By Jen Bawden
January 23, 2008
I have nervously watched the US credit bubble and housing bubble grow larger. Over New Years at the Renaissance think-tank, before the January crash, I sat for dinner next to one of my heroes David Walker Comptroller General of the United States. David agreed wholeheartedly with the main concept outlined in my December report that I read verbatim to attendees of the conference.
The US government and the US populous are spending way too much and are headed down a perilous road.
A good read is Financial Armageddon by Michael Panzner, which you should read as soon as you can. (I just finished it myself and wished I had read it a year ago!) This book gives a fantastic window into where the US could quickly be headed if the proposed government help is not fast enough or large enough. With this foresight I believe you will be better equipped to batten down the hatches and protect yourself from the financial tsunami that could soon arrive. (In the US crash following 1929, Canada was the second worst hit globally.)
Side step the derivative nightmare by shorting the market (Proshares ETFs short Real Estate, financials, Russell 2000, etc.) Buy these on bull rallies in each sector.
High yield bonds could easily be the next sub prime bombshell. If brokers can not change direction from a bullish to bearish mentality, investment banks will take multiple losses on the chin.
I believe the Canadian Gold mining companies will be the next explosion on the upside as in the race to safety and gold as the world buyers start to seek , discover and devour them.