The following is an interview by
American Lantern Press president Stefan Gleason
with Independent Living publisher Lee Bellinger.
In it, Bellinger spells out what he sees as
some of the biggest opportunities
and dangers facing investors.
Stefan Gleason: Our newsletter Independent Living has for many years been a leading advocate of precious metals accumulation. How do you see what you call the coming mania playing out?
Lee Bellinger: Once the coming monetary metals investment mania hits, there will be a great deal of excitement and sense of vindication, especially for those few who foresaw it and made the hard decision to diversify out of dollar-denominated assets. That said, there is still time to get aboard the departing train, but the window for maximum wealth-building in precious metals is definitely closing fast. Not to throw you an additional curve ball, but let me add that it is important to begin thinking about your strategy for exiting (or at least lightening up on gold and silver), well before you need to -- even though people are only now catching on that monetary precious metals are the only truly credible currency left on the planet.
Good investors tend to be early-birds!
Stefan: Exit precious metals? Do you see us suggesting that soon?
Lee: No, precious metals accumulation is still the name of the game. But sure, at some point, it will be appropriate to begin lightening your load on precious metals. What I am referring to is what I see as one key trait of successful wealth builders: The ability to put emotions aside. And the importance of regularly checking the fundamentals of your investments -- especially your favorite ones. This helps to ensure that your path to financial independence remains straight, true, and relatively free of land mines.
Stefan: As they sometimes say, it's about knowing when to hold them and when to fold them...
Lee: (Laughing.) Yes, just like the song! The Independent Living editorial team knows that successful wealth preservation and building is about much more than simply "picking-the-right-investment." It's just as important to know how and when to sell. Successful EXIT strategies -- especially during the excitement of the inevitable coming "mania phase" of precious metals for example -- will require emotional maturity, a great deal of discipline, knowledge, and yes, a little bit of luck too. But make no mistake – it will always be prudent to hold some precious metals.
Fortunes are to be made and lost because we are in an uncharted situation. If you understand what is happening, you can make great gains. If you don't have your bearings, you can get crushed. For example, many well-educated people -- including numerous pro-market Republicans -- simply can't accept that the idea of "King Dollar" on which they were raised is now an empty shell. Let me tell you, stubbornly clinging to "dollar jingoism" against all the mounting evidence is going to be very expensive for many people who should know better!
I make it a practice to pay attention to little-understood political trends which define long-term market fundamentals. For example, global fiat currencies have been in an unbroken downward secular trend as compared to monetary metals. But in this raging blizzard of Ponzified paper assets there is one constant -- a light to guide us: So long as the U.S. government continues to paper over its insolvency and massive unfunded liabilities to millions of government dependants, the desperation-driven political fundamentals for precious metals are firmly intact.
Stefan: That fits with our contention that precious metals will become a widely recognized alternative global currency.
Lee: Yes, financially-desperate governments are printing money like mad to create the illusion of solvency. For the moment, that is an unbreakable political fundamental. Until a currency crisis ultimately pops this insidious government funding bubble in a decisive manner, the political factors powering the continued rise precious metals against all global paper currencies remain in place.
Stefan: So at some point, you envision an end to the rise of monetary metals against paper currencies?
Lee: At the risk of sounding self-serving, this is why people should continue to read Independent Living carefully. We are always challenging our own beliefs. We constantly search the horizon and ask questions such as: Could precious metals be near a top? Could deflationists be right that gold will soon drop to the $400-600 range? Might we have a 1980-level major blow-off top on precious metals that cause them to tumble? Is the U.S. moving toward financial solvency -- thereby reducing the need for inflationary money creation, and thus foreshadowing a top in precious metals?
The answers to these questions, for now, remain a decisive NO.
Stefan: You often say are a big believer in humility checks as well as reality checks when it comes to investing. What do you mean?
Lee: I love a simple, probing question that is sometimes posed to guests making predictions on the must-listen-to Financial Sense Newshour. It goes something like this: "Is there any change in the fundamentals that would cause you to change your prediction?" Recently, staunch deflationist Robert Prechter was asked this very question. Personally, I've been hoping some intrepid interviewer somewhere would dare to ask if his "Elliot Wave" construct still holds that gold should be trading in the $400-600 range and not in the $1,300+ range, but I digress.
What struck me was that unlike all the other panelists, Mr. Prechter's answer was a curt "no." He made it clear that there are no changes in the fundamentals that could cause him to change his position!
Stefan: Wow. That's awfully stubborn! I'll bet you believe in taking a different approach?
Lee: (Laughing) We at Independent Living are nowhere near smart enough to ignore changes in fundamentals! We take nothing for granted. And we check our premises constantly. We actively look for any changes in the fundamentals that tell us -- so that we can inform our readers -- that the point in the party has been reached where you and your date should start dancing nearer to the exits! After all, we at Independent Living are in the very same investment trenches that we recommend to our subscribers!
Stefan: That's certainly true. We're personally doing all the same things we're recommending to our readers.
Very interesting, Lee. Let's pick up this conversation tomorrow, and I also want you to delve more deeply into what people can do to protect themselves from the current mess. Everyone, please stay tuned.
|© 2010 Lee Bellinger's Executive Bulletin, a free supplemental email newsletter to Independent Living. |
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The information in this email is presented for general educational purposes only. Because we don't know enough about readers' personal situations, the opinions expressed here should not be construed as a recommendation to buy or sell any financial instrument at any time. We will not be responsible for financial decisions that readers make, and they should be made in consultation with their own advisers.
Tuesday, November 30, 2010
Posted by Independent Living at 9:43 AM
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