Sunday, January 18, 2009
I was recently asked how it was that I knew to sell my house prior to the bursting of the housing bubble, why I sold out all my stock holdings in favor of gold and silver long before that was an obviously sensible move, and why I am convinced now that the recent actions by the Fed and the Treasury Department are likely to fail.
But most of all, how did I get it right, when so many others missed it entirely?
While I do root around in masses of complicated data, the answer to these questions is surprisingly simple: I trusted myself.
More specifically, I trusted myself enough that when I saw something that didn’t make sense, something that just “felt wrong,” I took actions accordingly.
It didn’t make sense to me that a nation could consume beyond its means forever.
I was stumped by how an economic system predicated on continual expansion of credit would make a graceful transition to a no-growth environment.
I didn’t understand how people making $50k per year could buy $500k houses with no money down and have any hope of paying that back.
The concept of turning a bunch of subprime loans into higher grade securities, while extracting money along the way, puzzled me deeply.
It didn’t seem possible to me that money could continue to expand faster than the economy, long-term.
My work and my passion are centered on helping you spot these same sorts of disconnects listed above, so that you can see things more clearly and with less confusion about the direction of things.
The key to navigating during moments when the dominant story is ‘wrong’ is to consciously block out the ‘programming’ that is constantly reinforcing the status quo and to examine each assertion made by authorities (and by advertising and journalists, and any and all experts, myself included) as though it were possibly a live hand grenade.
While you may ultimately end up agreeing with the assertion or claim, your first instinct should be one of suspicion. Often my first clue that I need to do more research into a particular assertion is simply a…