When the blood is on the streets…time to buy…!!?

Most of you will have heard it on the radio, or seen it on TV, or read it in the newspapers.

The financial world is in a big crisis.
Some people have described this as a Black Swan event, and never saw it coming.

However there have been contrarians, actually smart people who should have been in control of our governements, who saw this crash coming in 2006 already.
I wrote an article about it already.Peter Schiff predicts economic crisis…

The problem has originated in the USA, who was at one stage the world’s biggest debtor nation, and is now the world’s biggest creditor nation which means they owe huge amounts of money to the world.
This crash should have occured back in 2000 after the Nasdaq tech bubble burst, but instead of letting the free markets do their thing and sort out the imbalances, Federal Reserve Chairman Allan Greenspan decided the way to save the economy was to lower the interest rates to ridiculous levels close to 1%.

This sparked an enormous bubble in housing and consumer spending, because people could lend for next to nothing, and their house kept on going up in value, so they kept being able to lend more against their house…until…the housing bubble collapsed early 2007.
Since then its been downhill, but only last week, there have been unprecedented declines in global financial markets. 35% down in one week, and the last few days there have been moves of 10 and 11% on a single day, the largest in history next to the 1987 crash where the US markets lost 26% on a day. This is no longer possible because systems have been put in place after the 1987 crash to never allow markets to be able to drop that much again in a single day.

Iceland lost 76% on its main index in a day!
Banks are all being bailed out by governments pumpin in hundreds of billions of dollars to try and rescue this mess, because if financial institutions disappear, and people lose their savings, there will no longer be order, the real economy will grind to a halt and there will be total anarchy and chaos.

Of course, the real effects of this will only begin to seep through into the real economy over the next few years, and we are all in for a global recession or depression like in the 1930′s, where exactly the same thing happened. It started with excess credit being created, then the bubble burst, hundreds of banks went bankrupt, and the real economy suffered for over a decade to get back on track.

With all the financial institutions going bankrupt, thousands of jobs are being lost.
The lack of credit will bring consumer spending to a grinding halt, this means no more lending to buy cars, clothes, luxury items etc.
This in turn will force stores to close, and companies to close and scale down, thus resulting in even more job losses and so the vicious spiral downwards continues until at some point people will think it will never stop and that is when it will turn around again.

Smart people with money who have bought in times when no one else wants to buy have gone on to become some of the richest people in the world!

We are not totally there yet, but pretty close, and now is a good time to take 10-20% of your money and start buying stocks.
Warren buffet, who is of the top 10 richest men in the world, has a strategy to buy shares when they are really low and keep them for a lifetime.
He has recently bought $5 billion worth of Goldman Sachs, and $3 billion in General Electric.

It is times like these when you invest and in 5 or 10 years time there is a big posibility to multiply your money tenfold.

Within the next few years the same will happen to real estate prices, and nobody will want to buy property anymore. That is the time when smart investors with money will start accumulating property only to have it go up in value many many times over for the next decades.

Just a helpful little tip for those of you with cash out there who have the oppertunity to make very good returns over the next years if you invest smartly like I’ve described here:)