The Truth? This is a DEPRESSION

DERIVATIVES WILL BITE U.S. AND U.S TAX PAYERS AGAIN


U.S. ECONOMICS

The current U.S. economic depression (as measured by industrial production) is the longest since the Great Depression of the 1930’s. And unemployment numbers are moving closer to depression levels each day.

Yet while the economic reality is clear, there is an unwritten convention not to call it a depression. Perhaps this is to avoid unsettling people and creating fear. But calling it by its proper name would at least be more truthful. And in these times when truth is sorely lacking in pronouncements by public figures it would be just what the market ordered.

We estimate that the current decline has longer to run. This is part of the reason we have focused our research away from the depressed parts of the world economy, such as the U.S., Europe and Japan. We prefer to focus on the growing parts of the world economy.


THE NEW GLOBAL ECONOMIC REALITY

We understand that it is not easy for a country to hear that, after a long time of being on top, they are becoming less important, powerful, or significant in the global marketplace. We sympathize with the plight of Americans, Europeans, and Japanese who are facing exactly this challenge. But from an economic data point of view, there can be little doubt that a new global economic reality is dawning. That reality is China, India and others are gaining influence and gradually the former big powers of Europe, Japan and U.S. are losing economic status.

Investors can deny this seismic shift in global economics and offer subjective one off examples of how this shift is not happening, they can dig in our heels and ignore the change, but none of these approaches will lead to investment success. Success comes to those who admit that change is happening and will continue to happen and will make the adjustments necessary to profit from the new reality.



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