The Last Days of Pompeii
Like the U.S. today, Pompeii was a pretty nice place. Somewhere Romans might go to for a vacation. In 79 AD, the day after celebrating Vulcanalia, the festival commemorating the God of Fire, Mt. Vesuvius erupted and Pompeii was completely destroyed. There had been significant warning signs; major earthquakes and frequent tremors. However, the residents of Pompeii had “become used to them”. They had learned to ignore these important signs of danger. Instead of taking precautions, they had continued with their party. As a result, when the volcano finally exploded, there was complete destruction.
Recently I have been writing about the economic dangers posed by unsound fiscal policies. You could say that over the last 5 years we have enjoyed a $15 Trillion party. I have been emphasizing that by most measures we are in at least twice as bad of shape as before the 1929 crash, which led to our country’s worst economic depression. Twice as bad as 1929 should be plenty of reason for concern, but it was recently pointed out to me that there is the additional issue of “unfunded liabilities” such as obligations for pensions, social security, Medicaid etc. While total debt in our country stands at about $60 Trillion, roughly twice the level seen before the 1929 market crash, unfunded liabilities amount to an additional $120 Trillion. This means that instead of being twice as dangerous as in 1929, we are potentially 6 times worse off than 1929. These numbers are so mind numbing they can become easy to ignore. This is exactly what most have chosen to do.
Currently warning signs are flashing the likelihood of an imminent, devastating stock market crash of possibly long duration. Like in Pompeii, most have learned to ignore the warning signs. In the meantime, “pressure” in the form of debt continues to build, increasing the potential for financial catastrophe.
Some think the market will never decline because the Federal Reserve is an endless source of money. They may not realize that the Federal Reserve has now leveraged itself 77 to 1. More quantitative easing is unlikely. When the economy collapses under 2 to 6 times the weight of the previous record for liabilities, most will be horrified to realize that our government has been throwing a party baking cakes made from the last of our seed corn. Many will react in shock when things collapse and they will wonder why we weren’t better protected.
TEQ Investments is a recently formed company whose purpose is to make investments that will increase in value as the market collapses. It will provide a hedge for virtually all of your other investments which are at risk in a declining stock market.
Like in Pompeii, most would prefer to celebrate instead of preparing for this inevitable economic collapse. Very few will have the courage to look at today’s unbalanced economy and take steps to protect themselves. Investing in TEQ Investments could mean your financial survival. I would like to further this discussion by sharing with you my list of reasons why market collapse is imminent.
Thomas E. Meyer
TEQ Investments, President