2010: The Best of Times or the Worst? – Robert Kiyosaki
“It was the best of times. It was the worst of times.” - Charles Dickens
Is the recession over? Are happy days really here again? Paraphrasing Dickens, my answer is, “For people who are prepared, 2010 will be the best of times. For many, 2010 will be the worst of times.”
The following are a few of my predictions and reasons behind them :
Prediction #1: The real estate market will crash again.
Pictured above is a graph of mortgage resets. In simple terms, a mortgage reset is when a mortgage comes due. In normal times, refinancing was a simple process…but these are not normal times. Some points of interest:
1. In September 2008, the mortgage resets hit $35 billion that month. That was the exact time the financial crisis hit. When people could not afford to refinance and began to default, the stock market and banking industry crashed.
2. The eye of the storm: In the summer of 2009 mortgage resets were low — around $15 billion a month. This is when optimists began to see “green shoots” in the economy. The green shoots were the eye of the storm. In 2010, as I see it, the second half of the financial hurricane hits. By late 2011, the resets climb to nearly $40 billion a month. The storm will not end until 2012.
3. The first half of the storm was primarily due to subprime defaults. The second half of the storm will hit more solid homeowners. The question is, can they weather the storm? Will Mac Mansion foreclosures be next?
4. In America, there are over 40 million people who own more than two homes. Can they afford to carry and refinance two or more mortgages?
5. Since home values have gone down, many homeowners will find they owe more than their home(s) are worth. Will the bank be kind to them?
6. The time for using your home as an ATM is over. This is crushing retailers and retail real estate. Shopping centers are in trouble. Strip malls are empyting as shopkeepers close — permanently. This will lead to the crash of the office, warehouse, and other commercial properties.
My prediction: Obviously these are the best of times if you are a buyer of distressed properties and the worst of times if you are a seller.
Other things I am watching for in 2010:
1. Will China crash? America’s crash has hit China in the gut. The Chinese are laying off millions of workers. Only massive government bailout is keeping the economy afloat. The Chinese boom will eventually go bust…but will it bust in 2010? Only time will tell.
2. When America stopped importing from China, China stopped importing from the rest of the world. This affects Asian countries as well as Australia, Brazil, and other suppliers of raw materials.
3. Fed Chairman Ben Bernanke is replacing toxic debt with new debt. By protecting his friends in the mega-banks, he is turning the U.S. into a zombie nation. The recession is over, but America is entering an era we will be calling The New Depression, a period when the rich become extremely rich but everyone else becomes poorer. Taxes will kill anyone working for a paycheck.
4. The U.S. dollar will grow weaker. If the dollar strengthens, we will have more unemployment because our goods become too expensive and we will export less.
5. The deficit will increase. The bailouts for the rich are killing the economy.
6. Israel may attack Iran. Israel will not tolerate Iran developing nuclear power, even if Iran claims it is for peaceful purposes. If there is an attack, oil prices will go through the roof.
7. Dead cat bounce. The current stock market rally will probably turn into a dead cat bounce. If the Dow drops below 6500, 5,000 may be the next stop.
The Best of Times
I know I sound painfully pessimistic. I know my predictions are bad news for most people. Yet, for others, bad news is good news.
The following are the bright spots for people who are prepared.
Prediction #2: Gold, silver, and oil will continue to be safe investments in 2010.
The following recaps the year-end prices of gold and silver:
YEAR GOLD SILVER
2000 $ 273 $ 4.57
2001 $ 279 $ 4.57
2002 $ 348 $ 4.78
2003 $ 416 $ 5.92
2004 $ 438 $ 6.79
2005 $ 518 $ 8.80
2006 $ 638 $12.78
2007 $ 838 $14.77
2008 $ 882 $11.33
2009 $1100 (approx) $17.50 (approx)
In 2009, the Dow rose approximately 18%. Gold rose approximately 25%. Silver rose approximately 50%.
By the end of 2010, I predict gold will be at $1,775 an ounce, silver at $24 an ounce, and oil at $85 a barrel. If Israel attacks Iran, these predictions will be blown away.
Prediction #3: The next market to crash will be commercial real estate.
Cash flow positive real estate will be even more affordable. 2010 through 2012 will be a real estate buffet for those with cash and access to credit.
My Personal Investments
As I stated in 2002, “You have up to the year 2010 to become prepared.”
The following are things I have done to prepare myself:
1. I started The Rich Dad Company in 1997 because I saw this crisis coming. For the past three years, I have tightened internal controls and prepared for global expansion via a franchise distribution system. The company is debt free with strong income.
2. 2009 was my best real estate year to date. With the Fed handing out large sums of money and pension funds looking for projects to invest in, my real estate holding company has acquired tens of millions of dollars for acquisition of bankrupt properties and development projects. Development projects are affordable again, as labor, material, and land costs are low and the government is generous with 40-year, low interest, non-recourse loans. People still need a roof over their heads.
3. My oil development projects have done well. We drilled three wells and hit oil on two of them. Government tax breaks for oil exploration remain generous, even for dry holes. Even if the economy crashes, we will still burn oil.
4. I took 90% of my money out of the stock market in 2007. If the Fed raises interest rates, the stock market and real estate market will collapse.
5. I loaded up on gold and silver between 1996 and 2004.
6. With the Fed printing trillions of dollars, cash is trash and savers are losers. As soon as I have excess cash I invest in oil, real estate, gold, and silver.
7. In a zero-interest-rate environment, debtors are winners…but only if you have good debt…debt that’s paid by tenants.
In Conclusion
A few years ago, Japan was ‘King of the Financial World.’ Japan’s economy was the world’s second largest economy — till the bubble burst in 1990. Japan’s budget went into deficit in 1993. Since then, the deficit has averaged 5.4 percent of GDP per year. As a result, Japanese government debt is now 200 percentof GDP today. The U.S. is following Japan, and China will follow the U.S.
We will not see much inflation because the Fed is not able to print enough money to replace the losses from the burst of the credit bubble. Also, factories have too much excess capacity due to lack of demand, which means prices for consumer goods will remain low and unemployment will remain high. Instead, we will see inflation in gold, silver, oil, some stocks, some real estate sectors, and food — not because values are going up but because the dollar is going down.
Welcome to The New Depression. And may these times be the best of times for you.
Source: Yahoo Finance
Disclaimer: Please be informed that the above mentioned stocks/indexes/investment instruments are solely for the purpose of education; it is NOT a recommendation or an invitation to trade/invest. For trading/investment advice, please speak to your remisier, dealer representative or financial adviser. Please understand that there is risk in every trade/investment venture, know your risk first before you venture into any of them.
T3B India Mentor Clinic 13th-15thNov 2009
T3B India, Mumbai office is nice, bright and cosy; a good place to breed and groom good, successful T3B traders 
Me and Mentor Eileen reinforcing T3B rules and sharing our experience in using T3B System during preview, mentor clinc session and course. Follow the rules, follow the rules and follow the rules
We and the T3B India team. From left: me, Mentor Eileen, Mentor Prakash Chugh, Mentor Hussain and Coach Dr. Burhani Shoeb.
It is not all work but no play. We went to visit National Stock Exchange(NSE), 1 of the 2 stock exchanges in Mumbai. The other stock exchange is Bombay Stock Exchange(BSE), which is also located in Mumbai, the financial hub of India.
This is going to be the world’s most expensive home called- ‘Antilia Residence’ , built by Mukesh Ambani, the Chairman of Reliance and India’s richest man. At a cost of US$1 billion, Ambani’s 27-storey tower — complete with helipad on top — dwarfs the next most expensive home, both financially and in stature. Becasue each floor is double the average height, Antilla will technically be 60 storey tall even though it only has 27 floors. Forget about going to the gym — the Ambanis will have their own health club. And their friends can drop by in droves because the 6-floor garage can hold 168 cars . The tower will be 570 feet tall, and mostly glass. The ultra-modern mansion will feature panic rooms, a movie theater and a staff of 600 servants! The towering house isn’t too disconnected from nature as each level will have lush gardens!! WOW!!!
It was a lovely trip whereby we got to meet the T3B India family members and shared with them our experience of trading with T3B System. I also have the 1st-hand opportunity to witness the emerging of an upcoming economic powerhouse-India, as it continues to grow at 6% in 2009. It’s 1 billion population, the 2nd largest in the whole world, means that it has a huge enough domestic consumption to drive its economy as it continues to improve its infrastructure to prepare for its very bright future.
Cheers
Jim Rogers: U.S. Government Spending Is Like Tiger Woods Dating
Jim Rogers, chairman of Jim Rogers Holdings, shared on CNBC on a wide range of issues ranging from the FED chairman Ben Bernanke, Timothy Geithner, gold, silver, copper, commodities, agriculture, U.S. dollar, Yen, Swiss Franc ..etc. Jim Rogers for the first time says that he is temporary bullish on the U.S. dollar because there might be a rally soon. He confirmed that he is not buying nor selling any gold at this point but he might buy some more if the gold goes back again to US$1000/ounce. Jim Rogers does not see any bubble in the gold at this stage because he says most investors still never owned any gold…. He also mentioned that he prefers silver and palladium to gold because silver is still 70% below its all time high. Jim Rogers is as usual still very bullish on agricultural products and commodities.
Source: CNBC
Helicopter Ben
Federal Reserve Chairman Ben Bernanke, whose academic research when he was a professor of economies at Princeton was on Japan’s recessionary woes, in his now infamous speech in 2002, talked about dropping money from helicopters if need be to prevent an economic downturn such as the one Japan experienced. He revealed how far the Fed is prepared to go to prevent deflation. His solution is to keep throwing more and more currency, NOT money, at the problem. Isn’t that what he is doing right now?? Printing SO MUCH U.S. dollars to get U.S. out of the BIG MESS that it is in?!! This continuous devaluing of the greenback will in turn drive up the prices of gold, silver and other U.S. dollar-denominated commodities.
Global Market Outlook For Week Beginning 9th November 2009
Straits Times Index(STI) was well supported at the 2600 level, indicated by the uptrend line drawn. It should be retesting the stubborn 2746 resistance level after piercing through the 2700 once again. If 2746 can be broken successfully, the forward momentum should bring STI towards the 3000 mark before the end of the year.
After breaking out from the 2600-3000 consolidation range, Shanghai Stock Exchange(SSE) is now trading within the uptrend channel shown. Technically, it should be testing the 3478 ceiling, based on the upside target projection. Now, SSE is the leading indicator for global stock markets, taking over the leadership baton from the U.S. market.
Hang Seng Index(HSI) will soon be testing the 22,620 resistance level, attained on 23th October. If this barrier can be penetrated with the help of positive move from SSE, HSI will have the potential to reach the 23,368 level before the close of 2009.
Jakarta Composite Index(JCI) fell off the cliff and experienced a 13% decline within 2 trading weeks. The 2271 support level succeeded in cushioning the drop and JCI has since rebounded from that level. If it can push through the 2259 resistance level, the next ceiling for JCI will be the 2774 region. But if it fails to do so, there lies the danger of the formation of a Head-and-Shoulders chart pattern. If the 2271 were to be penetrated later on, JCI can be expected to experience further weakness.
Bombay Stock Exchange(BSE) SENSEX is also one of the best performing market in Asia, together with SSE, HSI and JCI, after registering a whopping 117% rally from the early March low!! After hitting the high of 17,493 region on 17th October, it plummeted 14% before it found some footing at the 15,600 support level. If it has the strength to break the ceiling of 17,493 level, the next overhead resistance will be at the 17,736 mark. 15,600 will provide the necessary underlying support, but if it were to be broken, we may see SENSEX decline to the 14,700 region.
Kuala Lumpur Composite Index(KLCI) seems to be enjoying a pretty good bull rally, bouncing along the uptrend line obediently. If it continues to perform accordingly, its next 2 resistance levels will be at 1276 and 1305 respectively. 1231 should act as a good support level to prevent any further decline.
S&P 500 rebounded from the 1019 support region, staged a powerful run-up and is now preparing to test the 21st October high of 1101. The next target for S&P 500 will be 1168 if it can penetrate this 1101 level successfully.
If NASDAQ can punch through the 2190 resistance level, it will complete a Double Bottom chart pattern, which will propel it to hit the next target of 2318. At this point of time, 2040 looks like a good support for NASDAQ to repel any further weakness.
Dow Jones has remarkably penetrated the 10,000 full number mark! But the worrying thing is that this was achieved with declining volume, as illustrated by the volume bars at the bottom of the chart. This shows a lack of institutional buying. Technically, it has the potential to hit 10,683 objective while its downside will be supported at the 9,630 level.
Will there be a Christmas Rally this year?? I definitely hope so! Let’s all party and enjoy while the going is good. Some green shoots are slowly turning into yellow weeds, eg. U.S. unemployment rate in October was a staggering 10.2%, 120th bank have been closed down since the start of 2009 in U.S….etc. Will 2010 Tiger Year turn out to be a good year for the global stock markets? Personally, I doubt so. Nevertheless, let’s all enjoy this rally as much as possible before more ugly events start to appear next year.
Cheers
Disclaimer: Please be informed that the above mentioned stocks/indexes/investment instruments are solely for the purpose of education; it is NOT a recommendation or an invitation to trade/invest. For trading/investment advice, please speak to your remisier, dealer representative or financial adviser. Please understand that there is risk in every trade/investment venture, know your risk first before you venture into any of them.
Foreigners Accounted For 22.7% of Singapore Private Home Sales in 3rd Quarter 2009
Foreign buyers are streaming back into Singapore private home market. They accounted for 22.7% of private home sale in 3rd Quarter 2009 – above the 19.7% average since the start of 2000.
Chinese buyers have dislodged those from India for the No. 3 spot in the rankings this year with a contribution of nearly 15% of the total foreign purchasers. This puts China just behind Indonesia in the 2nd spot and Malaysia at No. 1. In the past 2 years, India had been in the 3rd spot, but it has slipped to 4th placing.
About 54% of the purchases by China buyers were for resale homes. Like Malaysian buyers, they tend to prefer homes priced between $500,000 and $1million. one-fifth of them bought homes costing $1.5million to as much as $5million.
Indonesians tended to go for higher priced projects, particularly those priced $1.5million to $5million. They like properties located at Novena, River Valley and the Singapore River.
Recent data showed that foreigners who are not permanent residents tend to buy more pricey projects. The most popular project sought by foreigners was Sophia Residence, a project launched in July. Then came Caribbean at Keppel Bay, Ascentia Sky, One Devonshire and Viva.
Source: URA and Savills Research & Consultancy
I.O.U.S.A. – One Nation. Under Stress. In DEBT.
U.S. IS IN VERY VERY SERIOUS DEBT PROBLEM!!! It has 4 serious deficits, namely: Budget, Saving, Trade and Leadership Deficits. Take a look at the 30 minute documentary below and you will understand why the days of U.S. been the world’s most powerful economic nation are numbered and we are seeing the giant slowly bleeding to death right in front of our eyes…………
Frank Holmes: Gold May Hit US$2,300 In the Long Term
Frank Holmes, CEO of U.S. Global Investors, said that Gold may go up to US$2,300 in the long term. We should always view Gold and Silver as a hedge against inflation and preservation of our wealth, rather than wanting to make big bucks out of them.
Disclaimer: Please be informed that the above mentioned stocks/indexes/investment instruments are solely for the purpose of education; it is NOT a recommendation or an invitation to trade/invest. For trading/investment advice, please speak to your remisier, dealer representative or financial adviser. Please understand that there is risk in every trade/investment venture, know your risk first before you venture into any of them.
Michael Maloney: Where Are We In The Gold Cycle?
Michael Maloney is the author of “Guide to Investing in Gold and Silver”, part of Robert Kiyosaki’s “Rich Dad’s Advisors” series of books. Since 2005, he has been the precious metals investment advisor to Robert Kiyosaki, author of the most successful financial book in history, “Rich Dad, Poor Dad”. He has also had the privilege of interacting with influential government and economic leaders, such as Congressman and Presidential Candidate Ron Paul. In the below video, Michael Maloney examines where we are in the gold cycle, how far along are we……..
Source: GoldSilver.com
Disclaimer: Please be informed that the above mentioned stocks/indexes/investment instruments are solely for the purpose of education; it is NOT a recommendation or an invitation to trade/invest. For trading/investment advice, please speak to your remisier, dealer representative or financial adviser. Please understand that there is risk in every trade/investment venture, know your risk first before you venture into any of them.
Marc Faber: U.S. Dollar Will Eventually Go to “Value of Zero”
Marc Faber, publisher of the Gloom, Boom & Doom Report, appeared on Bloomberg, stating his view on the inflation/deflation, strong and weak US dollar debate. According to him, during inflationary periods, the losers will be cash and treasury bond; the winners will be foreign currency, commodities and equities have some power to hedge inflation.
Source: Bloomberg
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