2014: Expect Volatility

This week Congress passed a budget proposal to stave off another budget standoff.  I am sure they know the populace must start “forgetting” before the November elections of 2014.  Once again, self preservation is guiding the politician’s action, his continued employment depends on it.

Expect the Fed to taper their Quantitative Easing.  They will use some other means to achieve their goal of “cheap money”.  There will be an investigation of gold and silver price fixing just as there was an investigation of interest rate manipulation (LIBOR rate).  The FCA (Financial Conduct Authority) in the UK is now looking into the issue… finally.  The Germans are doing the same.  Hands will be spanked, fines assessed, and then the perpetrators will sail off in their yachts with a sinister smile.  It was simply the cost of doing business.  However, the cosmic Law of Equal Weights and Measures” will track and record this lawlessness.

Consumers will be encouraged to increase their debt levels even though their buying power continues to decline.  Interest rate pressure will increase and the value of hard assets will expand to the mainstream portfolio managers.  Those in debt will increase in their suffering.  The 3% decline in Black Friday retail sales is a clear indication that the consumers are in serious trouble.

Social unrest will increase because of the disparity between the “have’s” and the “have not’s”.  Spain, Italy, Portugal, and other countries have not resolved their economic issues.  Cheap money is the only answer as determined by those currently in power.  Inflate away the problem.  The American educational system is broken,  the Judicial system is broken, and the political system is broken.  These systems will not sustain themselves forever.  Disruption will evoke change.  I expect those who have endured the lackluster performance of hard assets should be rewarded in 2014.  Patience has been the key.

Gold and silver have been building strong technical bottoms.  Remember when gold was $275 per ounce?  $1,200 is the new support area.  $90 oil has held firm as the consumer looks at $2.79 as a good deal for a gallon of gasoline.  Remember hearing our parents complain about the increase in the price of food and drink?  We all are now sounding like our parents.  The McDonald $1 menu is being replace by the $2 menu.  $3 for a glass of Iced Tea?  In 1966, a larger burger was 35 cents.  Today, the same burger is over $3 and its contents look a little suspicious.  Inflation continues to provide the illusion of growth.

The bond market bubble will probably burst this coming year.  Pensioners will be hurt by this event whenever it occurs.  The courts are handing down decisions that hurt pension recipients.  There will be no guarantees for many of them who were loyal to those companies and municipalities all those years.  Bank bail-ins will gain popularity by those who create policy.  Even your money in the bank will have additional risks attached to it.  The risks will increase on several fronts and perpetuate the volatility.

Simplicity, conservation of wealth, and reduction of monthly cash outflow will be on the minds of the baby boomers in 2014.  There will senior networks developed to tap into this major group who hold a lot of wealth.  This is where many baby boomers will get their direction in transitioning out of the workforce.

This volatility can be offset by peace from Above.  It is imperative that your spiritual focus be aligned with Our Heavenly Father’s reality.  Illusion, deception, and lies are being perpetuated by the current system.  Those who build their house on sand will see it blown away as the volatility reaches to new heights.  Don’t be caught unaware.

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