World Snapshot

In a CBS MarketWatch piece today you will find a warning of big shot Gary Shilling.  Shilling is great on the downside.

He notes, among other items, that Europe entered a recession last quarter, that Germany had a negative GDP last quarter, and that China is scurrying around as it sees trouble ahead (however, it is a drop in growth rather than a negative).

2012 was projected as one a major world-wide recession where the U.S. will not have as extensive a recession as one matching the U.S. in 2008.

I captured the chart below to simply catch what is going on. The ETF's listed represent, almost exactly, major stock exchanges.  It is a very good snapshot. It is like understanding your golf swing by seeing it in stop action rather than trying to judge it by one good drive.

Symbol	Price	Change	52-Wk
USA (SPY)	130.77	+1.11%	+3.08%
S. Africa (EZA)	65.18	+3.21%	-6.03%
Canada (EWC)	27.63	+1.25%	-10.43%
S. Korea (EWY)	55.21	+1.64%	-10.90%
Lat.America (ILF)	46.28	+2.82%	-11.45%
China (FXI)	38.32	+1.86%	-11.70%
Singapore (EWS)	11.78	+1.38%	-12.37%
Japan (EWJ)	9.26	+1.20%	-15.45%
Israel (ISL)	13.45	+0.90%	-17.87%
Taiwan (EWT)	12.33	+1.48%	-18.11%
India (IFN)	21.61	+1.12%	-30.98%
Russia (TRF)	14.70	+1.94%	-43.29%

The point of the exercise is to show, first, a current happy face in most markets, then, second, a horror face for the last 52 weeks.

In the U.S. the media promotes a happy face. Gee, things look good. (Not to worry even if Kodak is bankrupt and Google fell 8% yesterday upon a large profit drop.)

A quick look at the rest of the world demonstrates why the U.S. market was up. Where else are you going to go?

As it turns out, money will find somewhere else to live when the neighborhood is on fire. It will leave when the administration promoted future inflation begins.  Smart money will just leave; sleepy American money will devalue as it also loses principal in a 401k.

When you see a Treasury Bill auction generally ignored (and the last one was not a happy face), it is time to get out of the boat, buy ammunition, and store peanut butter.  Of course, the government runs a Ponzi scheme and they buy the bills to con others into thinking there is no problem. What eventually wins is the interest rate vs. risk (including inflation.)

When the music stops and everyone sits down, the your money (in dollars) will be left standing. It is inevitable. It is planned. On a really bad day, you will not be able to go into a bank, ATM, or other Big-Brother controlled financial system. (VP elect Biden predicted this was likely back in 2008!)

A typical trick, at this point, has been to revalue the currency without warning.

Recall the epigram about those who do not study history....