The ECRI (Economic Cycle Research Institute) is predicting that we are in for a second dip of recession. These guys get it right...the Federal agencies get it wrong because they are stuck in the "Wishful Thinking/Politically Clouded" mode. This is an eye opening site for you to read...could be wrong...but I don't think so. http://www.marketwatch.com/story/whos-right-about-recession-wall-street-or-ecri-2011-10-20
So, what can you do to insulate yourself from this downturn? The stock market is going to take another dip and stay down for a while. This economy/stock market depends on growth of business activity...not just maintaining business activity. Somewhere in between growth and contraction is where we will find ourselves and things will slow down for a while. Ben Bernanke is already talking about printing more money. When he prints money, buying our bonds, our money loses value. The Chinese stopped buying our bonds recently. So, WE will buy enough of them with printed money to keep the price up. That's inflation, pure and simple. More to come on that.
For those who haven't figured it out, our government only takes in about 1/2 of the dollars it needs to spend through "taxes". The rest it gets by selling bonds. When Uncle Sam offers 2 Billion dollars worth of bonds and the demand is there...it gets a pretty good price for them. That's a low "yield" for investors. When demand is down, Uncle Sam then has to lower the price, making the interest rate paid on them more attractive to the buyers...that's " higher yield".
Wall Street will finally acknowledge that we are in a recession a year or more after it has begun...after they have adjusted their investments to benefit from the retraction. That's one way they have managed to accumulate the majority of the wealth in this country. They are playing a step or two ahead of us...the people who have placed our money in pensions, insurance funds, and equities/stocks.
If your 401k is in equities at all it may be time now or at least soon to move them into a fund that is not subject to turns in the stock market. You will still make interest on your money...you just won't be in the market. Read the article and make up your own mind. But please, don't let Wall Street and the "what I call the drunken car salesmen in the big (too big to fail) banks" take your retirement gains again. The idea of making a killing in equities is a suckers bet. They want you to believe in them...and they really are not an honest lot. They really are not.
So, what can you do to insulate yourself from this downturn? The stock market is going to take another dip and stay down for a while. This economy/stock market depends on growth of business activity...not just maintaining business activity. Somewhere in between growth and contraction is where we will find ourselves and things will slow down for a while. Ben Bernanke is already talking about printing more money. When he prints money, buying our bonds, our money loses value. The Chinese stopped buying our bonds recently. So, WE will buy enough of them with printed money to keep the price up. That's inflation, pure and simple. More to come on that.
For those who haven't figured it out, our government only takes in about 1/2 of the dollars it needs to spend through "taxes". The rest it gets by selling bonds. When Uncle Sam offers 2 Billion dollars worth of bonds and the demand is there...it gets a pretty good price for them. That's a low "yield" for investors. When demand is down, Uncle Sam then has to lower the price, making the interest rate paid on them more attractive to the buyers...that's " higher yield".
Wall Street will finally acknowledge that we are in a recession a year or more after it has begun...after they have adjusted their investments to benefit from the retraction. That's one way they have managed to accumulate the majority of the wealth in this country. They are playing a step or two ahead of us...the people who have placed our money in pensions, insurance funds, and equities/stocks.
If your 401k is in equities at all it may be time now or at least soon to move them into a fund that is not subject to turns in the stock market. You will still make interest on your money...you just won't be in the market. Read the article and make up your own mind. But please, don't let Wall Street and the "what I call the drunken car salesmen in the big (too big to fail) banks" take your retirement gains again. The idea of making a killing in equities is a suckers bet. They want you to believe in them...and they really are not an honest lot. They really are not.
