I made this thread because to me it seems that Austrians have a better understanding of our economy then “mainstream economists” and the average joe. Also with the bailout and talks of more stimulus packages the future of the economy doesnt seem to be getting any better.
With that being said how could we use the current economic crisis to better benefit ourselves? What should we be looking at and for?The government is just putting forth more inflation and higher taxes so why not take advantage of this broken system to maybe help each other out =]
It seems to me that knowing what will happen to the money supply (and therefore interest rates) is the surest way to use your economic understanding to your benefit. If the value of the dollar is going to fall, you should be invested in gold, Yen, Swiss Franc, cashflow real estate, and maybe agricultural commodities.
If the value is going to rise, you should be in bonds and cash, and short other currencies. As the economy transitions from recession to prosperity, its time to buy stocks and speculative real estate (flips).
I don’t know if we will see inflation or deflation in the short term. There are arguments on both sides. The compelling reason to think inflation is coming is that the government is pouring liquidity into the economy. On the other hand, the housing and stock market crashes have just eliminated trillions in wealth and thus reduced the money supply far more than the fed can possibly catch up with.
Any comments from someone who understands better than I??
Plot a chart of money supply. When the slope starts to get steeper, invest all your money in stocks. When the slope gets relatively less steep, sell short stocks.
that’s Warren Buffett’s theory. Personally, I think there’s an opportunity to begin a grass roots movement to re-educate and build a third party or bring one of primary parties to table around limited Federal Government and honest money.