Friday, April 12, 2013

Many Warnings, Little Preparation

This is a rant for which I have little enthusiasm.  Harvard's Carmen Reinhart warns once again that the financial crisis has not passed.  Savers and pensioners in the West who count on their fixed income holdings to retain value are in for a rude awakening when inflation and financial repression grab them by the throat.

Economic stats are getting more negative by the day.  Hardly anyone seems to notice downward revisions of past data anymore.  Inflationary times are kind to people with hard assets and high debt loads.  They are not kind to holders of cash and bonds.  Other assets are a mixed bag.  Stocks in sectors sensitive to disposable income fare less well than stocks in more basic sectors when inflation harms a nation's buying power.

I prepared my own life for whatever lies ahead.  The people I continue to meet at social events around town are mostly oblivious to obvious risks.  They continue to ride unsustainable trends and ignore contraindicators.  I wonder why people of means who can afford the best advice see little value in becoming truly resilient.

My regular readers don't have to read between the lines because my published history speaks for itself.  I mock anyone who thinks this time is different.