The Time Of No Problem

"Look back at the economy in October 2007. The Dow was at 14,000. The banks were booming. Real estate was down a little, but the experts gave no warning. They were wrong. All of them.

When people refuse to face reality, because reality is going to be more painful than anything they have experienced, they look for signs that the problems they cannot avoid without changing are really not that bad. They look for offsetting good news.

We are watching the investment world adopting a lemming mentality that has always produced losses. "This time it's different. No problem."

Even hard-money newsletter readers are beginning to doubt that the recent good news is in fact "less worse than expected" bad news. This is the stuff of dreams that do not come true. 
Readers look at the reports, and the reports look awful: falling home prices, rising unemployment, an astronomical Federal deficit. But the media say we are close to a bottom – the bottom of a crash that none of them forecasted.

A Tsunami is coming. In such a scenario, you have got to get out of the water and off the beach. But few people ever do, unless they have seen a tsunami. Few have. 
Allocate some percent of your wealth to tsunami-avoidance. Do it quietly. Do not discuss this with your big-mouth brother-in-law. 

What do you really think is likely to happen? Not what you would prefer will happen. 
Think, "General Motors in October 2007" 
Think Chrysler, Merrill Lynch, and Lehman Brothers. 
No one saw it coming. It came. 
Problems. Big, big problems."

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