Expect more terror events such as the recent staged underwear bomber
Banks will fail at greater rates… Probable bank holiday?
Expect our Nobel Peace Prize winner to take us into new wars
Unemployment will continue in the double figures
Food prices will rise as shortages begin to show
Expect unrest in the USA
Future financial trends worth considering. We live in a world of almost 7 billion people and growing. It is a world in the midst of great change economically and geopolitically. Understanding these changes is the first step in positioning yourself to benefit by these trends. Some of these trends include natural resources and energy. We will discuss these further in future articles.
Tim Jacobson is the Trustee of the Intentional Living and Learning Centre, an Environmental Compliance Consultant serving business’ throughout California, and President of Strategic Environmental Solutions, Inc. To learn more about the projects and wealth building activities (conspiracies) we are involved in you can contact or visit us at firstname.lastname@example.org or www.intentionallivingcenter.com.