According to Mark Nestman, Wealth Preservation & Tax Consultant and President of The Nestmann Group, there are 50,000 new lawsuits filed everyday in the US. The odds of every US resident being sued is 100% every 16.5 years!!! A study published in March, 2007, entitled “Jackpot Justice,” estimates that lawsuits cost the U.S. economy US$865 billion annually. This figure represents a yearly “lawsuit tax” of US$9,827 for a family of four. Pretty unbelievable!
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Posted in Investing on May 24th, 2007 5 Comments »
I mentioned in the previous post that I’m bullish on gold and that I think in the long term I think it will go up while the US dollar will depreciate. Generally, gold and the US dollar have a negative correlation, so if the dollar depreciates, gold will definitely go up.
I previously commented on some of the reasons why the dollar will depreciate, but another reason is that globally, less and less people want to hold it. Its a basic law of supply and demand. As the demand for something drops (while at the same time the supply increases) the value (both actual and perceived) for the product drops. In this case, the product is the US dollar.
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Most people think that since Gold was in a bear market for nearly 2 decades (between 1981 and 2000), its a poor investment. They also claim that its speculative, you can’t leverage it, and its highly illiquid. But none of these are really true.
In January 2000, Gold was trading at less than $300/oz. Today its at nearly $700/oz! Its been in a stealth bull market and not a lot of people have been talking about it.
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Posted in Investing, Currency on May 9th, 2007 7 Comments »
In the previous post on whether the US would experience a depression I said that this was unlikely, but that a recession accompanied by the devaluation of the Dollar resulting in inflation would be more probable.
What are the effects of inflation on conventional investments?
Inflation causes rising prices. It makes money less valuable. If the price of services and goods double, the value of your investments is effectively halved. It’s as if the prices had stayed the same, but you had just lost half of all your assets. Inflation reduces and can eventually destroy purchasing power.
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