October 14, 2010

Warning: Sudden Drop Ahead - Extreme Caution

By the end of what lies just around the next bend in the road, most everyone will no doubt wish that such a sign had been posted beforehand. Yet, despite the 'blind leading the blind' outlook exhibited by the authorities of the day, the signs are all around us once we take a candid look. As one enlightened writer puts it in the article 'hot-linked' below, we are about to emerge from the eye of the hurricane that has lulled most commentators into a false sense of serenity and optimism for most of 2010. The year that follows will almost certainly usher in the next stage of a catastrophic downturn and worldwide depression, the likes of which have not been felt by humankind for at least 300 years or longer. Business failures, unemployment levels and mortgage foreclosures will all rise to levels far in excess of a pessimist's most colorful nightmare. The crime wave that follows will overwhelm the prison systems, which will eventually be only capable of housing the most serious criminals. Services will decline to their lowest ebb as states and municipalities struggle to cope with lower tax collections and long-term layoff payouts.

Even among the few who have a better understanding of what still lies ahead, there are misconceptions surrounding the the specific dangers. Like those who foresee rampant  inflation as the coming bogeyman, still fighting yesterday's battles. In reality though his bigger & vastly more powerful brother, DEFLATION will be wielding the 'big stick' this time around - the many bubbles of this era must first go pop and fizzle out.

After a brief, sharp correction in this latest stock-market rally-back that may start as early as this week and go for at least a couple of weeks, there will likely be a final surge that lasts until some time in the first quarter, though a January top seems most likely at this time for the Dow. Following soon after will be a sustained decline in, first stocks and other financial instruments, to be soon followed by a general & widespread decline in the economy  world-wide! The decline will be severe in both degree as well as duration, this segment lasting at least two full years. For those who have 'ears', please note that this may well be the last opportunity to exit speculative investments and put your 'house' in order.

Doug Casey on the Violence of the Storm, the Destruction of the Middle Class and the Coming Gold Standard

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