Friday, May 1, 2009

Martin Weiss: A DEEP Depression is Unavoidable

(snippet)
Norman: Hopefully after this program, it will be. So the book is titled “The Ultimate Depression Survival Guide.” We discussed it a little bit. You’re obviously worried about things that might happen … the situation’s looking pretty scary for lots of people right now. What you’re saying ... look, if we go into a bad period, there are things you can do, there are things to protect yourself. That’s what you talk about in the book. Let’s get a little bit of an overview.

Weiss: Well, first of all, whenever you see a government-inspired intervention, a government-inspired rally in the stock market or a recovery in the economy, to me that’s an opportunity to get out.

Norman: Really?

Weiss: That’s an opportunity to do what you wish you had done in 2008 before the stock market tanked. It’s what you wished you had done with your real estate properties before the real estate market collapsed.

Norman: But what if you had done that, though? Let’s look back in history. It seems from that statement that you just made, you are averse or you view government intervention as a backstop, as a countervailing force in an economic downturn – you see that as bad. But what if you would have gone against that in the 1940s? You would have lost a lot of money.

Weiss: Oh of course. It depends on time. I’m saying in this era, in the beginning of the 21st century, we are in a decline, fundamental decline that’s going to continue, but it’s not a straight-down move, just like any market. Therefore, when you have a countermove, that’s your opportunity to sell; that’s your opportunity to reduce your risk and build cash. Now we have, because the government has done so much, and I know you’re in favor of that ...

Norman: I am.

Weiss: ... but precisely because the government is doing so much, you may have a bit of an uptick, but I don’t see it as a change in trend. I think that a depression, a deep depression is essentially inevitable and unavoidable. Let me explain what I mean by a depression. A depression is a multiyear decline in the economy, bring massive unemployment and delivering widespread financial losses to the majority of the population.

Norman: All right, but by that definition, we’re already in it.

Weiss: Exactly my point. You guessed what I was about to say, and it’s that we’re already in it, but there’s no sign that’s it over yet. There’s a lot of hope that it would end prematurely, but I don’t think it will, and I’ll explain why.

Norman: Now, things are bad; I’m going to let you explain why. But just from the standpoint of observation, things are bad; there’s no question. Twelve million people have lost their jobs in the last year, the stock market has experienced one of the worst declines in history, not just here but around the world. We have a massive credit crunch and problems in the banking system. Yet when you walk around here in New York and other places around the United States, you don’t see soup lines, you don’t see the sort of visuals that we at least read about from the Great Depression.

Weiss: We’re not there yet.
Full Interview here
Part 2-May 5th
Link

5 comments:

  1. Thanks for the much needed information.

    The mainstream news media and all of their economists say the worst is behind us but really is it? My opinion is we have not really seen anything yet.

    You see the stocks rallying for almost 2 months and I now believe that is manipulation by the working group on financial markets(plunge protection group).

    Government inspired rallying leads to economic disaster.

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  2. I agree that we haven't really seen anything yet. It's like we are seeing foot high waves come upon the shore when further out there are waves that are miles high. When they come it will get bad. What's coming will make the great depression seem like a time of great plenty.

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  3. Your a cheap ass snake oil sales person.

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  4. Reference : I agree that we haven't really seen anything yet...

    Well, I not inclined to say we have not seen anything yet.

    We have seen dramatic unemployment gaining momentum, large banks claim insolvency, witnessed large numbers of homeowners foreclose, and shortly domestic auto maufacturers will collapse. I would say all these events are at least noteworthy.

    But, seriously, yes you are correct, it will be grim. The underlying fundamental problem has not been addressed. Massive consumer and government debt. Debt that has absolutely no chance of being repaid.

    There are two options. Default on the debt or continue printing currency.

    Both options will result in disaster. Guaranteed. That will be something you have never seen in your lifetime.

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