Investing Wisely - The Euro and China Are In For Trouble

By: Steve Bauer | Wed, Dec 29, 2010
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Brief Introduction

My focus is "Investing Wisely", e.g. taking advantage of the bull/bear cycles as they occur within the overall marketplace. Integrating modern analytics within these cycles means maintaining a process of thorough fundamental, technical and consensus analysis of the marketplace. I believe that this discipline provides the necessary clarity regarding the rotation that most all companies goes through; from favorable times to unfavorable times and perhaps back again.

I am often asked who I read and why. The below Video URL are the views of an excellent Economist. He is well credentialed and admired for his books and forecasts. I definitely do not agree with all that is being said or suggested in this video but one of the tricks I learned many years ago was, always take a close look at both or all sides of the picture. I believe there will be many scenarios presented over the coming months, some with alarming implications. I suggest you do not take any to heart but simple go with the flow.


The Euro and China Are In For Trouble

The Euro could unravel in the coming 3-4 years as the political tension continues to increase and ultimately creates a divide between the core and periphery. William Black says the economies on the periphery are likely to remain very weak and will lead to civil unrest and political overhaul. In the end, the strains will be too much for the region to overcome.

Black also discusses the imbalances in China and why the Chinese is likely to experience their own crisis in the coming years. The full interview (Video) is attached: http://www.youtube.com/watch?v=8B9ZcXLvNa0&feature=youtube_gdata

As an economist, I have offered my thoughts over the past months, and the main difference is that I do not isolate Europe or China or any particular country. In my more macro approach to the Global economic problems I offer little positive (2-3 year forecast) to any country or government.

I follow the media dispensary of information very closely. There is a total absence of a macro focus on the global. For example, the United States is in as much or more trouble that many others. News is often focused on the events of one or two countries that happen to have problems that particular day or week. The following day or week the media move on, offering virtually no comprehensive or conclusive picture of the - over all economic problems.

More recently when there is a report about a particular economic event in a given country or two the stock market just shrugs its shoulders and reacts in a Pavlovian / indifferent manner. It is so very irrational and unprofessional that I cannot believe that the writers for the media are actually drawing a pay check for the junk they write.

So this video provides information for you to ponder. I suggest that you not limit your horizon to these two country examples but to expand your understanding that the world is in an irreversible economic mess.

This is because of lousy leadership and spending by governments, people and corporations. It has resulted in over indulgence, and it will be paid for in one manner or another. Yes, the people will pay dearly.

Would you like to have something brighter to focus on?

I promise to offer, this coming Friday, my solution on how to - financially overcome these worldly economic problems as an individual or family. I believe you can prosper despite what is being handed to you pursuant to the gross mismanagement of the economies by most all governments for decades. I hope you will look for my SafeHaven.com Update - Recommendations coming this Friday instead of my normal Sunday publishing routine. It has been my solution, perhaps it will become yours too.

As I said above: "I definitely do not agree with all that is being said or suggested in this video but one of the tricks I learned many years ago was, always take a close look at both or all sides of the picture. I believe there will be many scenarios presented over the coming months, some with alarming implications. I suggest you do not take any to heart but simple go with the flow." As an old fox, this is just part of what sets me apart from my peers.


My Wrap

It is important that this article not be viewed as a recommendation for the purchase or short sale of any company or ETF at this time. Favorable to the process of "Investing Wisely", it is intended to suggest that - fundamental, technical and consensus data analysis is very helpful to identify Inflection Points as the marketplace cycles from Bull to Bear and back again over and over and over again.

It is this continuous "cycling" that presents us all with clear Inflection Points. So the good news is that we are given frequent and conservative (low risk) opportunities to "invest wisely" or to simply hold cash.



My Current Bottom Line:

* I am holding 100% Bearish Positions.

* Patience and Discipline - waiting for my list of Fundamental, Consensus and Technical - "Conformations" to all fall into place is part of the necessary process for "Investing Wisely".

* Inflection Points historically have occurred historically about three - five times per annum. We have already had 5 clear and meaningful Inflection Points so far this year. Investing at or around the time of my Inflection Points has proven to be a profitable way to invest.

* In my late August posting, I said: "The Market is now (very possible) setting up for another meaningful but likely (short in duration) Rally!" It certainly did rally!

* Now it looks just the opposite. One of these days this choppy and bifurcated market (late April to date) will do something meaningful and the next possibility of that is a meaningful Pullback.

* High Volatility may not currently be showing up on VIX due to the current rally - but VIX being an Inverse Indicator, I can assure you that it is clearly - alive and well.


If you would like to have:

* After my making specific Recommendations - An Email from me at the time I Sell / Cover each of my specific Recommendations. This is an exclusive service for SafeHaven readers.

* Information about my Work / Methodology / Services, or of my personal and professional background.

* A second opinion based on an article or something said on the financial networks.

* My performance record while contributing with SafeHaven.

* My on going Research / Analytics Commentary, 2 -3 times each week you may want to become a "Follower" of my personal / private Blog.

* And you are a -- Serious Investor ...

- - - just send me an Email, and I will respond promptly - - -


 

Thank you for your time in reading my "stuff" and continued interest in my work.

Smile, have Fun - "Investing Wisely",

 


 

Steve Bauer

Author: Steve Bauer

Steven H. Bauer, Ph.D.

Steve Bauer

Steve has several degrees, i.e. post graduate degrees and doctorate and a great deal of (too much) continued education. For seven years, he did a stent as a University Professor of Finance and Economics.

Dr. Bauer also writes for SeekingAlpha.com. His articles can be viewed at: http://seekingalpha.com/author/steven-bauer?source=search_general&s=steven-bauer

He owned a privately held asset management firm and managed individual investor and corporate accounts as a Registered Investment Advisor - for over 40 years.

Professionally he is a financial analyst and private asset manager / consultant / mentor.

Steve can be reached at senorstevedrmx@yahoo.com

Copyright © 2010-2013 Steven H. Bauer, Ph.D.

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Source: The Contrarian Take http://blogs.forbes.com/michaelpollaro/
austrian-money-supply/