CAUTION…!

10 februari, 2010 | door MHAAGEN |

VOORZICHTIG !, waarschuwt Martin D. Weiss, Ph.D., van Weiss Money Management.  Hij blikt terug op de voorbij Kredietcrisis (die dus niét voorbij is !) en welke schade er tot nu toe al werd aangericht.

Battle #3 was the monster born from the ashes of Battle #2:
The Fed’s response to the Tech Wreck created the Housing Bubble, which, in turn, spawned the Housing Bust.

And alas, the losses resulting from the Housing Bust of 2007-2009 were 2.4 times greater than the losses from the Tech Wreck of 2000-2002.

According to recently released Fed data, even excluding the early real estate losses of 2007, the Housing Bust caused U.S. households …

• Losses of $6.0 trillion in real estate
• Losses of $4.4 trillion in stocks
• Losses of $1.5 trillion in mutual funds, and
• Losses of $3.6 trillion in life insurance and pension fund reserves

Total Housing Bust losses: $15.5 trillion. (For the proof, click here.)

Combined losses suffered during the Tech Wreck and the Housing Bust: $22.1 trillion.

Yet now, under a new administration, the bailout brigades are up to their old tricks.

For a third time, they’ve retaliated with easy-money fire hoses, this time driving short-term interest rates to practically ZERO.

For a third time, they’ve deployed bigger guns. This time, with bailouts and stimulus that add up to 30 percent of GDP — TEN times more than the average of all prior postwar recessions.

And again, they’ve had the audacity to declare “victory” … to say that the “crisis is over” … and proclaim that the “recovery is sustainable.”

Inevitable result: Another gigantic bubble, another bust, and another round of devastating losses — this time in sovereign government debt (e.g., Treasury bonds).

This is why the collapses of sovereign debt markets in Greece, Spain, and Portugal are so alarming. (See “The Next Contagion.”)

And this is why the Obama budget — including an astonishing $1.6 trillion deficit in the current fiscal year — is so dangerous.

My recommendations are unchanged:

Avoid all long-term bonds, whether issued by federal governments, private corporations, or municipalities.

Approach all stock investments with great CAUTION — tight stop losses, plenty of cash, and solid hedges.

Above all, do not fall for this new deception. Keep your money safe. Make sure you’re not engulfed in the next round of collateral damage.

Good luck and God bless!

Martin