If you are like most folks, you have given up on the lure of big stock market gains. Most folks have moved their assets out of stocks and into the Bond and Money markets. This at a time when the Money supply is being expanded at a breakneck pace (Chart Above). Borrowing is at an all time high. People with money and knowledge are buying fixed supply tangible assets. This all helps fuel the expansion money. Now, think in fractions: Last quarter you had 1 dollar out of 7.9 trillion. Now, that same dollar is 1 of 8.2 trillion. As this
| Remember the S&L bailout?
The ultimate cost will be $950 billion. That
comes to about $32 billion a year for thirty
years, no matter what we do or who we elect.
| According to the recent GAO report, the
Postal Service could max out its $15 billion
credit line next year. If Congress does not
approve some sort of reform proposal by
then, lawmakers could find themselves dealing
with another bailout in the near future.
growth accelerates, your fraction will get smaller and smaller. The only protection is to take it out of the pool. All things money will be weighed against this fraction. It will take ever increasing amounts when divided against fixed or limited supply commodities. This is why real estate prices have risen so dramatically over the last 5 years. It is why all forms of fixed supply tangibles have increased in value. Art, antiques, old automobiles, first edition books, records, rare gold coins, these are all examples of the best performing assets. Take stock of your investment portfolio. How many of your asset classes are tangible? Other than your home, if you are like most people, you have very little in tangibles. Grandma’s Hummels treated her well. Her antique furniture constantly increases in value. Grandpa’s gold coin collection is worth many times what he paid for it. Yet, overall, these items rarely make up greater than 10% of the typical investment portfolio. This has to change. 10% is a bare minimum. From 1977 to 1980, the rate of monetary growth was half what it is right now. During this period, U.S. rare coins appreciated over 300% per year. Real estate doubled and them some. Art, antiques, etc., all enjoyed similar gains. Everything has a cycle. The bond cycle ended 1 year ago. Keeping your money in this area is risky. CDs are paying paltry