Are we about to fall off an even bigger fiscal cliff?
It's amazing the amount of information that is available on the internet, especially from economists who supposedly “predicted” previous recessions which therefore that means they must know what they are talking about now.
In fact this couldn't be further from the truth.
Take a look at my last 3 yearly blogs (2009, 2010, 2011) where I summarise the property experts‘ predictions about house price rises and in in every case bar none “experts” who perform well one year are way off the next. In fact, the most widely quoted pessimists (those who always predict 20% and 30% falls) are the ones the most widely quoted in the press. It's crazy!
As part of my continuing investment research and keeping myself up to date, I enrol and buy dozens of courses that are available on the internet. Some are great and other seem to be the deluded rantings of madmen. Either way, they all have their point of view and as you watch them in the moment you can almost fall for their arguments. The fact is, unless you have a strong grounding in economics (and more importantly, human nature) you can be forgiven for falling into their trance.
Most of these doomsayers seem to be American, but no matter their origin they're all preaching the same thing – the “empire in decline” – the coming of the greatest depression yet, along with civil unrest, 12% of the population on food stamps, still another million houses to be repossessed and various other horrific things that are going on. Gerald Celente is one such doomsayer who uses the term ‘greatest depression' (but his predictions are running a bit late).
The important thing to realise is that the UK is not the US so you can discount all this “data” to a large degree. While I certainly wouldn't encourage you to invest in the US, you need to understand that the UK is a very different landscape with a different economic reality. Not many of us remember back to the Great Depression of the 20s and 30s. It was an American thing and things certainly weren't as bad in the UK or Australia.
So are we really heading towards the greatest depression? Well no, we are simply seeing the decline of an empire. Just like Babylonia, Rome and Britain, now the US faces the same cycle playing out.
So if you end up on a US based information ‘opinion' website (or even a UK one) and want my opinion on the contents call the team on +44 (0)207 923 6100 and they'll be happy to pass it on to me to comment on.
Live with passion,