Where will you position your money?

Positioning your money in the next 1 to 5 years in the proper investment vehicles is going to be critical if you want to be on the right side of the next great wealth transfer. Never has there been a time in history with such a great opportunity that we have in front of us today. This wealth transfer will be of one of such great magnitude that it will far exceed the wealth transfer during the Great Depression. I know this is a pretty bold statement, however all the evidence is there and the indicators that have continued throughout history that do not lie.

 

As we all know the United States economy is in complete shambles still to this day. Any gains in the Dow or in the economy is all an illusion with US government printing new base money (paper dollars) like it's going out of style. Now this same problem is not just occurring in the US but in many other countries throughout the world and this is truly a global economic problem that we have yet to see. Usually in past history if one currency was failing you could park your money in another to avoid losing all your wealth through hyperinflation when a currency collapses. However this is not the case today with so many currencies on the verge of collapsing.

 

Now in the last 200 years there has been $824 Billion dollars in base money created by the US government that are in existence and that was as of August 2008. 93% of the US currency supply has been created through fractional reserve banking. When the bailouts took place, the base money supply went up from $824 Billion to $2.2 Trillion dollars. In the last 24 months the US has created almost 300% more currency than in the last 200 years. Base money now accounts for 15% of the currency supply in the US. Because there's interest due on all the dollars we borrow into existence, we always have to expand the currency supply to keep ahead of the interest, or the whole thing collapses. (This is the definition of a ponzi-scheme). So how we pay interest is by creating new dollars to pay that interest back. Kind of scary when you think about it.

 

The consumer based portion of the currency supply has contracted from $13 Trillion, to less than $12 Trillion in the past 18 months. That is a contraction of more than 9%. There is no time since the Great Depression that the currency supply in the US has contracted. This is true monetary deflation, and it's happening right now! This is the signal that the wealth transfer is upon us.

 

There are giant real estate bubbles all down the west side of the Pacific right now... China, Singapore, Australia, New Zealand and when these bubbles begin to pop, causing worldwide deflation, which will cause the governments to overreact, and print more money. The governments will print and print until there's so much base money around the world that people will feel comfortable to start borrowing again. Once they've printed their way out of deflation and the economy starts to expand again, there will be so much base money that we'll go into hyperinflation. Even if the government shuts off the printers. Severely devaluing the currency and the purchasing power of a dollar.

 

We have just been through the biggest initial stock crash market crash in history, which was 56%. Now the "dead cat bounce" (the rebound in the stock market when all the investors jump in and buy up the "deals" when the market takes a big crash. These are usually short lived due to this being a short influx into the markets) was also the biggest in history, recovering to 62% of the loss and now the market is headed back down. The rest of the crash will also be the biggest in history, which means the total loss should be greater than 90% where it was in 2008 at 14,000 (The Dow). So we should see the Dow going to less than 1,400 in the near future (12 to 60 months).

 

Now the next big bubble is going to be gold and silver. Both of these precious metals are extremely undervalued today. Silver is even more undervalued than gold for the first time in history. Now is the opportunity to buy these assets and ride the wave until the key indicators come into play to sell gold and silver, as they will be the next bubble to burst. This is when the greatest wealth transfer in history will occur and those who position their money properly will reap the greatest benefits. Once you cash out of these precious metals, you will be able to obtain many great cash flowing assets such as real estate and dividend stocks at rock bottom prices that will provide you with passive income for life!

 

I am not a financial advisor nor do I recommend that you go out and buy a whole pile of gold and silver today. However this is what I will be doing and focusing on and where I will be positioning most of my money in the next 2 to 5 years. Where to position your money is strictly my opinion and I am not advising anyone to do the same. However the key indicators of what is coming and where the greatest wealth transfer will occur are as clear as day to me.

 

Remember, "Wealth is never destroyed, it is merely transferred." Quote from the book "The Great Economic Disorder" by Larry Bates.

 

Be committed to your success.

 

Derek Wilson

Real Estate Investor and Educator