-- Posted Friday, 16 May 2008 | Digg This Article
| Source: GoldSeek.com
Rick's Picks
Friday, May 16, 2008
"Phenomenally accurate forecasts"
I'm in New York for the annual spring meeting of the CMRE, the Committee for Monetary Reform and Education. This group attracts men and women from the investment community who share your editor's disdain for fiat money and other falsehoods promoted by Big Government. Here's the line-up of speakers at tonight's dinner:
James Grant, "Grant's Interest Rate Observer", the man who has brought financial reporting to a high art. In politics, James recently praised Grover Cleveland as president. (We agree and if your knowledge is incomplete regarding Cleveland, check the Mackinac Institute for the article by Lawrence Reed,* fellow supporter of sound money.)
Charles Peabody of Portales Partners, reports on the world's banks and economies. In January, Charles had this provocative coverage, "Is China the Next Disease? We think so!" His list of what a collapse in Chinese markets could produce for US financial companies is not to be missed. Can the bubble burst before the Olympics?
Walter J. "John" Williams prepares Shadow Government Statistics, an extraordinary service for sound analysis that he started when a client asked for his assistance as he could not depend on Department of Commerce GDP figures. Williams found the government figures faulty. His corrections lasted until… GNP methodological changes eventually made the underlying data worthless. His outlook is a deteriorating but still inflationary recession.
Stanley Sporkin, known for his uncompromising work as a lawyer and a judge, he distinguished himself as a legal critic. Sporkin was SEC Chief of Enforcement during the Carter Administration. President Reagan appointed him to the U.S. District Court for the District of Columbia. He retired as a federal judge in January 2000.
Rogue Wave Economics
If you'd like to know more about the CMRE, click here. I was a speaker at this annual event myself, during the 1990-91 recession. An essay that I'd written for Barron's caught the attention of a CMRE director, the late Ed Hart, a well respected commentator on CNBC before the network adopted its current show-biz-'n'-babes model. My thesis was that a "rogue wave" created by a combination of public and private debt was about to swamp the economy. David Ranson of H.C. Wainright went sharply against the grain that night with a very bullish forecast. In retrospect, he was right – very right, since, not long afterward, the stock market began an ascent that would make all previous bull markets look like pikers.
Three More Zeroes
At the time, the doomsday scenario making the rounds had it that Third World debt would do us in. A year or two earlier, Tad Szulc of the New York Times had written a scary article on the topic that appeared, if memory serves, in Penthouse magazine. The article convinced me that a severe downturn was imminent, but in retrospect it seems almost quaint that anyone should have worried about the relatively meager sums involved. For in fact, the Third World owed U.S. banks mere hundreds of billions of dollars, and the problem got papered over as easily as a kitchen wall. Few could have imagined back then that, with the advent of the derivative game in the late 1990s, three zeroes would get tacked onto global debt totals.
One can be reasonably certain that we are not at a similar threshold today, since debt would have to soar into the quadrillions or even quintillions. That would occur in a hyperinflation, of course, but that scenario is extremely implausible for reasons that I have tried to make clear here before. (To believe hyperinflation lies ahead is tantamount to believing you will one day sell your home to some greater fool for a thousand times what it is presently worth, and that automobile manufacturers and air carriers, among other employers, will be paying their workers thousands of dollars per hour. I have long argued that the credit implosion now well under way in real estate and banking can produce only a deflationary outcome.
I'll be interested to hear what Jim Grant in particular says about this at tonight's dinner. Talk to you tomorrow!
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Reserve Your Seat Now
Because seats for the recent Hidden Pivot seminar were nearly sold out, I'm offering the course again on May 21-22, from 6 p.m. to 9 p.m. Mountain Time. Click here, and then on the "Upcoming" tab to register; or here if you would like more information as well as a detailed description of the Hidden Pivot Method and a free Hidden Pivot calculator (our latest model, perfect for beginners).
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Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers' initials will be used unless express written permission has been granted to the contrary. All Contents © 2008, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted Friday, 16 May 2008 | Digg This Article | Source: GoldSeek.com
