Below are the major reasons why the U.S. dollar has steadily lost value for decades now and is now teetering on the brink of survival:
(1) The death of the gold standard in 1971 when all controls on monetary expansion were lifted and no sane controls against unlimited monetary expansions were instituted;
Recently a bill to bailout Fannie Mae and Freddie Mac was overwhelming passed by both branches of the U.S. Congress, the House of Representatives and the Senate U.S. Congress. It is expected that President Bush will sign this bill into law almost immediately. Because U.S. Senator Ron Paul deftly explains the impact this bill will have on the already sick global financial world, I’ve merely posted the video link below.
I have outlined some of the important points of U.S. Senator Ron Paul’s speech along with my own commentary here:
(1) The housing bill, the “mother of all bailouts” has removed all U.S. Congressional oversight and handed the power to administer this unlimited line of credit to the U.S. Treasury as requested by former Goldman Sachs CEO and current U.S. Secretary of Treasury CEO Hank Paulson.
There are two rules that every investor should abide by not only in volatile markets, but in any type of market: (1) Keep your losses small and cut your losses early and (2) Let your profitable investments ride. So why is it so difficult for the average investor to abide by these rules? With so much information so easily accessible today, the internet was supposed to level the playing field between the big boys and the small retail investor. It has, but conversely and unfortunately, it has also provided a medium for the big boys to mercilessly manipulate the inexperienced retail investor into making poor investment decisions as well. Read more …
If you’ve suffered stock losses this year, this will be the most important article you will read. Back on April 23, 2008, I wrote an article called “Will the U.S. Markets Crash Now – Or Later?” and I opened the article with the statement: “Every time I’ve written about the imminent disaster that awaits U.S. stock markets, and subsequently global markets, the response has been overwhelmingly negative.” In that article, I further stated, “People seem to forget one central and critical point. Most people seem to believe that they have to lose a great deal of money when crises materialize and forget that it is absolutely possible to prosper during crises as well. Read more …
In the 18+ years I’ve been involved in finance, I’ve seen a common thread among investors during bear markets that is extremely detrimental to their financial future. The syndrome I’ve seen afflict many investors is similar to the psychological state that University of Pennsylvania world-renowned psychology professor Dr. Martin Seligman coined “learned helplessness.” This condition is more pronounced in investors that have had their money managed by a large commercial investment firm for many years but often afflicts those that self-direct their investment portfolios as well.
Whenever I’ve spoken to investors that have their portfolios managed by large investment firms after a period such as the past 12 months when many investors world wide have lost 20%, 30% or even 40% of their portfolio value and ask them what they are doing to repair the damage, more often than not, they have replied, “Nothing.” When I have asked them why they would do nothing when they have lost significant portions of their wealth, they always state that their advisors inform them that long-term markets always rise higher, so if they just hold on, they should recoup all their losses over the next several years. In many facets, this response is very similar to the condition of “learned helplessness”. Investors believe that the commercial investment firms are the experts, that they should listen and blindly follow them, and that they don’t have a choice in this matter because they often tell themselves, “I know nothing about investing.” Read more …
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About
J.S. Kim is the Founder & Managing Director of SmartKnowledgeU™, LLC. He attended the University of Pennsylvania, and received a double master in Business Administration and Public Policy from the University of Texas at Austin. Read more...
