There's Always a Silver Lining

By: David Galland | Tue, Mar 10, 2009
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Here at Casey Research, we are trying not to be overly pessimistic, but there's no denying the mass of bad news coming to us from all fronts: the forces of collectivism are using the cover of the crisis they largely created, aided and abetted by capitalism's quislings, to roll over the individual.

Even so, contained within the dire reportage is also some very good news for you personally.

The Bad News

As fully anticipated, with its first budget plan, the Obama administration has fired a salvo into the side of the productive classes. (For those of you who are not U.S. citizens, feel free to use Team Obama as a proxy for what is likely to occur where you reside.)

Yes, we expected the $1.75 trillion budget deficit, which will, by the time all is said and done, come in a lot closer to the $2.5 trillion number anticipated some months ago by our Chief Economist Bud Conrad.

Yes, we expected the government to begin raising taxes, which they are proposing to do with vigor - starting with an increase of $1.4 trillion on the people who earn in excess of $250,000 a year. "Right on!" shouts the mob, on the way out the door to burn Porsches (which, Bloomberg reports, is now becoming something of a trend in Germany's capital, Berlin).

For no other purpose than to keep the record straight, it's worth noting that thanks to the government's steady dose of inflation, $250,000 today will only buy you 77% of what it would have in 1998... and 56% of what it would have in 1988.

A decade from now, given the inflation rate we expect, the dollar's purchasing power will erode by another 50%, and probably a lot more than that. In fact, at the current rate of money creation, by the time the dust settles, $250,000 might be the annual wage commanded by burger flippers.

But, hey, look at the bright side, at that point everyone will be rich!

The further details of Obama's budget plan are a hodgepodge of this and that, some of which we even agree with (like cutting business subsidies). On the whole, however, the overarching mandate appears to be to thrust the hand of government, like some motion picture kung fu villain, deep into the heart of American enterprise.

And government's expansion is far from over. The news continues to pour in...

There is more, so much more, including a $638 billion reserve fund for healthcare reform in the president's budget that loudly broadcasts that, "Yes, we're going there." There being nationalized health care.

However, there's also some good news to be found in the way things will be.

The Good News

My fellow citizens of planet Earth, it is now abundantly clear that the trend toward socialism in all its many disguises is about to, once again, shift into high gear.

We've been here before, encouraged by the words of Karl Marx, a distinctly unsuccessful individual (to read his life story is to read of almost unending misery, poverty, and discontent) but a decidedly successful phrase-coiner, knocking the world off its axis with his "From each according to his ability, to each according to his need."

While no one with any real sense of history, not to mention economics, can take any overt joy at the prospect of the dark clouds of collectivism looming high in the sky above us, there is, if you pay close attention, a very big opportunity in all of this.

Namely, we are now presented with a relatively rare chance to see with some clarity into the future.

Imagine if eight years from now you could step into a time machine and zip right back to this very moment. How much money do you think you could make?

Well, just because the chattering masses have the blinders on as they march forward to their collective penury doesn't mean we need to join them. And, if we are even a little bit careful, we won't.

So, what is it about the future we can now see? Some broad strokes...

(This is a topic we are discussing at greater length, backed up with specific recommendations, in the March edition of The Casey Report, released on March 3. Among its many highlights, Doug Casey has contributed an article titled "Street Fighting Man" about the prospects for social unrest.)

Provided you keep your personal wealth profile low (there was a reason Sam Walton, founder of Walmart, drove a beat-up pickup truck), your financial powder dry, and, maybe most important of all, retain your sense of humor, the opportunities in the unfolding crisis will be abundant.

Whatever you do, don't be complacent about what's coming.

We are long past the point where doing nothing is an option. Review your personal finances, cut out unnecessary expenses, talk to your accountant about tax planning, and, if you're a U.S. citizen, consider moving at least some of your wealth out of the country while you still can (but please, don't try to hide it... that's a fool's errand). If you own gold, only you and your spouse, if you have one, should be aware of it.

Ask yourself, "If I just dropped in from eight years in the future, what measures would I take?"

Now, take them.


There is no time to lose in taking the necessary steps to preserve (and multiply) your wealth. The best way to do so is going with the flow and playing the trend... a strategy that can pay off handsomely, even in an economic crisis.

The Casey Report analyzes those market trends and advises subscribers on how to take advantage of them - whether it's agricultural plays or shorting big-name stocks that are particularly vulnerable to the market decline. You can now kick the tires risk-free, with our 3-month trial subscription with 100% money-back guarantee... click here to find out more.

 


 

David Galland

Author: David Galland

David Galland
Managing Director
Casey Research, LLC.

David Galland

Over the course of his varied career, which includes a stint at the fabled Climax mine following college, David Galland has worked as a conference director for the world's largest investment conference (National Committee for Monetary Reform, 1979 to 1987), as a financial newsletter publisher or editor (Gold Newsletter, the Aden Analysis, Wealth Magazine, Outstanding Investments, among others), as a founding partner and director of a successful mutual fund group (Blanchard Group of Mutual Funds), and as a founding partner and executive vice-president for EverBank, one of the biggest recent successes in online financial services.

David is currently a partner with Doug Casey and Olivier Garret in Casey Research, LLC., an international firm providing research and investment recommendations to individuals in over 150 countries. Casey Research currently publishes several publications on a variety of investment sectors, including metals & mining, energy, technology and commodities. In addition to his management responsibilities, David serves as the managing editor for The Casey Report, a monthly publication dedicated to identifying big trend moves and how to profit from them; he also writes a daily communique, Casey's Daily Dispatch.

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