Monday, December 22nd, 2014

Mini-Thoughts: Main Street Investors Beware

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I’m sure everybody is a little anxious with the way the economy is behaving lately. A few  of you might be looking for some guidance from some well known financial expert on television, internet and newspaper about what to do next like Jim Cramer or the Fast Money talking heads on CNBC. You should practice some caution before buying into advice of some so called “expert” like Cramer. This is the same man that told everyone not to sell Bear Stearns before it collapse. I wonder how many people lost their fortune listening to that man. He also knew a few of the Bear Stearns executives so I am skeptical that he did not see the collapse in the near future at that time.

We have a few market technicians like Robert Prechter (also a deflationist) who called for the collapse of the gold market during the summer of 2010 when gold was around $1100 and it is now hovering around $1300! I wonder how many traders lucked out by listening to this man time the metal market when his track history is poor! We have a few well respected economists like Marc Faber, Jim Rogers and Peter Schiff who called for the collapse of the housing market and the rise of gold and silver. These three men track record for predicting the next move in the economy has been outstanding lately but I’m sure they have been wrong about a few things in the past as well.

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The point I am trying to make is that these expert can be totally wrong about their prediction or their timing could be off. Either way, you should take their advice with a grain of salt. The deflationist like Prechter and other Mixed Model Theory believers believe the market will crash back to the 1930′s depression level because the money supply is decreasing, the banks are not lending and unemployment is still high. They believe that you are better off staying away from the stock market and holding the cash in your bank account. By the way, if the market does crash and fall down to the 1930′s level, what make the deflationist think their cash in the bank account will be safe when you have banks that will go bankrupt and no one will be able to withdraw their money? I do not believe they thought this through yet.

The inflationists think the S & P will go to 50,000 point because the Federal Reserve will just inflate the economy by printing Dollars. Also, other inflationist believe the market will react rationally and crash when the Federal Reserve perform quantitative easing because they do not believe the market will “take the bait” and assume the economy will recover.

You should study the indicators in this economy and research all experts before buying into their prediction. You are better off drawing your own conclusion rather than risking your financial future in the hands of the experts because one side will be wrong while the other side will be right. Their motives can also be a conflict of interest so Main Street Investors Beware!!!

Here are a few more predictions I found on the internet over the last 10 month.

George Soros: Gold is The Ultimate Bubble

Prediction 2010: Stock Market and Economy

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