Protecting Yourself in the Worst Economic Recovery

in #fakerecovery7 years ago

Feel that the claim of a recovering and growing economy is all nonsense? Well you may have a point:

  1. At 2017, Labour Force Participation is back at 1970s level, when women were still hardly part of the workforce. The economy is transforming into a low wage gig economy but the statistics say that everything is ok.
    http://www.zerohedge.com/news/2017-06-04/us-jobs-market-much-worse-official-data-suggest-full-story

  2. US home ownership in secular drop from 69% in 2004 to 62.9% in 2016
    https://www.bloomberg.com/news/articles/2016-07-28/homeownership-rate-in-the-u-s-tumbles-to-the-lowest-since-1965

  3. Real inflation in the US has been in the range of 10% since at least 2012.
    http://www.chapwoodindex.com/

  4. Debt is back!! How about that, $7.8 tn more debt by US companies, debts are at record high again and students are struggling with their student loans so much so we have to write in discharge clauses because many will never pay back in their life times.
    https://www.ft.com/content/3215e960-3faa-11e7-9d56-25f963e998b2?mhq5j=e1

http://www.zerohedge.com/news/2017-05-07/crisis-has-become-pandemic-system-collect-defaulted-student-loans-no-longer-function

This is really just the tip of an iceberg. Look around in your daily life. Do you see things that don't make sense? As much as I'm proud of all the things that have been achieved, how the US is once again self sufficient in oil, the accomplishment of SpaceX, Google, AMZN in leading the world, these have been achieved at expense of unsustainable economics.

Government subsidies for renewables (Solar and ethanol) and eletric vehicles (Tesla). Wallstreet irrationality in sponsoring cash flow negative (since inception) shale and AMZN's 190 P/E ratio (was 500 at one point). And even in the heart of America industry in car ownership where car leasing has become cheaper than ownership for an asset that loses 10% of its value when you drive it out of the showroom!!!

We live in a world that is increasingly shaky in its foundations and in these circumstances, we need to create our own safety. To be sure we need to find out ways to profit from this debt tsunami. Chinese money has been chasing real estate in California, then to Seattle, Toronto and Ottawa. No doubt, this will move somewhere next. Pick a place where the Chinese are sending their children for studies, and load up property there with cheap non-recourse mortgage - and walk away if it goes underwater. Or how about looking at parts of the world that have been under developed but will become important as money all over the world tries to escape the debt laden economies? Kazakhstan has many low PE companies, how about Georgia? Even Turkey is laden with opportunities as the new gateway to the east with the strategic shift by developing economies (India, China, Russia) to look inland for trade.

Of course, those are things you can do to make money. If none of these things make sense, then perhaps it's best to start off with the basics. Pick up a book by Ludwig Von Mises or Rothbard about Austrian economics. Learn about the basics f the world, how stocks are analysed, how blockchain works and how import-export is profitable. As we learn about the concepts of how the world works, you'll realize that opportunities abound and protecting yourself is not a question of if you can do it but how you prefer to do it. Hope this helps.