Bummed!
I’m depressed.
I look at the economic state of the world and I’m bummed. Where’s the good news?
I’m an optimist by nature. And I believe that the only way to make money investing is to be an optimist. So my mood is not my usual state of mind.
The US and most of the developed world is bankrupt. The debt in the US and Europe and Japan has reached a point where the compounding of the interest means that there will never be a point where the debt is not growing. The only way for governments to get out of this mess is to hyper-inflate.
China is bankrupt too. The banking system is totally bankrupt. Kiss it goodbye!
Where is the growth going to come from? The US will provide some growth but not as much as the past. The debts are too high and taxes will be raising. Inflation kills an economy and that is coming in a year or two.
Europe and Japan are dying slowly. Their populations are declining so increasing economic growth can only really come from increased productivity. So look for almost no growth from here.
So that leaves China, India, and SE Asia. India will continue to grow but they need to open their economy more to get another boost. China will grow for a while but they are only a few years from starting to have a declining population as well as an explosion of old people. So they will be saving like crazy not spending like the government wants them to.
SE Asia lives off of China these days so they will follow China.
In the final analysis, I believe that human ingenuity will overcome all obstacles. Free people can accomplish anything! But the challenges over the coming 10 years will dwarf the challenges of the last 10 years.
I’m bummed!
Awe, Courtney, hang in there! There’s still optimism to be had…and money-making machines to be repaired!
Thanks!
Actually, I’m depressed about how the world is turning out. The good news is that I expect to make a lot of money from the turmoil!
Well, I’m listening. Teach me how to make money from all of this mess and I will feel better as well.
So explain something really obvious to me, Courtney. If so many nations are all so heavily indebted to each other, why can’t the debts cancel out?
Alas, most of the money is owed to individuals or private organizations. Not government to government. And the government debts don’t exactly cancel each other out. On top of that, all governments other than the US must take US debt as monetary reserves so they can expand their money supplies.
Thanks!
I recently read (Motley Fool? Economist?) that the “real” debt of the US (which includes both capital debt and interest, both in monetary and asset form) is quickly going to rise above some astronomical figure (122 Trillion comes to mind…). Can’t the damage be contained with drastic legislation between lending and borrowing countries? What about forgiving the interest, if not the debt principal?
The problem is that forgiving the interest and/or debt means that the lenders will go bankrupt whether they are private or public lenders!
I read Marty Schwartz’s book “Pit Bull” at your suggestion. It’s a great life story, the book goes way beyond dry investing advice. Two pieces of his advice stuck with me and seem appro at this time. 1) When you feel like puking, that’s the time to double down, and 2) Honor your stop losses.
No question!
I actually worked with Marty for 18 months! He is perhaps the best trader of all time!
Hi Courtney, looking forward for your post on your view about US credit rating downgrade.
Yes, I agree with Kurt. Pls teach us how to make money in this turmoil.
Maybe some new curtains would help??? Yours look a little sad… might be affecting you more than you think! LOL