The Economic Tsunami – Dramatic Shifts to be Thankful For


Dramatic financial forces, in play for endless years, have finally spewed forth in a sea change of volcanic abruptness.

Far below the crust of most human awareness, huge teutonic plates of supply and demand, one pulled against the other, have been distorted by the gravity of governmental interference.  The struggle, all in one moment, finally gave way.

A way of life dissolved with a force that registered on fiscal seismographs around the world.

Within months, gigantic blasts of seismic fiscal pressure broke years of fundamental belief, crumbling financial institutions, melted markets, and ripped loose the establishment with tremors that split the seabed of investment prudence.

The shaking plates cracked modern society with prices rising like lava as purchasing powers imploded simultaneously.

These incredible market upheavals met in a raging monetary explosion that pushed a social energy wave at tsunami speed toward a trembling modern world.

Soon, this ageless frenzy will be spent, its energy released, the turmoil stopped and economic equilibrium restored.  The markets will become quiet almost as quickly as the rage began.  Financial common sense once again will cast its glow on the calm bazaars of human commercial bazaars.

But the new moon of business and investing will cast an amber glow on altered shorelines of trade and exchange.  The sun will rise on new forms of energy and coastlines of productivity will be formed from different reefs of social-economic action.

There will be endless miles of new exposed territory, previously covered by the sea.  The mud on this new land will be uncommonly rich in resources and amazing opportunity.

I used this tsunami analogy because mankind (and hence economies) is a part of nature as are volcanos that create new islands, and tsunamis that wash away debris.  Life is change. Change creates problems.  Problems create opportunity.

A few investors profit from tuning in to this aspect of our reality.  Most lose because they are surprised by and/or resist change.

For example, there have been many readers asking me if the Fortis news article of a US Financial market meltdown within weeks is true.

First, let me be clear. The article looks like a fraud to me.

I took a look at the official Fortis Bank website.  There is a list of Fortis press releases there.  No warning of this type is mentioned.

There is a good article about this by Paul Haughey  at opednews.com entitled
“Fortis Prediction of US Bank Meltdown a Net Hoax: The Making of an Urban Legend.”

That site says: “Paul Haughey is the director of Books for the Planet, a not for profit organization which supports literacy, the environment, and social responsibility through education and programs.”

Haughey says: “This article documents how an urban legend got started the weekend of June 28-29, 2008, how and why urban legends spread virally, and what you can do to spot them and stop them.

“STORY DOES NOT HOLD UP TO SCRUTINY

“A quick internet search revealed the same abbreviated ‘article’ — only one paragraph long, with the exact same introductory statement — has been posted on 269 other blogs and discussion boards. Most of these discussion boards allow anonymous posts, with no accountability required by the poster or author (such as the Sean Hannity fan site, the Ron Paul discussion board, etc). The story can also be found on Digg and other viral marketing and web ring sites, and I predict that you will probably see this many more times, on discussion boards or in emails, for months or years to come.  I next searched every legitimate news site I could think of, including press release sites, blogs or personal web sites by Fortis directors or employees, interviews, oral or written public statements, etc. I found no predictions of 6,000 bankruptcies.”

Haughey sounds reasonable to me. We’ll look more at perception management and the internet in upcoming messages.

The 6,000 bankruptcies would be highly unlikely by the way. At the worst, the Fed and/or government would inject still more liquidity and the US dollar would fall more instead.  This is why we should be multi currency investors.  More about this in future messages as well.

However, the point I am focusing on today is how, right now, the public is willing to panic over every little rumor it hears.

This means that things are about to turn really good…because one of the few things we can really rely on is our understanding that the public is almost always wrong.

The changes taking place will offer the greatest opportunity we have seen yet.

Prepare to take advantage of them.

Profiting from change requires three steps, surviving the truth, spotting trends and distortions and then shifting.

Surviving The Truth

The truth?  There is always change. With modern technology we just know more and with modern marketing most of what we know is the bad stuff.  This is an era of fear mongering because bad news sells.  Most people are willing to pay the most for…shock…doom…gloom and disaster. Adrenalin is a drug that addicts the majority…which may be why is so often wrong.

To know the truth we have to first stop soaking in this morass of bad news.

The truth is that right now stock markets and the global economy after a super heated spurt are in a correction phase.  This is predictable, normal.  Times of high performance are always followed by periods of slow performance.

I and many others have been writing about this for years. This thought that markets continue to act as they always have should not come as a surprise…though for most it does.

The next truth is that the world is immensely rich…even if we had the worst
downturn in a hundred years, we still have more richness than ever before.

History supports the fact that we will have even more.

We should use this holiday to thank God for the energy crisis and high gas prices.

Higher energy prices are not much of a problem.  The world will shift. Smaller cars, higher gas milage performance…new technology. Lots of new profits and a different way of life will ensue.   This is not a big deal.

Environmental issues are.

Were it not for the energy crisis, Americans have proven that they would continue to drive their Suburbans and Hummers to their green meetings.  Imagine what would happen to our air and water resources if the growing wealth in China tried to duplicate that!

Much of the Western world needs to eat less and walk more.  We need cleaner ways to derive our energy and more efficient ways to spend it.

Nothing but higher energy costs could force us to make these inconvenient changes.  High gas prices may help not only change but save the world.

This is all truth!

Spot Trends

Next to profit from the change, we have to spot trends and distortions.

Our investments have to survive the social economic tsunami which is being financed by inflation.  Buy real estate. Buy commodities. Buy multi currency bonds and shares.
Shift

Then finally shift.  For example, the green portfolio we created and track dipped early this year but in the last three months it has risen 30% while the old school (Blue Chip shares) have dropped nearly 20%.

Real estate prices have dropped like a stone…but rentals are up and rental prices rising.  This is opportunity!

I could go on but this is a holiday weekend…so let me end with encouragement for you to see the positive, good, excitement and adventure this change will bring.

Your future may not be as you thought it would be.  This does not mean it will be bad. Take each day at a time…enjoy it and look for truth, trends and distortions and ways that you can serve and proser in this ever evolving world.

Gary

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