Don’t Buy Into the Euphoria – Financial Trouble Ahead

DOW Hits New HighsHi guys, Barry in DR.  DOW hits all time highsEconomy On Strong ReboundThings looking upInvestors rush back into the stock market.

Have you seen or heard these headlines.  Well, what about you?   I have had some pretty interesting conversations with friends and associates in the U.S. and this is what I am hearing from too many of them.  It’s amazing to me that otherwise smart people seem to have a long-term memory span of only about 4 to 6 years.  It is kind of funny and sad that that a 4 to 6 year memory span seems to parallel what happens in the economy.  Namely: cautious investment leads to gains which grow into euphoria and ultimately an all-in attitude followed by the inevitable crash leading to destruction of wealth and finally total dispair.  How many times do you have to watch the reruns before you wake up to the fact that the “end” of this story never changes.

Just in case you are one of those investors that find yourself slipping down that slippery slope of euphoria, maybe you should watch the 13 minute video interview of Jim Rodgers below. 

You probably remember Jim Rodgers from his Fidelity and fund days and the thousands of interviews he has given on various financial networks and publications.  This is the same Jim Rodgers that grew his Quantum hedge fund to a whopping 4200% gain in earnings over the course of the 10 years he co-managed it.  Imagine growing your savings and portfolio times 42.  Jim used to be a real bull.

Dow CrashesAs you will see in the recent video, Jim is not too upbeat on the US and European economies over the 2013-2014 period.  In fact, he predicts big trouble ahead and the charts of the 4-6 years economic cycles seem to fully support Jim’s doom and gloom predictions.

When Michael Maloney’s team discussed this in depth in the Wealth Cycle Principle publication, they summed it up like this:

Rogers also knows the world and its history, and recognizes the same old tricks being retried today. An astute investor, he led the Quantum hedge fund to a 4200% gain in earnings over the course of the 10 years he co-managed it.

Rogers also makes the very poignant observation that there are an average four to six years from slowdown to slowdown, citing 2002, 2007/08, and now 2013/14. Here is what that pattern looks like, plotted against the Chicago Federal Reserve’s National economic Activity Index

Chicago Fed National Economic Activity Index Chart 1967 2013

Originally from : Wealth Cycles

 

Of course Maloney continues to point to a gold based monetary system as the most probable long-range solution, but there are other things that rational people might consider….. just in case they don’t want to ride the next wave DOWN. Two things that the successful big money advisers consistently agree on are 1) Agriculture stocks 2) Owning productive farm land preferably in a country with minimal rules of infringement.

Gridlock!!! Damn it!!! Stuck in Traffic.At DR Escapes we are big proponents of spreading our risks and of establishing a “homebase” in a country where the shock of the coming financial collapse will be less of a shock.  Of course a worldwide financial collapse will be bad for everyone, but we believe that the “more prosperous first world countries” will suffer far more.  The citizens in those countries are not accustomed to “doing without” and there are a sizable minority of them that  simply will try to take what they can from others to avoid personal suffering.

That is one of the the reasons, when we went looking for a safe haven, we ended up here on the semi-rural north coast of the Dominican Republic.  There is no shortage of healthy fresh foods grown right here and sold cheap.  Also there is no shortage of fresh water from the mountains that run parallel to the ocean in this region.  Also, the people here know how to adapt and are comfortable without many of the first world luxuries.  There is little reason for them to rise up in violence if times were to get tough. We don’t see any difference in over 10 years! Can you say the same?

Playa La Boca Near Cabrera at La EntradaOf course those are some of the “safety” reasons we selected this place.  Equally important is the quality of life here.  Exceptional year round weather, some of the friendliest people in the world, a relatively low cost of living and some of the most beautiful uncrowded beaches in the world all reinforce that the Cabrera area on the north coast of the Dominican Republic was right for us.  Maybe it will work for you, or maybe you prefer some other safe haven… but seriously…. find your own safe  haven soon time is NOT on your side.

Sure, it will cost you something to set up your offshore homebase… but now is the time to do it while the stock market is cycling up into its euphoric high cycle.  Don’t be one of those unfortunate people that wake up too late and ride the wave through the next crash, only to say to yourself…. “Why didn’t we just cash in some of our gains when we had the opportunity and put it to work for our family”.   Unfortunately, the day after the crash is just “one day to late”.  I can’t tell you how many dozens of people have told me that they lost enough of their savings in the first days of the last crash to have easily purchased their own Cabrera oceanview home free and clear…. if they had just acted before the crash.   Of course, one reason is that oceanview homes down here are still affordable compared to similar properties on any other island or on the U.S. coasts.

If you are ready to allocate a portion of your gains out of the market before the crash, I would be proud to show you our little piece of paradise down here on the north coast of the Dominican Republic.  The easiest way to do that is for you to join us on one of our free Discovery Tours.  If you haven’t already, click the button below to see what a Discovery Tour is all about. Until next time this is Barry in DR and I’m out.

DR Escapes Discovery Tour More Info

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