The Unwinding
Chris Laird
Depressions are really nothing more than the unwinding of excesses..
Unwinding bubbles really. If bubbles weren't forming, you would not have
depressions. As I have said, inflationary or deflationary, it makes no
difference. A depression means your fighting for survival.
The Gold money story is all about this. Gold money tracks either trend;
inflationary or deflationary. Gold money tracks excesses. If gold money
existed it would not stop a depression. But it does illuminate the causes.
In the times of the south seas land bubble, or the tulip mania there were
gold standards. The collapses occurred and happened all the same.
But the people who had gold money survived. And that is because, gold money
is recognized not only now, but is a millennia old cultural standard, not
easily erased.
I have a friend who fled Vietnam. He fled in the 80's with 4 or 5 oz gold.
Paid his way out with some gold, and started in the US with a few ounces.
Now he works for Oracle corp., and lives in a convent. And I Know where he
is putting his savings....I met him when I worked for Oracle as a systems
engineer.
Let me make something perfectly clear: I don't expect the world to continue
anywhere near to what it is now, and I mean in 5 or ten years our world is
gonna suck. I do NOT believe in any muddle through scenario... that is
because the imbalances now are so incredible and way beyond 1929.. that the
next depression will be far worse.
Now then, my website, or newsletter really, prudentsquirrel.com, its
editorial focus is on this expectation.
If you want to continue things as they are now, and plan on making returns
on your investments, your going to find that the paradigms of reasonable
returns are gone already... the only thing remaining is for the excesses to
be burnt away.
I'm not a gloom and doomer, I'm a realist. The great depression which
started in about 1929... led to ten years of survivalism. Financial and
physical survivalism. People, that was only about 75 years ago. It enveloped
the world.
Its coming again…
My newsletter is the same breadth of financial analysis you would find at a
good news source, the only difference is that the editorial position is not
very optimistic for believing things will go on as they have all our lives.
We have all lived in a time of plenty, but soon, as in the 7 years of plenty
followed by the seven years of famine.... we're going to see days where mere
survival will be the order of the day.
My father was the financial editor of KNX news radio, and is reasonably
famous. He is more or less a perma-bull and will tell u so. I'm not the
same. My grandmother was a financial writer. Its in my genes. My whole
family is mostly writers....
I spent most of my youth learning about mathematics, and technology. But I
have always been fascinated by economics, and when I was 24 I read a
monograph by Dr. Fekete, in 1984 about. It said then that the outcome of
deflation and inflation is essentially the same result. I was fascinated
then. Now since then, I have been working in the technical fields, but
always following in the financial realm, like my parents.
But there is a difference, my grandmother, publisher of USA magazine, a
newsletter, was not a perma-bull. My dad, is a perma-bull, and had even
interviewed Alan Greenspan....
And I'm like my grandmother. I'm definitely not too optimistic... I don't
like what I see, as I suspect many of my generation feels, we wont see the
times of plenty we grew up in from our youth. I'm 44 now.
In my writings, you will find points of view that are really not the usual
information, or typical topics. I'm not quite sure why, but I think
differently, and have different views than the mainstream, even the
mainstream here at GOLD-EAGLE.com. My readers have said as much to me. This is all fine.
About 6 months ago, I said, the Chinese will not cut the Yuan loose. They
haven't and are risking a trade war to keep it the same too. That is even
though at that time they were giving mixed signals. When I wrote that, there were almost no others saying that I know of, not one.
I'm not really into making predictions, but rather looking at strategic
trends. And that is what your going to find in my newsletter. And it will
not be your typical stuff.... because I don't use technical analysis. I use
Fundamental analysis..... and I believe this is the way to go now. Why?
because all the paradigms are changing now, and technical analysis relies on
paradigms not changing.... basically. As a mathematician, I can get away
with saying that. Technical analysis is essentially a trend follower. It
has uses but its not as useful now as it used to be even several years ago.
You can go to prudentsquirrel.com now and leave your email if you are
interested in subscribing. I'm almost done creating the mechanical parts of
publishing the newsletter, and I'll be up very soon. It will be a weekly,
and to start with will be rather simple. It is not free, but is very
reasonable.
Chris Laird, editor
www.prudentsquirrel.com
June 25, 2005
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