The Great Recession




Inflation / Deflation & Fiat Money

Gold & Silver

Fixing The Problem

Our Current Downturn

Nearterm Outlook

  Real Estate






Continued rescues

Of Europe...

After the flash crash of May 6th, we had the announcement of a $1 Trillion rescue package for Europe which was immediately applied to Greece (short term interest rates had hit 20%).  Later on in the year, the solvency of Irish banks came into question and required another bailout.

Of the United States...

In the United States, although we saw the ending of QE1 in the April time frame, the fed saw a softening economy and began recommenced of bond purchases in August and the official announced of QE2 in November.  QE2 stipulates purchase of $600 Billion of US Treasuries and $300 Billion on mortgage backed securities over an 8 month time frame.

Of China?

China implemented it's own stimulus package post 2008 and has seen a rebound in it's economy with government stated GDP growth of around 10%.


We saw the intensification of the whole mortgage backed securities problem (MBS).  It looks like many of the mortgages packaged post 2002 or so were registered with the an electronic mortgage tracking system called MERS which allows easy transfer of the mortgage ownership between parties.  Unfortunately, this electronic system seems to have some inherent problems: mortgages are supposed to be registered with the state (hence no taxes were paid by the financial institutions) and many of the mortgages transfers didn't properly transfer the promissory note which allows a lender to properly foreclose on a property.  When you hear the word foreclosure gate, it really referring to companies forging documentation to make the primossory note transfer look legit.

Precious Metals

Precious metals did well in 2010 with gold starting at $1120 and ending at $1405 (25% gain).  The real standout was silver which went from $17 and ran all the way to $30 (76%).  As a comparisom, we had the DOW which started at 10,500 and edged up to 11,500 (9%).

Unemployment stuck at 9.7%

But if you included some other figures, it's actually close to 18% or 19%

Trillion Dollar Budget Deficits

Actually, it's looking to be about $1.4 Trillion of so.


Well, now that we have 2010 out of the way, how's 2011 looking?

Real Estate - Look for

The Market

There is no reason why is shouldn't continue to go up, but I'm still on board Peter Schiff's DOW/Gold 1 to 1 parity theme.  I.E., the DOW will eventually equal one ounce of gold - that could be 5000 DOW / 5000 gold or 3000 DOW / 3000 gold.

Currency Wars

This will most likely become a bigger issue as 2011 progresses.  With QE schedule to continue all the way though at least the summer of 2011, the US looks to continue to debase the dollar.  Will China hold the yuan/dollar peg?  With the China/Russia trade deal that bypasses the dollar, perhaps we will see the eventual decoupling of the dollar from the yuan.  Massive dumping of US assets by China may precipitate a dollar currency crisis for the United States.

Sovereign Debt

This perhaps the biggy that will rise to the surface for the Western world.  It's national sovereign debt for the countries of Spain, Portugal, Italy, Greece & Ireland.  It state and municipal debt for the United States.  2011 will see whether in-debted European nations are willing to undergo austerity to remain a part of the monetary union.  It seems easy enough and likely that states will receive a bailout for their debt from the US government, but municipals are another story.  The municipal sovereign debt problem will be an important story to watch for 2011.

Precious Metals