So what was the result? Stock retreated sharply on Wednesday afternoon after the Financial Times reported that E.U. banks would not go along with the E.U. officials’ scheme. But then stocks shot up in the United States–alot! Why? View it as a flight for safety. The world is reeling, and it’s not like there are a lot of good options available. Don’t confuse this substantial gain as a signal that the U.S. stock market is strong. What it means is that people are so concerned that the European Union won’t last long that they are pulling their funds out of the ailing investment classes that are on death’s door (anything European), and temporarily putting them into something that is not going to die tomorrow. This is where the U.S. stock market comes in. But, in the not too distant future (days, weeks or months), this will be the fate of the U.S. stock market as well because fundamentally the U.S. market is flawed. The U.S. market has the noose of debt snuggly tightened around its neck. You couple this with massive job losses, increasing taxes, and rising interest rates just around the corner, and the cataclysmic aftermath may be the death of any stock market gains for the foreseeable future and a subsequent obituary for people’s annuities, pensions, 401(k) plans and IRAs.
Take the time now, while the window of opportunity is open, to re-assess your investment portfolio. Make sure your paper/tangible asset ratio is appropriate given the implications of a collapsing global economic system. This may be temporary, it may be long-lasting and life changing. We don’t know. Either way, the transitionary time is what could leave you destitute or prosperous. The only difference is did you act? Did YOU do what needed to be done to protect yourself.
Things are changing. Currencies and political systems are dying. The economic and political structures that we once knew are becoming yesterday’s news. Please act boldly, quickly, and with wisdom.
