 Saab Stories
October is the Cruelest Month
Tarek Saab
www.goldandsilvernow.com
Aug 25, 2009
"Saab Stories"
is a bi-weekly syndicated column presented by Tarek Saab, President
of GoldandSilverNow.
T.S. Eliot famously declared
"April is the cruelest month" in his poem, The Wasteland.
Apparently, Eliot was no stock investor. For those holding stocks,
it is October which has been the cruelest month. October 1929.
October 1987. October 2008 . . . Wasteland indeed.
If analysts like Robert Prechter
and the Elliott (not the poet) Wave theorists are correct, and
the 2009 market recovery is similar to the 61% retracement in
1930 following the '29 crash, then we are on the verge of a frightening
collapse. As Prechter notes in a recent interview: "What
I have been saying publicly is that the Dow could go below 1,000
which is a radical enough statement."
Could it happen? If history
repeats itself . . .
To put the above chart in perspective,
consider that the Dow did not fully recover its 1929 peak until
1953! The growth was so moderate, in fact, that the Dow did not
eclipse 1,000 until 1972 - and this occurred when the US economy
was production-based.
Still, in October 2007 the
Dow came within a hair of 14,000, representing 14x growth peak
to peak in 35 years from 1972 to 2007; a symptom of credit-induced
inflation and a bubble of unimaginable proportions. During this
period, our economy transitioned from one of production to service,
and through that process became entirely unsustainable. How
far can you stretch a rubber band before it breaks?
While the greatness of the
United States has faded faster than Harrison Ford's career, Tom
Clancy hero Jack Ryan lives on in cinema history, as does our
notion of patriotism, though even
Ryan never saw clear and present danger like what we are presently
facing.
Does the nation sense it? Could
a monumental crash be in the offing this fall? [more below]
The spectrum of national pessimism
varies depending on one's political credo; from the communists,
like our President, to the "Hannitized" and the Glenn
Beck fans, who still feed into the party line shouting "mega-dittos!"
and "You're Great American!" from Juneau to Tallahassee.
Hannity implores his base, "let not your heart be troubled!"
Easy for him to say. This once-great nation remains distracted
with the prospect of national healthcare while the economy languishes
in peril.
Those with little capital have
no choice but to weather the storm with a combination of precious
metals and US dollars. Those with money to invest are seeking
offshore safe havens. Outside the far right and the far left
moves a segment of investors looking beyond the pale of American
politics to growing worldwide sanctuaries.
Many Americans ask, where is
it any better than here? Truthfully, not too many places unless
you are a socialist, but there are oases where freedom is a way
of life and not a marketing slogan. Paraguay and Uruguay are
two countries drawing international investors because of tax
benefits (Paraguay's income tax is 0%), cheap land and labor,
political stability, and a variety of other merits. As free marketers
know, economic stability is never built on a mountain of credit.
Also, it is difficult for a central bank to control the population
when 90% of the people do not own bank accounts.
In the most recent issue of
Without Borders, the Casey Research spin-off, authors Simon Black
and Fitzroy McLean recommend holding 30% of one's investment
portfolio in "foreign productive real estate." They
define this real estate as "rental property or agricultural/forestry
which can also be used as your escape destination if things get
really bad at home."
Escape destination, indeed,
not only physically, but fiscally. For what good does it do to
flee the country if your money cannot make the trip? The existing
threat of foreign exchange controls, as I wrote in my last
article, is an ever present danger.
Foreign productive real estate
is crash proof and protective for two main reasons: 1. A producing
commodity will always generate income despite market fluctuations.
2. The United States government mafia simply cannot repatriate
foreign land. (And if the real estate does not produce, it is
exempt from US taxation as well).
It is time for another Jack
Ryan-sequel to Patriot Games. Clancy could call it Repatriate
Games, as in, protection from the government repatriating your
assets, which is happening to banking customers in Switzerland.
Or he could call it Expatriate Games, as in the six million Americans
who presently live outside the United States.
Either way, now might be the
time to begin thinking differently. For some, freedom never came
so cheaply.
Till next time, that's my Saab
Story.
P.S. I would be happy to assist
anyone with foreign investment contacts if you send me an
e-mail.
original
article: http://www.goldandsilvernow.com/resources/saab-stories/100-october
Tarek Saab
website: www.goldandsilvernow.com
email: tarek@goldandsilvernow.com
Tarek Saab
is a former finalist on NBC's "The Apprentice" with
Donald Trump. He is an international speaker, syndicated author,
entrepreneur, and the President of Gold&SilverNow.
321gold Ltd
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