What The Road To Ruin Will Look Like
As I depart from this country whose foundation is built on a stack of cards, I will resume writing after I settle in at my residence in Australia. I will continue to post updates in regards to the coming currency crisis as well as new investing ideas should the opportunity present itself. Before I leave however, I would like to do two things. I am going to make a few predictions as far out as 2015, mostly because I would like to have this on record as I hold strong conviction for the accuracy of the topics I discuss. Secondly I would like to compose two 10-20 stock portfolio's aimed towards wealth preservation as the storm approaches. It is not to late to do so as we are only the 2nd or 3rd inning of this crisis and have yet to feel any real consequences from the governments fiscal and monetary abuse dating back to the Bretton Woods agreement.
1) Inflation will begin extremely slowly in Q4 2009, and will not be addressed by anyone as any type of inflationary threat whatsoever. I expect this trend to continue for the first half of 2010 as well, with a minority group that will question and think something isn't right. In 2H 2010, i expect moderate inflation 4-6% or so to show itself, accelerating quickly towards the end of the year reaching 10% (give or take).
2011 will mark the beggining of the end concerning the viability of our currency as Inflation will be over 15%-25%, increasing each month, especially Q4. It will be 2012 that will bring down the dollar to its knees, expecting inflation between 30%-0% by the summer (measured on an annualized basis). The second half of the year will average 100% inflation (annualized of course). This is as far out as I am willing to predcit, but will make forecasts every 6 months or so. In other words say a loaf of bread costs $5 currently, then according to my forecast by the end of 2012 this same loaf would cost $20 or more. The optimistic side of me would forecast by the end of the coming inflationary era (if we can avoid a complete collapse), I expect price to increase 6 to 8 fold. So that loaf of bread would cost $30-$40. On that note Gold will reach $4800-$6400. Silver would thus be between $90-$120.
A 28 soon to be 30 Stock Potrfolio:
SilVER EQUITIES- (Silver Wheaton,Silver Standard Resources First Majestic Silver)
GOLD EQUITIES - (Agnico-Eagle mines ,Yamana Gold ,Jaguar Mining , Aurizon Mines, Royal Gold , Franco Nevada)
OIL EQUITIES- (Canadian Oil Sands ,Canadian Natural resources,Suncor, Pennwest energy trust Units(removed) , China National Oilfields, Petro-Bras, New Zealand Oil & Gas, Transocean, National Oilwell Varco )
WHEAT/POTASH/FERTILIZER - (ABB Viterra ,Migao ,Nufarm, China Blue Chem, Incitec Pivot Limited, Potash, Hangfeng Evergreen, China Modern Agriculture(Removed), First Potash(now removed), Mosaic)
OTHERS TO WATCH: Genzyme, China Railway Group, Hopewell Holdings, Denway Motors, First Tractor, Amgen, Phillip Morris Int'l
I will keep track of the last Portfolio's performance from the start of FY 2009 and updates it every 6 months. I will, throughout the rest of 2009 discuss each of the aforementioned companies in detal aside from those which I have previously done.