The Korelin Economics Report
"Precious Metals Are
the Best Preventative Medicine for Economic Illness"
Al Korelin
www.kereport.com
Aug 7, 2007
Sitting on the beach here in
the Great Northwest on Whidbey Island, away from the telephones
and my office, gives me the opportunity to reflect on life without
any distractions. It is a time I really cherish and I hope that
all of you take a recess from your busy lives to do the same
thing.
In my life economic issues
play an important role and I spend a lot of time going over statistics,
reading economic reports and talking with experts in the industry
for the benefit of the listeners of The Korelin Economics Report.
Last Tuesday I learned that
consumer confidence in the United States was at a six-year high.
I found that to be interesting,
considering that the housing market is absolutely in the gutter
and going faster and faster toward the sewage treatment plant.
Also interesting, in that the trade deficit of our country is
at an all-time high. And, how about the fact that Americans are
now buying more cars from a Japanese auto maker that they are
from the folks in Detroit?
Ian Cooper of Taipan Financial
News (www.taipanfinancialnews.com)
wrote on August 3rd that, "I've long held the view that
housing won't show signs of recovery until 2008 or 2009, with
worst-case estimates pushing that back another year. But those
estimates are still dependent on what'll happen when an estimated
$1.1 to 1.5 trillion in adjustable rate mortgages face resets
this year, costing the average homeowner an extra $200 to $250
per month on a $2,000,000 mortgage." (That becomes even
scarier, when you think about the huge number of mortgages that
are way, way over $200,000.)
Cooper went on to write that
in July, General Motors' sales were down 19%, Ford's sales were
down 17% and Chrysler's were down 8%. Of all the cars sold in
the United States during July, 50.3% of the sales were of foreign
cars. Great news, huh!
I can go on and on. Consider
the low employment numbers in our country, the falling U.S. dollar
and our stock market that is trending downward in spite of the
"great consumer confidence numbers".
Forbes reported on August 3rd
that "The new employment numbers were worse than many economists
had forecast. The consensus was for employers to add 135,000
jobs and for the unemployment rate to stay at 4.5%. But an earlier
report from Automatic Data Processing, which processes about
one-sixth of American private-sector paychecks, put the new jobs
at 75,000. (Unemployment also increased to 4.6%.)
On the latest Korelin Economics
Report Weekly Show, which airs in thirty markets throughout the
U.S. and Canada and can be heard on the Internet at www.kereport.com,
I spoke with Dr. Michael Englund, the former Director of Research
for Standard & Poors and the originator of Action Economics
(www.actioneconomics.com).
(Action Economics is an excellent website for folks interested
in financial data and what that data means for the average person.)
I asked Dr. Mike why more people
were not concerned about the grim economic news. He said that,
first of all, the vast majority of Americans do not have a clue
about our economy. Secondly, and in his mind much more importantly,
is the fact that we are not necessarily headed for really hard
times. We could be, but in his mind that path is not a certainty.
I have always believed in preventative
medicine. When I was twenty-eight years old, I decided to do
all that I could to live a healthy and happy life. Consequently,
I started jogging everyday, I was careful about what I ate and
I began regular medical checkups. I knew that my later life could
go one of two ways. I would be either an active senior citizen
or I would be the guy who spent most of his time wishing he had
spent his prior thirty years taking care of himself.
My decision to take care of
myself has paid off. At the age of sixty-three, I still jog,
I carry my golf clubs when I play and I generally feel like a
much younger person.
I believe that everyone needs
to do exactly the same thing when it comes to his or her financial
life.
As Dr. Englund said, the U.S.
economy is at a point where it could go either up or down.
I say, do not take a chance
and take matters into your own hands.
As our listeners know, I personally
believe that the odds are greatly in favor of the economy going
down. That being the case I am a firm believer in investing in
both precious metals and in the securities of public companies
involved in that industry. Why do I say this? Remember that throughout
history precious metals have proven to be the best insurance
against economic disaster.
If history proves me correct,
I will not have to sue the University of Washington for teaching
me falsehoods. Everything that I learned there as a student of
economics will have proven to be true. I say that because the
indicators which, I believe, are pointing to economic hard times
will be correct. If not, then everything that I learned was completely
false.
For those of you who want to
hear the experts on economic issues, listen to our radio program
either on the air or by going to www.kereport.com.
Aug 5, 2007
Al Korelin
email: alkorelin@comcast.net
website: www.kereport.com
321gold Ltd
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