Might be a bit lonely on the sidelines, but it does seem to be safe.
Click download link to listen on this device: Download Show
Good comment Matthew
Agreed Matthew. Great interview guys. Gary made a valid point about waiting for a confirmation to 1350, then waiting for the pullback down into the high 1200’s to back up the truck. Typically March to early April is a good time for the intermediate top, and then late April/May (sell in May and go away) brings the PMs down. That is why Summer seems to be the time to really load up. I am going to trade this upswing though, and sell in the low 1300’s in late spring.
My latest thoughts on the deflation/inflation debate.
http://blog.smartmoneytrackerpremium.com/2015/01/deflationary-myth.html
You are correct. Deflation can’t “win” unless the banksters want it to.
Some of you will remember this debate on Puplava’s show in 2009. Mish gets schooled by a generous former investment banker.
http://www.netcastdaily.com/broadcast/fsn2009-0919-3a.mp3
I appreciate you gold comments Gary and tend to agree that this is not the great take-off moment some are suggesting. A little continued prudence does not hurt unless you are playing very short term swings. I don’t know if you noticed but it looks to me that gold may be forming a pennant during the past 4 months . Look at the daily chart beginning from mid October to see what I mean. If not for that spike down in early December it might be a lot clearer.
About the Dollar….some Elliot Wave folks are now saying this move is a major wave five up. So expect a sharp downturn in the near future. They don’t seem to know where or when it will happen though. Last guy I read thought 1.20 was the line in the sand for the Euro and that would signal the end of the dollars bull move…..but that has already been exceeded.
Gary,
Why not begin to leg into the trade and stick with it until gold take’s out the November low? Are you using high leverage, i.e. Gold futures? The goal would be for GLD to exceed 119 and then 120.5. You can then take it from there. In November, I expected gold to do exactly what you are saying for the next 1-3 months, followed by a possible strong rally beginning in February. I really am not expecting gold to rally above $1,500 anytime soon, meaning within the year. There is simply too much damage to the metal. I am more involved with the mining shares. You cannot play the “Noise” as you will never make money. Win three trades and give it all back and more on the fourth. Low interest rates have removed the valuation component of all markets. Valuation no longer exists, it’s all about momentum and carry trades.
I was hoping to stay on the sidelines, but near the close yesterday I got carried away and lost control and bought some more MDW. I’m sure it will go a lot lower now before it takes off one day and goes up 10 fold.
Get short and stay short the metals. The Fed just indicated that they will in fact raise rates this year in a deflationary environment. Are these Fed members actually being compensated for their “work”?
If the Fed raises rates I will eat my shirt! Wait until the unemployed from the oil sector start hitting the unemployment lines….
Your gonna eat that shirt Chris
Chartster, if the Fed was serious about raising rates they could have started doing it little by little starting this month. Who and what is stopping them from doing this? Watch, they are going to push and push the date further down the road. And their main reason for doing this is going to be a weakening domestic and world economy.
But if I am wrong I will gladly eat my shirt. I’ll even add some ketchup on it.
I will not eat my shirt but I can just say it. You can follow FED’s precedence
Think about it. The global economy is weak. Demand is weak. The Yen is wasted. The Euro is declining and the long term chart looks terrible. If the FED raised rates, there would be a massive rush toward US dollars. Exports would be obilterated.
Right now, everyone is concerned with earnings season with a strong US in Q4. This is the great bubble of inflated asset prices with low interest rates. This will continue until it ends. Unless there is an outside event to affect the currencies, i.e. Russia and China forming a BRICs currency, rates will not increase.
Richard, the trouble is if you don’t raise rates and I agree they can’t, corporations and banks with money to lend out will simply sit on their stash, wouldn’t you. Why would anyone risk money they have accumulated for a no nothing interest rate. If rates were allowed to climb the money supply would be increased but the debt would crash the system. So we have a catch 22, how would you resolve this dilemma if you don’t answer me I will consider that you don’t have a viable alternative.
?
Tom.
A 10bps raise is also a raise if they wanna “walk the talk”.
Best to you,
LPG
Can they do 1bp?
Ha Ha!! I will bet some of them have a good sense of humour and might like to try.Just to screw with a few minds.
Sidelines seems about right. Buy stop 1347.
FWIW, I personally like to buy when things get much cheaper… not when they get much dearer.
Matter of taste… and mindset 🙂
Best to all, GL investing/trading.
LPG
+1 LPG -especially when talking about gold!
Luv u too Matthew 🙂
Best to you,
LPG
Lol… 😮
No kissing! And no comedy either! I hear they shoot people in France just for joking around and making inflammatory cartoons. It was Christmas here yesterday by the way so that Paris attack was timed well and landed right on the highest holiday for Orthodox Christians.
It was a real stab in the eye for the most devout to hear of that event.
Nevertheless there was barely a ripple of news locally. The exception was the non-stop discussion and analysis on BBC World News. If you don’t speak English you would not have learned anything at all. Most here speak English poorly if at all so this was not really news in my part of Africa.
Anyway, the streets were pretty quiet. Everyone is in church or at home with family during the festivities. Taxis are a rare sight and virtually all shops are closed. That did not stop the one lone car on the road from almost running me down as I crossed the intersection.
A drunk driver I thought? I got closer and peered in his window and thought of giving him a piece of my mind. Nope, he was chewing Khat which is the national pastime for long haul drivers, the unemployed and other young rebellious teens.
It is legal but the practice of eating it is frowned on by the vast majority of people because users become so stupid after chewing it. So I had a change of heart seeing him with green slobber running down his chin onto his shirt. Instead I just wished him a Happy Christmas and told him to slow down.
And he looked at me very strangely and said………but I am Muslim. And then he started laughing. Thank God its not considered bad manners to wish seasons greetings to the other team. We parted ways peacefully.
They really have to outlaw driving and Khat chewing though. One day……..
DOLLAR TO DA MOON!
Pretium PVG — and then there is all the rest. Maybe the best CEO in the business, Maybe the best to go to production property in 2016-17, Chinese backing, adequate cash reserves, superior location, BC, 8-10 MM high grade oz reserve, 30+ MM oz. low grade call option on contiguously owned property Snowden. Bought at 3.5, 7, 8.4, 2.88 and 4.3 in the last 4 years, 22% of my stock portfolio, trading @$7 today
I agree about PVG and own it. Rob McEwen at MUX is a good CEO too and owns over 25% of the company which he bought with his own money. NGD and FNV have great CEO’s too.
Hello all,
First of all, hope everyone is well and had enjoyable year-end festivities.
Back in early Nov, gold was in the mid 1100’s with sentiment at I don’t know how many years low (between 10 and 20 if I recall correctly). Bottom line: it could have gone worse…but with extreme difficulties.
We are now at around 1210-1220 and I really don’t understand why people are waiting for confirmation…By the time “things” are confirmed in the say mid 1300 range, that would be at least a 13% move from the 1150ish zone… At least. So what would be in the $1300’s something per Oz is a better value proposal that say now at $1210 something or 2 months ago at $1150. I really don’t get it.
I will be a little harsh, but I’m sorry, this is not “successful investing” behaviour.
If things scare some of us when they are trashed and/or get us excited when they move up up up and make us more eager to join the bandwagon, I guess some of us are too emotional and shall give their surplus capital to others less emotional to invest. It will likely be more successful.
It doesn’t matter if one has been invested/investing in markets for 1,5,10,20,30,50,70 years (any type of market/asset class): rules don’t change, in that buying low and selling high is the best risk/reward equation hence the most likely to reward financially. NOT the other way round. And it doesn’t matter what the excuse is: lower prices always equal smaller downside risk – plain arithmetic.
I highly recommend a read (it’s longish but bits and pieces are extremely entertaining) of Ned Goodman’s letter to shareholders of Dundee Corporation 2013 Annual Report.
Here’s one of the most valuable (but again, obvious) part from the billionaire:
“I have learned that you do not make money when everyone is running to buy stocks. You buy when everyone is selling: you buy when non one wants to to buy” (p79). I believe, again, that what Ned mentions for stocks is valid for ANY asset class.
I’m not advocating any buy or sell at any level. What I would be however be happy about, is for people to be aware of their own feelings, and their own behaviour: comfort with buying when confirmation is “in” as opposed as buying when sentiment is at multiyear lows… and when the price is >10% lower (at least 10% lower).
Over the past weeks/2mths, I have been advocating selectivity in stocks, and I have mentioned 2 stocks that I own in previous posts – first note: my portfolio is comprised of about 30 stocks; 2nd note: these 2 stocks are NOT my 2 largest holdings.
I was comfortable in mentioning those 2 stocks as they are traded in ample quantity each day and hence I therefore can’t be seen/accused as/of “pumping” them: they are PVG and FSM.
I also mentioned in various posts that I have been snipping on stocks at the very end of Oct and very early Nov when markets for PM stocks were ugly.
So I’d like to get the record straight and put some numbers to highlight what I “preach” in posts (and again: I AM NOT AFRAID TO SAY THAT I HAVE SLIPPAGES HERE AND THERE, ONCE I A WHILE, IN MY INVESTMENT PROCESS: but I typically to stick to my pre-established plans) – ie to buy when things are ugly.
* I got some PVG at USD4.39 on Oct 31 (I remember clearly that I was angry on that day as I missed it in the 4.15 zone… I felt I was chasing at 4.39 on the rebound but they had gone down enough over a few weeks to my taste so I jumped in). In a follow-up with Richard “Doc” Postma, I mentioned I’d buy more on pullbacks (I think the stocks was back then at USD5.70-5.80) and Doc mentioned it would likely get to the 50SMA (about $5.40ish back then if I recall correctly). I added on Dec 16 at 5.19 (order auto-triggered: I forgot I had it in place, and was not super happy but didn’t Sell it right away to buy back lower as 1) I was traveling the next day and 2) I told myself that I had to stick to my plan).
* Re: FSM, I got some at USD3.62 on Nov. 4th (a bit late, I recon, but they were quite off from their summer levels too). I also mentioned in a “response” to Rev. Andrew around mid-Nov that I am not sure we’d see them again at <USD4, so when they got again at <US$4 on Nov 28, I got some again (got them at USD3.98).
I am super relaxed with these 2 positions, whether gold moves up or down $50 bucks…or even $100. That's the peace of mind given by buying at ugly prices when everything is trashed. However, I watch newsflow on both names and try to think about many of the things that can go wrong with the stocks SPECIFICALLY, irrespective of what gold does in the next few weeks/months.
I also mentioned that I entered at the end of Nov into Jan 2016 GLD and SLV calls, and that I would add to them if gold/silver move down big time. I got into them just before the Swiss referendum (I again slipped on these early Nov: I had in the back of my mind to get some but I focused on stocks and forgot about the options and didn't chase afterwards – only got in in late Nov just before the referendum on pullbacks) So far, I am sleeping with ample comfort. What's more important is that IFFFFFFF gold reaches $1350, I will be selling 50% of my position given that at that time as I shall be up about 100%. We'll see.
So again, when some people here mention "waiting for confirmation", I will repeat myself: 1) I don't get it and 2) successful investing is NOT about waiting for confirmation (cause when the trend is obvious for MY eyes, it is obvious for EVERYONE's eyes, and the asset has LIKELY already moved quite a lot from the last bottom – otherwise my eyes wouldn't see a trend/"confirmation").
Good luck to all investing/trading.
LPG
"When going through hell, keep going"
I liked PVG when I bought it in the teens and like it even more now. I sleep better owning it than if I didn’t.
LPG,
Your comment of buy low sell high is the shiznick.
That being said, the bottom ain’t in on PMs or the stocks surrounding them!
I know this for sure! And don’t even care about the TA on the chart.
Best to You
Fo shizzle ma nizzle!
Lol, ok
Hello Chartster,
If “you KNOW this for sure”, you’re lucky, as I personally don’t ! 🙂
Best to you, and GL investing/trading.
LPG
LPG, you wrote that you really don’t understand why people are waiting for confirmation before buying into gold. I am not sure if you are just kidding or what. I see your point of course but am surprised you didn’t consider that gold is still firmly in a falling channel.
Did you see that small downturn yesterday? Well it was confirmed with a second price decline this morning and if you look carefully at the chart you can clearly see that bear pattern channel is still firmly intact (as of when I wrote this of course….it could all change by the time markets open in the US).
In other words, the very day that so many here were loudly touting gold again and proclaiming much higher prices were on the way was also the day when the price had peaked and was setting up to fall back.
In my view this is still the realm of short term traders, not long side bets.
The point we topped was a fairly predictable peak to some of the technical guys. The only thing that might have changed my mood for gold was if 1230 had been taken out at the very minimum. Otherwise this was just a tease.
There is however the possibility it is transitioning now though and might yet spring to life. You would have been correct to go long in that case. But does anyone really know for sure? I actually think gold may be forming up a pennant or flag but its not clear enough and the odds still favour we get a decline back to 1190 at a minimum.
Below 1170 and all bets are off for January because that would be pretty bearish in my view.
Birdman,
I might have been misunderstood in my post.
The point I was trying to make is that when gold was at mid $1100 in early Nov, people were so scared they were not taking action. Likewise for positioning on some PM stocks.
Now some are talking about moving in/joining the crowd on confirmation when gold will be or break $1350.
This, I don’t get – at all. And I reiterate that this is, IMHO, is not successful investing.
Maybe this is clearer, said it in a much shorter way 🙂
Best to you,
LPG
+1
Lord help us. Matthew, back in November you wrote that you don’t even buy gold. So your plus one is meaningless because you don’t get it either.
I think it’s pathetic that you feel so threatened by my agreement with LPG. He is absolutely right.
Btw, I don’t buy gold because a). I have too of it at MUCH lower prices and, b). now is not the time to favor it over silver or the miners.
Whether I am a buyer or not, I will always watch gold very closely for a number of reasons, not the least of which is the fact that it is the most important driver of my current favorite sector —the gold miners.
I always catch a fish when I put bait on a hook.
Like I said, pathetic. You obviously can’t handle disagreement. I’m curious, what is it that you think LPG and I don’t get?
GL with that. 😉
There was considerable doubt about 1140 gold in November. Many, perhaps most did not then believe that the bottom was in, LPG. Same with mining stocks. They were already cheap but then kept falling. Just because they are low though does not mean they cannot fall lower yet. Keep in mind this has been going on for a couple years already and most people are exhausted by the relentlessly bad news on PM’s and the lack of traction. At much higher prices there were guys swearing on bibles it was impossible for either gold or gold stocks to fall further. But they fell deeper anyway. I don’t blame anyone here for being cautious even if we are near the end (are we really?). So it makes perfect sense to me they balked and took no action. That is not cowardice in my books. PM’s have sucked wind for years.
Birdman,
I understand your viewpoint.
However, 2 things:
1) late Oct/early Nov, sentiment on gold was at a low point not seen in (ball park 15 yrs, I can’t recall the figure) –> crashing prices + extremely negative sentiment = ripe for upturn.
2) trying to timing the bottom is IMHO, a futile exercise. In other words, a fool’s game. I’ve posted several posts in the Oct-Nov period but I guess you were “out” at that time.
My point is that if one likes gold as a LT (read multi year) investment, then one should like it at mid $1100’s MORE than at $1350. Not the other way round.
Past experience with the metal, although it MIGHT alter investor psychology negatively and lead to paralysis in times of crushing prices (or them going down the drain) doesn’t remove the fact that lower prices = lower risk hence better risk/reward. My personal opinion is that if one gets too emotional when prices go down the drain AND/OR don’t have a plan for that possibility, then one should think about NOT investing themselves directly but instead give their money to be managed by other people who are less emotional and more prepared. This is what I meant when I wrote above (quote again):
“If things scare some of us when they are trashed and/or get us excited when they move up up up and make us more eager to join the bandwagon, I guess some of us are too emotional and shall give their surplus capital to others less emotional to invest. It will likely be more successful.”
If past experience is a hamper on future decisions, then better not be involved at all – IMHO.
Also, to finish on the topic and to remove the POTENTIAL impression that you might have had that I was advocating getting long gold here. I re-write what I also wrote above (quote):
“I’m not advocating any buy or sell at any level.
What I would be however be happy about, is for people to be aware of their own feelings, and their own behaviour: comfort with buying when confirmation is “in” as opposed as buying when sentiment is at multiyear lows… and when the price is >10% lower (at least 10% lower).”
What I meant here is that I am not telling people buy here or sell there. I have never written this in any post in any form. [Nor will you ever come across of mine saying that I know the bottom is in, or isn’t in, or gold is moving up from here or moving down from here.] What I do say however is that if one doesn’t buy when sentiment is at multiyear lows in the mid $1100 but prefer instead to buy at $1350 on confirmation, then, again, and IMHO, this is not what successful investing is about. I stick to that view.
I’ll leave it there, understanding that we MIGHT agree to disagree.
Best to you, and GL investing/trading.
LPG
I pretty much agree with all of the above LPG. Of course, as you suggest, it is a lot easier to find reasons to buy at these subdued prices. Downside is limited. But we do not in fact know that the carnage has ended nor do we know in a deflationary environment how much deeper the declines might be.
Oil is a great example. Some Canadian producers break even at prices above 85 dollars which is roughly double today’s contract price. Ouch and double ouch. So is there a guarantee gold won’t also find itself at half production costs of the costlier producers? Probably not.
And at such times most people would just prefer to be doing something else more productive with their money while waiting for an all clear signal that we are trending in the right direction again.
A lot of serious gold followers have left sites like this in the past two years for just that reason. It is the lack of performance on the long side trades that leaves them feeling disenchanted. The shorter term people, and I count myself amongst them, have had better success perhaps because our expectations are lower where the big trend moves are concerned.
It helps a lot to not care whether gold rises or falls but only to stay focused on the directional play at hand. Anyway, i appreciate your perspective. You write a good post LPG. Just curious by the way…what does GL mean? It is at the end of all your comments.
I still feel we will see sub 1000 in gold.
I am personally quite happy to sit until that begins to come to fruition.
Skeeta….I for one can not see sub $1000 gold….Why don’t you just take a chance & buy now.
I’d rather take a chance & sit on my mining trading hands for now Tony.
Like you said below, to each their own.
Good luck.
Cheers.
Skeeta….I respect your stance.
LPG….I agree with most of what you posted…..Whats holding most people back is fear When they say they are waiting for the trend to change , what they are really saying is ..I can not go with my convictions…When they say they are waiting for a pull back , & it comes they say it could go lower so they wait & before they know it the thing reverses & goes up & they miss a gain…..I am small time but I keep buying silver over the past year I was buying at 15 but I was also buying at 17 I was buying every month no matter what the price was….Why? because common sense & logic tells me one day I will make huge profits…But most importantly I am preserving my purchasing power by buying & holding Gold & Silver…I will admit things are different for those people who invest in the markets to earn a living.
Hello Irishtony,
Trust you are well.
I agree with your comment “Whats holding most people back is fear”.
I posted a few weeks back on the matter highlighting that this behaviour is totally “normal” as it is a chemical reaction in the blood due to some hormones levels etc…
Fear leads to paralysis in action (or senseless action).
This is the reason why I having been advocating in several posts the importance of 1) having a plan 2) following/executing the plan and 3) having a plan after the plan.
These simple steps takes away a lot of the emotion in the investment process and instead of being scared of falling prices, it actually makes you rejoicing to see asset prices coming down to your buying zone.
As Rick Rule says quite rightly: “if you fail to plan, you plan to fail”.
Best to you, and GL investing/trading to you and to all.
LPG
LPG….Thanks for the reply……BUT TO EACH, HIS OWN.
LPG, irishtony, good posts. Some thoughts….sorry if I am being repetitious or preaching to the converted.
1. There is no such thing as being on the sidelines. You are always invested in something. Holding cash (fiat currency) is just a play on international money flows and taking an investment in your government. Do you trust them? Gold is not safe but then again nothing is. Gold is the only thing I can think of that is easy to own and liquid that crosses all borders. Yes it is manipulated but so is everything else. Get over it and try to take advantage. I think of gold as a spread or an etf on money and a bet on the stupidity of governments. If you think about it, could any long term bet be safer when the world is run by idiots?
2. You will never know for sure it is good time to buy. If an investment is going up and you buy, then you have missed out on the initial move. If it is going down, then you may be catching a falling knife. It is truly at a bottom, then you are a true contrarian and need nerves of steel with a cast iron stomach….and a lot of luck. If in doubt, averaging in may be the safest bet. If you are going all-in or nervous about the size of a position then that is almost always a mistake. Spread your bets.
3. Be selective. I personally stay away from the etfs since they have some real dogs in them. You can buy PM stocks that have a chance of going up even if the price of gold drops. They don’t necessarily need to be high risk or be junior exploration plays. They could be a miner that is fully financed and soon going in to production, a miner reducing costs as they tool up, or a miner spurred by growth or increased reserves. Royalty plays like RGL, FNV or SLW with growth coming, negotiated contracts and cash on hand can be lower risk and may also pay a dividend while you wait for gold to go higher.
4. There a many strategies….know what kind of investor you are. If you are a constantly swinging from being a fundamental trader to a technical trader to a trend follower you will get yanked around and go in and out and probably always lose. Know your strengths (whatever they are) and stick to them.
5. It is never easy. You don’t need to be smart but it requires time and research. If you don’t have the time or can’t do it on your own pay for a good independent newsletter with a good documented track record that fits your style of trading.
6. Opinions (like this one) are always free :). They may be only worth what you pay for them.
Some good advice there Paul.
Hello Birdman,
Wanted to respond above to your question but can’t. So here it is:
GL = Good Luck
Best to you and GL investing 🙂
LPG
Of course! And good luck to you too!
Any investment has risk especially in a manipulated market. I can assure you that even after next intermediate cycle low, they will still manipulate and it may increase. You solve nothing except the price might be a lot high when you buy.
Government WILL NOT stop intervention in currency market. Gold is traded as currency.
Because of this, you may stay out forever.
Nope I will buy at the next ICL not at 1350. Does anyone actually listen to what I say?
Yes I did. Your complaint is that the manipulation is bad not price too high. What I mean is the manipulation will continue and you will face same problem after you buy.
I did Gary and I thought your strategy was well thought out. The only flea in the ointment is that gold starts rising abruptly and does not stop in the same way that crude began to fall and went relentlessly lower. I have read so many people and heard them say they were waiting for a reversal in crude to get a shot at the declines. instead they missed their chance all the way down and are now too nervous to bet since it has already fallen so far. So they watch it decline sullenly from the sidelines knowing they missed one of the biggest moves of the year. I guess my point is we just don’t know what will happen when technicals crack. Sometimes it really is a crap shoot. We are either in or out when the day comes. In the case of gold I view it with guarded enthusiasm.
Gary
Why should anyone listen to what you say, you just flip flop from day to day.
A while back you said you have to buy the miners and now you say don’t touch anything related to gold stay on the sideline. What kind of nonsense is this.
Big Al says he’s on the sidelines, and on Monday he said he was not on the sidelines he is in the gold miners, wishie washie talk, utter nonsense.
Gary you say the gold maket is going to bottom in the spring, well we are are still quite aways from then, why not let the gold market tell you when the bottom is in, instead of trying to pridict the future which you your self said nobody can do.
Cory said it the other day there has been some money made in the miners just in the last month or two no thanks to the misguided information that you guys spue about being on the sideline.
This has been my observations, and I for one have NOT been on the sidelines in the miners 🙂
Peter
Always, Gary
Thanks for your insight
I started a position in energy withe XOP etf as I had been waiting for the 40’s since oil went below 70. I might be a little early. Bought back into UYM material etf too.
I think waiting for Feb. to get into the stock market might be a little late as the market could be much higher by then judging from the last strong rally. This week was the week to start buying back in.
I don’t know about what anyone else thinks about the story below but every time I read that the majority of Americans are within a single paycheck of insolvency I shudder.
It is really beyond belief. When you drive around any major city in North America you really don’t get the sense most people are broke. The homes are big and beautiful, flashy new cars abound, people dress well and restaurants are often full. But the statistics are quite damning and they are telling us otherwise.
It has not always been this way. The national savings rate peaked at about 14% back in 1970. But we have been on a downhill trajectory ever since. Currently we are nearing lows in average savings rates that approach those last seen before and immediately after the Great Depression.
I am talking single digits of 4% or less and by the looks of it we will fall all the way to zero before this long deleveraging period is over. Really? Yes, because in fact the delevering has barely gotten underway even as we suffer all the indicators that suggest it is full blown in progress.
Velocity is still falling hard too although the chart of velocity suggests we have a couple years before we hit the 1932 lows of 1.18 or lower. Actually, I hardly doubt we fall below a zero savings rate and see the majority of US citizens surviving on credit for a year or two.
This is a somewhat different world and todays widespread use of credit lines, credit cards and consumer loans were ideas that did not exist in the 1930’s. Certainly not to this extent. What this means is that the pain of paying down debt will be extended much longer than might otherwise be the case and absent a full fledged economic crisis we have many years of slowdown ahead of us.
———————————-
On The Verge Of The Next Economic Crisis, 62 Percent Of Americans Are Living Paycheck To Paycheck — By Michael Snyder, on January 7th, 2015
“Nearly two-thirds of all Americans are completely and totally unprepared for the next economic crisis. As you will read about below, a new survey has found that only 38 percent of Americans have enough money on hand to cover “a $500 repair bill or a $1,000 emergency room visit”. That essentially means that 62 percent of the people in this country do not have an emergency fund. Even after the extremely bitter financial lessons that millions of Americans learned during the last recession, most of us are still choosing to live on the edge. That is utter insanity, and when the next major economic downturn strikes most people are going to find themselves totally unprepared”.
From The Economic Collapse Blog by Michael Snyder
http://theeconomiccollapseblog.com/archives/verge-next-economic-crisis-62-percent-americans-living-paycheck-paycheck
Here is the original story from the Wall Street Journal. It is based on a survey of 1000 adults.
Most Americans Don’t Have Savings to Pay Unexpected Bill
http://blogs.wsj.com/economics/2015/01/07/most-americans-dont-have-savings-to-pay-unexpected-bill/
I mean seriously!!. How GD bad has it gotten that 6/10ths of the America population does not have a 1000 bucks on hand anymore? This is just too incredible for words. If anybody knows that the statistics quoted from the Federal Reserve (see article) are faulty I would like to hear it because otherwise this is a disaster in the making.
“The findings are strikingly similar to a U.S. Federal Reserve survey of more than 4,000 adults released last year. “Savings are depleted for many households after the recession,” it found. Among those who had savings prior to 2008, 57% said they’d used up some or all of their savings in the Great Recession and its aftermath. What’s more, only 39% of respondents reported having a “rainy day” fund adequate to cover three months of expenses and only 48% of respondents said that they would completely cover a hypothetical emergency expense costing $400 without selling something or borrowing money”.
Good grief! Hello poverty. Given what we already know happens at the end of a credit cycle it means that the correction process will be bitter as hell if folks don’t get their acts together soon.
All I can do is repeat what I have said many times before. Despite the abysmally low rates on offer for savers it is absolutely imperative you set aside money and reduce debts now before the next financial crisis strikes.
None of us here wants to be in that same leaky boat with the 60% who are doomed.
You bet ! Birdman ! And the Elite will play the sheeple !
Culture has changed. It is truly worrisome. I am not sure Canada is better or not. My wife takes care of payroll and her experience with their employees is similar. They usually pay people one day early. If they occasionally pay people on time, some would come to talk to her. Many poeple rely on payday loans.
Great point Lawrence. It is even worse in Canada. Debt loads are heavier.
However, this is not because that society does not pay enough. For the salary people get, we should be able to save a lot. It is the media which glorify spending and trash saving. One reason I invest in rental property is that in our generation, a lot of people have no choice but to downsize or rent.
“… it is absolutely imperative you set aside money and reduce debts now before the next financial crisis strikes.”
10-4 good buddy!
This reminds me of a time long ago when the mountains were still cooling. I used to go to this cute, but chatty barber who had the unconscious habit of resting her ample bosums on the customer when she leaned in close to cut hair. In that town, the guys at work didn’t say, “let’s go for a beer” after work, they said “let’s get a hair cut”. But I digress.
The gal was a single mum (and did I mention attractive?). One day we got to chatting about money, spending and such, and I said that I’d rather save the money that she planned on spending for a trip to Belize. Her response was, “what are you saving money for”? That was the last time she cut my hair, as I couldn’t see the point of spending time with someone so clued out.
That didn’t happen day before yesterday; it was in the 80’s.
These days I no longer require the services of any barber.
These days I have a few bucks and a few ounces of “car parts”.
I don’t know what buxom barber has .. maybe her kid is a banker.
Great story Irwin. For just a second I thought you were about to relate the story of the Wealthy Barber by David Chilton. Your gal has no doubt gone on to get herself up to her bosom in bills and collection notices…..unless she used those talents of hers to marry up, I suppose.
Now that is good advise Bird, thing is, the people that most need it wouldn’t be on this site, people here have cash to invest which would mean they have debts under control if any, they have a few months or better expenses available without having to borrow it.
Unless your targeting someone that is looking for a last desperate shot, in which case they already toast.
But just you saying to reduce debt and put aside cash does help me to at least think Ive been doing the “right” stuff.
Now, I need to roll a seven, baby needs new shoes.
CBC radio asks Jeff Rubin – what happened to his prediction of $200 oil?
Jeff Rubin, a former chief economist with CIBC, talks about his theory of peak oil and shares what he thinks will happen next.
http://www.cbc.ca/player/News/Canada/Calgary/Audio/ID/2646488681/
Too many variables present in today’s global economic world.
Many people believed and presented facts that the US would enter deflation 5 years ago, and some continue to believe this. Many also hypothesized that municipalities would go broke and default in large quantities. There are two parts to every story and one must not only be a genius to identify all parts, but then place a weighting of importance on these parts AND, the big AND, hope nothing changes in their model. The world is dynamic and many of these predictions use static variables and limited facts.
It is the same today with the oil situation. If you ask many, they will reply that the system is oversupplied with oil, which may be true, but has nothing to do with the price moves. Professionals in the oil industry are aware of supply / demand curves better than anyone else. Do you really believe that the majority of these participants were incorrect? There are other forces at play here.
I’m a gold bug that does NOT want gold to pull a rocket launch. The miners will do spectacularly if gold just rises modestly. A linear and sustainable uptrend of about 45 degrees on a chart would be ideal.
The nice thing about a market that takes two steps forward and one back is that it bores most participants as much as it keeps them skeptical. This creates the “wall of worry” that is so healthy for a bull market.
Raging bulls develop on very limited participation. The more people that stay out, and nervous, the better.