by
Adam Taggart
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Economy
Economy
by
charleshughsmith
Executive Summary
- Which coming developments we can predict with certainty
- Why the next crisis won't be like 2008
- Why what worked post-2008 won't work this time
- Where stocks and gold are headed
- Where to find safe haven for your investment capital
If you have not yet read The Great Market Tide Has Now Shifted To Risk-Off Assets, available free to all readers, please click here to read it first.
In Part 1, we reviewed the market’s risk-on, risk-off gyrations and laid out the case for long-term declines in confidence, political stability and profits. What does this new era of uncertainty mean for individual investors?
What’s Predictable?
We can start by asking—is there anything we can predict with any certainty?
I think we can very confidently predict that future central bank monetary policies will fail to generate sustainable growth or fix what’s broken in the global financial system.
I think we can predict that uncertainty will only increase with time rather than decrease. This rise of uncertainty will predictably lower the attractiveness of risk-on assets, other than as short-term speculative bets after some central banker issues yet another “whatever it takes” proclamation.
It’s also a pretty good bet that if central banks and states continue expanding credit/money that isn’t matched by a corresponding expansion of goods and services, the purchasing power of those currencies will decline.
We can very confidently predict that the authorities will continue to do more of what has failed spectacularly until they are removed from power or the system breaks down.
We can predict with some confidence that issuing more debt will provide little productive results.
I also think we can hazard a guess that the next financial crisis will be of a different sort than the 2008-09 Global Financial Meltdown.
Just as generals prepare to fight the last war, with predictably dismal results (unless the exact same war is replayed, which rarely seems to happen), central bankers are fully prepared to stave off a crisis like the one in 2008: a financial crisis that emerges from leveraged bets going bad in money-center investment banks.
My basic presumption is…
Investing For Crisis
PREVIEW by charleshughsmithExecutive Summary
- Which coming developments we can predict with certainty
- Why the next crisis won't be like 2008
- Why what worked post-2008 won't work this time
- Where stocks and gold are headed
- Where to find safe haven for your investment capital
If you have not yet read The Great Market Tide Has Now Shifted To Risk-Off Assets, available free to all readers, please click here to read it first.
In Part 1, we reviewed the market’s risk-on, risk-off gyrations and laid out the case for long-term declines in confidence, political stability and profits. What does this new era of uncertainty mean for individual investors?
What’s Predictable?
We can start by asking—is there anything we can predict with any certainty?
I think we can very confidently predict that future central bank monetary policies will fail to generate sustainable growth or fix what’s broken in the global financial system.
I think we can predict that uncertainty will only increase with time rather than decrease. This rise of uncertainty will predictably lower the attractiveness of risk-on assets, other than as short-term speculative bets after some central banker issues yet another “whatever it takes” proclamation.
It’s also a pretty good bet that if central banks and states continue expanding credit/money that isn’t matched by a corresponding expansion of goods and services, the purchasing power of those currencies will decline.
We can very confidently predict that the authorities will continue to do more of what has failed spectacularly until they are removed from power or the system breaks down.
We can predict with some confidence that issuing more debt will provide little productive results.
I also think we can hazard a guess that the next financial crisis will be of a different sort than the 2008-09 Global Financial Meltdown.
Just as generals prepare to fight the last war, with predictably dismal results (unless the exact same war is replayed, which rarely seems to happen), central bankers are fully prepared to stave off a crisis like the one in 2008: a financial crisis that emerges from leveraged bets going bad in money-center investment banks.
My basic presumption is…
by
JW
by
Adam Taggart
Executive Summary
If you have not yet read Part 1: Fortunes Will Be Made & Lost When Capital Flees To Safety available free to all readers, please click here to read it first.
So, given the conclusions in Part 1 — as well as the larger risks to the economy and financial markets that we analyze daily here at Peak Prosperity — how am I positioning my own personal investments?
I get asked this question often. Often enough that I'm deciding to open the kimono here and let it drop to the ground. Everyone interested to look will get the full frontal.
Before I do though, let me make a few things absolutely clear. This is NOT personal financial advice. The investment choices I've made are based on my own unique situation, financial goals and risk tolerance. And I may change these choices at any moment given new market developments. What's appropriate for me may not be for you, so DO NOT blindly duplicate what I'm doing.
As always, we recommend working with a professional financial adviser to build an investment plan customized to your own needs and objectives. (If you do not have a financial adviser or do not feel comfortable with your current adviser's expertise in the market risks we discuss here at PeakProsperity.com, consider scheduling a free consultation with our endorsed adviser)
Suffice it to say, any investment ideas sparked by this report should be reviewed with your financial adviser before taking any action. Am I being excessively repetitive here in order to drive this point home? Good…
OK, with that out of the way, let's get started. I'll walk through the asset classes I own and my rationale for holding each.
The strategy behind my portfolio allocation is of my own devise, though it has been influenced in no small part by the good folks at New Harbor Financial, Peak Prosperity's aforementioned endorsed financial adviser.
At a high level, it has been constructed to address my strongly-held conclusions that:
- Prices of most asset classes are dangerously overvalued
- The risk of another economic contraction on par with (or greater than) the Great Recession within the next 2-4 years is uncomfortably high
- The most likely path is we will experience a short period of coming deflation, followed soon after by one of high inflation as central banks starting printing currency without restraint (the Ka-POOM theory)
- Capital will increasingly want to flow from paper assets (tertiary wealth) into tangible ones (primary and secondary wealth)
- This is a time to prioritize protecting capital (defense) over speculating on how to grow it (offense)
- Diversification is wise: just be emotionally prepared that some of your bets, by definition, will not pay off
- In today's world of financial repression, no asset class is truly "safe". As such, asset performance is all relative.
This is not a swing-for-the-fences portfolio. It's much more of a prepare-for-the-storm approach…
How My Personal Portfolio Is Positioned Right Now
PREVIEW by Adam TaggartExecutive Summary
If you have not yet read Part 1: Fortunes Will Be Made & Lost When Capital Flees To Safety available free to all readers, please click here to read it first.
So, given the conclusions in Part 1 — as well as the larger risks to the economy and financial markets that we analyze daily here at Peak Prosperity — how am I positioning my own personal investments?
I get asked this question often. Often enough that I'm deciding to open the kimono here and let it drop to the ground. Everyone interested to look will get the full frontal.
Before I do though, let me make a few things absolutely clear. This is NOT personal financial advice. The investment choices I've made are based on my own unique situation, financial goals and risk tolerance. And I may change these choices at any moment given new market developments. What's appropriate for me may not be for you, so DO NOT blindly duplicate what I'm doing.
As always, we recommend working with a professional financial adviser to build an investment plan customized to your own needs and objectives. (If you do not have a financial adviser or do not feel comfortable with your current adviser's expertise in the market risks we discuss here at PeakProsperity.com, consider scheduling a free consultation with our endorsed adviser)
Suffice it to say, any investment ideas sparked by this report should be reviewed with your financial adviser before taking any action. Am I being excessively repetitive here in order to drive this point home? Good…
OK, with that out of the way, let's get started. I'll walk through the asset classes I own and my rationale for holding each.
The strategy behind my portfolio allocation is of my own devise, though it has been influenced in no small part by the good folks at New Harbor Financial, Peak Prosperity's aforementioned endorsed financial adviser.
At a high level, it has been constructed to address my strongly-held conclusions that:
- Prices of most asset classes are dangerously overvalued
- The risk of another economic contraction on par with (or greater than) the Great Recession within the next 2-4 years is uncomfortably high
- The most likely path is we will experience a short period of coming deflation, followed soon after by one of high inflation as central banks starting printing currency without restraint (the Ka-POOM theory)
- Capital will increasingly want to flow from paper assets (tertiary wealth) into tangible ones (primary and secondary wealth)
- This is a time to prioritize protecting capital (defense) over speculating on how to grow it (offense)
- Diversification is wise: just be emotionally prepared that some of your bets, by definition, will not pay off
- In today's world of financial repression, no asset class is truly "safe". As such, asset performance is all relative.
This is not a swing-for-the-fences portfolio. It's much more of a prepare-for-the-storm approach…
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