Saturday, January 18, 2014

Tomorrow?

I shared the good news, and the bad news...

The good news is, we could have an incredible asset boom – reaching bubble proportions through 2015. It could keep going into 2016, but by that point we will be tightening our trailing stops.

The bad news is, our government's finances are a ticking time bomb. The day we (the people) have to pay the piper is years down the road – 2016 at the earliest.

The only way out for the government is inflation. Our signal to get out of stocks will be when inflation hits 5%.

At that point, you will want to make sure that you own real assets that beat inflation. I believe income-producing real estate will be an excellent place to be, as the rents will keep up with inflation. The "big table" of how assets performed in the 1970s is also a great guide, starting in 2016.

One last thing... everything I've told you in the last two days is my best guess about will happen in the future. I don't have a crystal ball. I'm sure I will be wrong about some of these points.

But this is my working script. Importantly, it is subject to change. If you're reading this in 2015, it might not be worth much. But so far, things have gone according to the script. Asset prices – like stocks and real estate – have already soared, as the Fed has "juiced" the economy. Mom and Pop America are just now starting to get interested in stocks.

My basic prediction is that will go on for longer than people can imagine, and prices will go higher than people can imagine. I think the peak could be sometime around the end of 2015.

This is the script I'm working from. It's been pretty darn accurate so far. And I expect it to continue.

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