I'm now going to list for you various areas that concern me:
- The Japanese Banking System.
- $170 trillion Global Derivative Market (Bank of Int’l Settlements) Unregulated, no standards, not listed on exchanges, not clearinghouse funded, counter-party defaults very possible.
- U.S. Government unfunded liability $44 trillion.
- U.S. Debt – All households, governments, business
1980 $ 4 trillion
2002 $ 31 trillion - Economic expansion of 80’s and 90’s questionable.
Dow + 1,000% Debt + 700%
Energy Consumption (barrels of oil consumed) only +34% in 20 years.
New Cars sold annually only +38% from 20 years ago
Conclusion: The Stock Market and Debt grew 20-28 times more than energy usage and auto sales which are actual “real” goods and a better measurement of “real economic growth” not distorted by “paper money prices.” - U.S. money supply:
1787 – 1970 2 centuries $600 billion
1971 – 2003 32 years $ 6 trillion -
Globally, money being printed at alarming rates. (In last 3 years:
Japan +50% (M1); U.S. +25% (M2)
My conclusions are as follows:
- Another 1966 – 1982 type stock market and economy (15 years) all over again for all the same reasons. 1966 Dow 1,000 – 1982 Dow 1,000. Inference: stock market goes sideways at best.
- Increasing inflation, interest rates to rise substantially, stock market weak. Dollar much lower long term. Bonds much lower.
- Banking and debt defaults possible.
The U.S. is still the greatest country in the world and it will survive. Financial assets in the next 2-5 years will be impacted because of severe monetary and economic distortions. Currently preservation of wealth is senior to all other considerations. 
