Friday, October 3, 2008
Introduction
Everything that I have been writing about, everything that I have been lecturing about, and everything that I made the Crash Course about is now in motion.
It is here, and it is happening right now.
The purpose of this Martenson Report is to nudge you further and further toward taking any remaining actions that can help shield you from what is coming. I want you to understand that my advice and my voice are just one of many, and that your job is to listen to everything and make up your own mind.
Between now and “then,” with “then” being up to 10 years from now, most of the wealth of all overly-indebted nations will be destroyed.
The debt-based fiat money system of our past is drawing to a close. The extent to which your money is locked within that system is the extent to which you risk losing it all. Not (necessarily) because it will be stolen with malicious intent, but rather through benign ignorance.
There are simply too many claims on a future that is too small. Those claims – debts and money – have to be reduced. Whether that is accomplished by a process of inflation or by one of deflation is the only question left to resolve.
Mea Culpa
So far, my advice has been spotty. Certainly my advice to steer clear of stocks was right, as was my advice to avoid real estate. But I was expecting an inflationary destructive process, and so far the data tells us that deflation is the dominant mechanism. So, low marks on that one.
By ‘deflation,’ I mean that money is being destroyed faster than it is being created. The Fed has certainly been shoveling new money into the system at historic, never-before-seen rates. It has ‘expanded its balance sheet,’ meaning it is taking in more and more debt and putting out more and more money.
In a world of deflation, money gains value against assets and goods – the opposite of inflation. During deflation, you want to hold cash.
Here’s The Data
Stocks – The S&P 500 is down 30% from its high hit almost exactly one year ago.