I am sure most here are aware the Federal Reserve is getting ready to start quantitative easing part 2.I am going to share my opinion on the results of this.
All asset classes but treasure notes will increase in value.
Let me explain.Stocks will only increase in value because they are priced in dollars.You lower the value of your currency and the same stock is worth more.So fully expect all US based stock exchanges to go on a tear to the upside.There is a slight chance of some downward pressure as other countries(EU specifically)seem to think printing unlimited amounts of money is a good idea as well.So expect actual company performance and profit to be nearly meaningless as we end 2010.Stocks will go up.
Gold and silver.These are of course at record levels.Gold at all time highs and silver at over 30 year highs.The reason is inflation and a flight to the only asset class(precious metals)that will increase in value with little down side risk during inflation.You can hold Gold or silver long term at this point.I like silver more,but both have some advantages.
Last lets talk about QE2.It will make some quite wealthy,but it will not solve a single problem.There will still be high unemployment and a general loss of purchasing power across the US economy.So what then? My guess is after the elections they will create some type of super stimulus or national jobs program to try and reverse the decline of America.This later program will be self destructive.More printing of dollars,and yet a further decline in purchasing power for American consumers.I expect this to happen some time after the Christmas quarter comes in worse than expected.
So what then are we to do?Well we are not going to change Washington at this point.The Republicans will win the election,that is almost a given as Americans are sick of the way things are going.What most do not realize is they are running for more of the same,not real change.Why repeal and REPLACE the health care bill.Why not just repeal?That is another matter.I guess my point is this.If you have money in stocks let it ride until the elections(maybe a few days before)and then pull it out.Get physical silver and gold.Spend money on large purchases now,your buying power can only decrease from this point forward.Prepare for a huge increase in unemployment and inflation,possibly the collapse of the dollar.In short prep.If you have never done so now is the time.This is most likely your last chance to be able to afford it.Would you buy extra food and supplies(think soap,TP,ect...)if you knew in a very short time the cost was going to be 15-30% more?The Fed is telling you exactly that.They are not going to let stocks fall,and have stated publicly and often the last few weeks they will do anything in there power to assure they don't.IE print more money.
If you want to make a large purchase,now is defiantly the time to do so.Preserve your wealth.Cash is in a death spiral.TIPS are the only type of bond or note I would even think of purchasing as they are protected to a degree from inflation.Enjoy the run up in stocks,but have a set date to get out.Switch the way you think.You can not think about building wealth long term right now.You MUST think about preserving what you do have.
All asset classes but treasure notes will increase in value.
Let me explain.Stocks will only increase in value because they are priced in dollars.You lower the value of your currency and the same stock is worth more.So fully expect all US based stock exchanges to go on a tear to the upside.There is a slight chance of some downward pressure as other countries(EU specifically)seem to think printing unlimited amounts of money is a good idea as well.So expect actual company performance and profit to be nearly meaningless as we end 2010.Stocks will go up.
Gold and silver.These are of course at record levels.Gold at all time highs and silver at over 30 year highs.The reason is inflation and a flight to the only asset class(precious metals)that will increase in value with little down side risk during inflation.You can hold Gold or silver long term at this point.I like silver more,but both have some advantages.
Last lets talk about QE2.It will make some quite wealthy,but it will not solve a single problem.There will still be high unemployment and a general loss of purchasing power across the US economy.So what then? My guess is after the elections they will create some type of super stimulus or national jobs program to try and reverse the decline of America.This later program will be self destructive.More printing of dollars,and yet a further decline in purchasing power for American consumers.I expect this to happen some time after the Christmas quarter comes in worse than expected.
So what then are we to do?Well we are not going to change Washington at this point.The Republicans will win the election,that is almost a given as Americans are sick of the way things are going.What most do not realize is they are running for more of the same,not real change.Why repeal and REPLACE the health care bill.Why not just repeal?That is another matter.I guess my point is this.If you have money in stocks let it ride until the elections(maybe a few days before)and then pull it out.Get physical silver and gold.Spend money on large purchases now,your buying power can only decrease from this point forward.Prepare for a huge increase in unemployment and inflation,possibly the collapse of the dollar.In short prep.If you have never done so now is the time.This is most likely your last chance to be able to afford it.Would you buy extra food and supplies(think soap,TP,ect...)if you knew in a very short time the cost was going to be 15-30% more?The Fed is telling you exactly that.They are not going to let stocks fall,and have stated publicly and often the last few weeks they will do anything in there power to assure they don't.IE print more money.
If you want to make a large purchase,now is defiantly the time to do so.Preserve your wealth.Cash is in a death spiral.TIPS are the only type of bond or note I would even think of purchasing as they are protected to a degree from inflation.Enjoy the run up in stocks,but have a set date to get out.Switch the way you think.You can not think about building wealth long term right now.You MUST think about preserving what you do have.
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