Success Business Fund

As adviser, we always spend hours reading materials – bullish and bearish stuffs, each day that force us to think outside our comfortprofessional investors from all over the world. Everyone is entitled to his or her own views and we can always be bullish or bearish on lots of things. zones plus we talk frequently to other

On the global economy, let’s try to be as realistic as possible here without all the hype. Almost everyone I spoke with said that, in general, the global economy is stabilization and growth is resuming in some places especially in the Asia region. That’s really good news. What is our thought about the V-shaped recovery in the US economy?

It’s a massive balance sheet recession in the Western world and an artificial growth pumped by stimulus cannot be sustained over the long-term. Also, debt levels in the US government have already reached a critical point. How embarrassing but those are the facts. So, there is no V-shaped recovery in the US and some other parts of the world are not going back to “normal”. That’s permanently gone. Period.

The world is a much more risky place financially after the meltdown in 2008 thanks to reckless government policies looking for quick fixes. After the meltdown in 2008, it will be difficult for central banks to rely on old economic models to boost real growth. This is especially true for those central bankers in the Western world.

As the hangover from 2008 continues, some new trends and events will develop which will be felt by many economically and socially over the coming months or years. The path to this “new normal” will be rocky. Some people will prosper and they will be making more money out of the hardship of others. Businesses will continue to evolve and some of us will be forced to make tough choices in our lives. As for the investment strategy, we continue to think that buy and hold investors will lose out more.

No one can predict the future but the big picture view here is that the future global events will put to bed all the common economic predictions and the past. Like it or not, the typical boom/bust cycles or theories will no longer work correctly. The governments in the Western world are sacrificing the future generations and just postponing the bigger problem until the new global crisis happens.

Any half-baked politicians on the planet will agree that we must never confuse the public with the hard truth if you want to stay in office as long as possible. Let the fools remain as fools forever. On this note, some of the local political and business elites who go around the town with bodyguards will probably not agree with the poor taxpayers that the crime rate in this “lah-lah” land is rising faster than the stock market. What fantasy land are these “high-class” people living in?

Like most other newly-elected leaders, Obama came in on a big mandate with fiery slogans. Obama as a poker player promised a real change to America and the rest of the world. What is clear to this adviser and analyst is that this garbage of an agenda of change has increasingly faded into emptiness. These days, it is Republican business as usual.

The Obama regime is taking a huge gamble. The US and other governments on the planet are hoping that an economic recovery will occur soon enough so that real consumption can catch up quickly. The coming second dip in the US economy over the coming months will be more devastating on those who thought we have seen the bottom.

It’s easy to give economists a hard time sometimes. Some economists who didn’t see it coming before 2008 can continue to argue that the gradual recovery will continue (in nominal terms) until the cows come home in the next morning. The realists could be looking for 15% unemployment or more in the US economy as one of the hints that things are finally bad enough for the new and simple realization to set in.

Is inflation or deflation winning the war? The bond and stock markets are giving us different conclusions but the price of gold is telling us something else. If the yellow metal can continue to go up from here attracting even more serious money, it is telling us that the rest of the things around us are merely an illusion financially that all the efforts so far to jump start the economic engine such as the low interest rates, quantitative easing, etc have all failed miserably.

Meantime, the music is back and is playing loud and we are still dancing on the ceiling plus the greedy bankers are still getting their big bonuses at the approval of the big governments and at the expense of the taxpayers. The economy is not the stock market. At the moment, governments are doing everything in their power to support stock prices to boost confidence.

Yes, the global economy and markets will never collapse completely because of the huge liquidity sloshing around and overvalued equities might become even more overvalued and standing in front of a freight train is never a good idea. However, at some point, the consequences will be significant and will dwarf the previous crash.

One should never argue with Newton’s Third Law. For every action, there is a reaction. Remember that China cannot save the world.

That is no fun. Those at the bottom of the economic ladder and the burned-out working class will always get hurt the most as usual in the next round of economic and market turbulence. The best and honest thing any governments on the planet can do is to talk less and do more and warn the ordinary folks who only read the mainstream media about the truth. Invest accordingly. We still operate in a sea of uncertainty.