Friday, October 19, 2007
Executive Summary
- It’s not over; the trouble has only just begun
- Look out – inflation is coming!
- The Fed cuts rates, bails out big banks
- Inflation set to rip
- Oil
- Oh, the dollar!
- August TIC data and the dollar
- Bank runs in the US and England, and a failure in Germany
- Uh oh – derivatives
Last time I wrote that the game is afoot. Boy, is it ever. This past month, while the stock market bizarrely hovered near all-time highs (more on that later), the credit markets slipped into even deeper disarray (an understatement) and commodities became pricier (a severe understatement). As always, my primary goal here is to help you understand what’s going on, and that it’s all a matter of policy, not accident. Bad policy, perhaps, but policy nonetheless. My secondary goal is to connect the dots and provide you with a source of news aggregation you can trust.
To begin, let’s review my most recent recommendations from my August 30th newsletter:
- Get out of debt, especially variable rate debt such as credit cards and any adjustable rate loans. If I’m right about the dollar, vastly higher interest rates are on the way.
- Get some exposure to assets that tend to vary inversely with the dollar. Gold, silver, oil, natural gas, and foreign currencies are my favorites.
- Build up some cash reserves (savings) to get you through a potentially severe recession.
- Be prepared for a serious decline in equity and bond values.
I stand
by cmartenson 
