Fiscal Cliff Boogie Man: Political Theater and Distraction

by Jay D. Ahlbeck, President, JDA & Associates

Do not be surprised if Democrats and Republicans hold hands and jump off the “fiscal cliff” together.  There will be gnashing of the teeth, wailing in the streets and markets will swoon. Those living off government largess will scream like stuck pigs and rich people (however you care to define that) will say they will not play with poor people anymore if their taxes are going to be this high. Rice bowls will appear to be broken, but not really.

Going over the cliff makes political sense. The resulting higher taxes and draconian spending cuts, will allow both parties to compromise and claim victory. Democrats will take claim to increasing “investments” after the newly imposed cuts and the Republicans will claim that they have reduced taxes from the newly imposed levels. 

We all give a heavy sigh of relief, everyone is happy and nobody losses. Right?

After “Fiscal Cliff” get ready for its sequel “Son of Fiscal Cliff”, the coming “debt ceiling” debate.  The sad truth is that what goes on in the local mall this December is likely more meaningful than the actions in Washington, so I suggest that investors try to close their eyes as the next few weeks are going to be ugly, but before Spring has arrived this too will pass.  Between now and then, expect ugly.

Gold and Standby Generators

by Jay D. Ahlbeck, President JDA & Associates

Ronald Regan is quoted as saying, “Do not be afraid to see what you see.”

Following hurricane Katrina we all watched aghast as storm victims fended for them selves. A year later, in 2006, there was a week long blackout in Long Island City, New York where people were left without electricity in the scorching July heat just because the grid and the power company failed.

I installed a 17K natural gas back-up generator that automatically runs our house. At the time, there was no imminent threat but the increased probability of long- term outages was obvious. The generator sat there for 5 years doing nothing, then Sandy knocked our lights out for 13 days.

Gasoline immediately became scarce and even personal security was a concern. The cost of that generator had little or no impact on our family, but having the generator for Sandy sure did.

In life, and in investing, we are playing a game of probabilities.

Since 2007 we have all witnessed a series of events in financial markets that are similar to the red flags presented by hurricane Katrina, and the Long Island City power outage.  You cannot deny that our government failed after Katrina.  Citizens of Long Island City, NY, know the electric grid cannot be relied on and you cannot deny that something is very wrong with the global financial system. But if human nature wasn’t as it is Ronald Regan would not have had to remind us not to be afraid to see what we see.

Please view the Fifteen Percent Solution™ video to understand why gold and silver are like a financial standby generator. 

Gold and Standby Generators

Ronald Regan is quoted as saying, “Do not be afraid to see what you see.”

Following hurricane Katrina we all watched aghast as storm victims fended for them selves. A year later, in 2006, there was a week long blackout in Long Island City, New York where people were left without electricity in the scorching July heat just because the grid and the power company failed.

I installed a 17K natural gas back-up generator that automatically runs our house. At the time, there was no imminent threat but the increased probability of long- term outages was obvious. The generator sat there for 5 years doing nothing, then Sandy knocked our lights out for 13 days.

Gasoline immediately became scarce and even personal security was a concern. The cost of that generator had little or no impact on our family, but having the generator for Sandy sure did.

In life, and in investing, we are playing a game of probabilities.

Since 2007 we have all witnessed a series of events in financial markets that are similar to the red flags presented by hurricane Katrina, and the Long Island City power outage.  You cannot deny that our government failed after Katrina.  Citizens of Long Island City, NY, know the electric grid cannot be relied on and you cannot deny that something is very wrong with the global financial system. But if human nature wasn’t as it is Ronald Regan would not have had to remind us not to be afraid to see what we see.

Please view the Fifteen Percent Solution™ video to understand why gold and silver are like a financial standby generator. 

Please view our recent video that explains the financial crisis and what you should do about it at:

 www.15percentsolution.com