This blog entry will be updated as needed, to revise my view of the US economy and the world economy. You will see text colored (blue). Click on these words to see a blog post or other material to provide detail of the basis of my view.
Welcome to my blog, my name is Mike Murphy, a Computer Consultant/Programmer turned arm-chair financial blogger, with help from other bloggers and friends (John Chinnock). The goal of this blog is to serve two purposes, one is to help me continually focus and articulate current thoughts of the Financial Market & US economy for my own trading. A second is to hopefully help those who know me to safeguard their savings from buy and hold mentality in this historic economic problems the US faces.
Short take
The US Stock market and the US economy will see substantial pressure from a massive deflationary collapse that will not end until the US government enforces honest accounting and loses by US banks are realized. Current target for S&P500 and DJIA for a "bottom" is 550/5000 respectively or lower either in USD cash or living standard degradation equivalents. For example, if cost of living doubles, in real terms a S&P 500 at 1,100 is at 550. The US economy will be in a recession/depression that will span 10-17 years from the initial downturn in Dec 2007. (updated from 5-10 based on US avoiding taking action 1-2011)
During the economic turmoil storage of wealth in stocks, bonds, cash, real estate, or natural resources (gold) all involve risk.
Therefore I strongly advise against keeping money in general stock funds, better off in natural resource investments and some US treasury notes (cash). There will come a time where US cash will have turmoil (devaluation). However this is likely to happen after 2010, but it could be triggered at any moment due to US government actions. Please read the next section, my verbose view, to better support this view.
Top 3 blog entries worth reading
Investing in Natural Resources and fixed income CD's <- This post is a grand summary view, linking to other posts.
My View of Economic forces
I am writing a series of articles on Monetary and Economic terms and views, click here to read this series to gain my perspective of economic concepts, starting with "What is Money?". A critical concept that all "wealth" is really a pyramid valuation scheme.
Video 12-2-2010 on how the Financial system is broken, a short video summary view of book Inflated: How Money and Debt Built the American Dream
Click here to watch video series by Chris Martenson, explaining the economic forces the world faces.
The Secret of Oz, video on how gold is NOT The answer to monetary problems
ZeitGeist - Watch this in a dark room peeking out from under a blanket, with gold bars and a gun handy.
Videos on this blog by Jim Chanos, George Soros, Mark Faber, Peter Schiff, Paul Volcker, Gerald Celente, Jim Rogers
China is NOT the world Saviour, follow up post from Chanos
Additional Blog posts worth reading
Stock charting, Long term trend line dating back to 1970, possible important level for future stock market.
How much is 1.5 Trillion dollars? An important concept to appreciate the financial situations
Buy and hold for stock market investing does not work!Unemployment is much worse than reported, over 10 million out of work.Inflation in terms of gold valuation vs stock market
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