The Online Investing AI Blog

We’ve been through a lot the last few years. It’s been called economic hard times, a depression, the Great Recession. And on and on.

It’s nothing.

When we see the devastation caused by the earthquake in Haiti, we see a real personal and economic tragedy. This is a true calamity. Haiti and the Haitian people have seen more than their share of misery, from revolutions to extreme poverty.

The sad truth is made even sadder after several studies and reports indicated that Haiti’s economy had been steadily improving.

For most of us, this should serve as a reality check for our own lives and finances. No matter how bad things are for us, they pale in comparison to the hardships that the Haitian people face.

I hope you spend a little time today thinking about and praying for the people of Haiti. I also hope you spend some time thinking about just how lucky we have it.

Sending help…

Click here to donate to UNICEF’s relief efforts.

Click here to donate to Yele Haiti.

Click here to donate to the Red Cross.

Clicke here to donate to Mercy Corps

Click here to donate The Salvation Army

Money, Online Investing AI, US Economy depression, disaster, earthquake, economy, haiti, response

Depression is more than just a name for sliding GDP numbers. True, it may be an economic condition; but, it can also be a mass psychological effect that turns into an dire economic feedback loop.

People are depressed and the economy suffers; the economy suffers and people get more depressed. And so on. Think of Japan in the 1980s.

Forget profits and jobs. We know they have been damaged. What is more frightening–and far more devastating–is that the psyche has been damaged because of the recent financial turmoil. Factories can be rebuilt and jobs can be created, but when people stop believing, the chances for recovery are slim.

There’s one more sign that our collective conscious is slipping into a deeper funk.

Read more…

Business Strategy, Dreams Come True, Money, Online Investing AI, Success, US Economy depression, innovation, invention, patents, recession

Ms. President @ Flickr

The rose-colored glasses aren’t always on.

We’ve talked about the current economic problems and possible future ills… here and here.

But that doesn’t mean that the bad times are here to stay. There are some fundamental reasons to be positive about the future.

As we covered recently, recessions teach. Once we’ve cleared this dip–or double dip–we have it in our power to have an even stronger economy. This isn’t guaranteed. We can flub things up for a long, long time, but eventually markets self-repair. If you let them.

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Accelerating Technology, Investing, Money, Online Investing AI, Success, US Economy apocalypse, bad economy, bad times, boom times, depression, economy, recession

R. S. @Flickr

The official unemployment rate bounded above 10 percent recently.

But, that’s the official rate. Some economists say that rate is deliberately doctored to make it sound better for politicians who earn their keep by promising us prosperity and endless economic opportunities. These economists say the rate is closer to 17 percent.

It doesn’t matter whether you’re one of the 10 percent, or one of the 17 percent, if you were cut from your job, you’re going through some financial and emotional upheaval. This sense of chaos and loss can lead to depression.

But, like any challenge, it can be the trigger for positive change that can create stunning success. Here are some tips to beat the unemployment blues and make this a situation that leads to real, honest change for the better.

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Dreams Come True, Great Books, Money, Online Investing AI, US Economy blues, depression, happy, inspiration, job, job loss, unemployment

The Great Depression was not a singular event.

In fact, it was a brilliantly destructive ballet danced by the incompetence of both government and industry.

Most people see it as a super drop in stock prices followed by massive unemployment. That’s really not the case. As the chart from Smart Money shows, it had a “W”-shape path out of the dire economy.

According to the Wall Street Journal, the economy was pulling out of the Depression in 1933, but a series of policy blunders sunk the powerful recovery and created a “W” shape.

By 1937, the economy slid back into a deep depression.

Could this happen again?

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Business Strategy, Investing, Money, Online Investing AI, US Economy depression, economy, Great Depression, Money, stock market, wealth

Now that the recession appears to have abated and everyone is saying that we can relax, I think it’s time to reevaluate the situation. If you consider that the country’s financial situation has worsened significantly, it’s pretty clear that we are not out of the proverbial woods. The government spending of trillions of dollars may have stopped the recession, but it may also have set us up for a worldwide depression.

Think I am full of doom and gloom? Absolutely not. Both Matt and I are extreme optimists. But consider these facts: depressions happen on average once per lifetime, or every 80 years or so. It’s been 80 years since the last depression. The government is running budget deficits on a scale that has never been seen before, and has no way of paying back the money. The housing market has leveled off, but there is nothing to help it recover after the current first time house buyer’s stimulus wears off. The unemployment rate is getting higher, and there is nothing to slow that down. The US automakers have recovered for this month, but only because of $3 billion dollars of free money for (mostly American) clunkers. As soon as that stimulus effect wears off, the American car manufacturers will be in even worse shape than they were last month.

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Economic storm a'brewin' or good times coming? (Photo Wes Rogers, Creative Commons)

Here’s a shock: There’s conflicting information that’s hitting the investing world about the state of the economy.

As we fight through one of the worst economies in recent memory, stock market analysts and economists are peeping their heads out of the fallout shelter and making their predictions. One trend forecaster believes that we’re looking at a Super Depression in just a few years.

Gerald Celente, who predicted the ‘87 crash and the rise of Starbucks, said last year that 2012 will be a bad year economically. (That’s my understatement of the year.)  Celente talks about revolutions in the street and a total bank failure.

Paul Farrell has dire predictions, too, in his article on the 2012 bubble burst. Here’s where Farrell is coming from:

Behind the hoopla, the Wall Street conspiracy has dumped $23.7 trillion new bailout debt on taxpayers. The bill will come due. But for now, we’re getting their wish: A new bubble is accelerating, thanks to America’s “too-greedy-to-fail” Wall Street banks.

Other economists have a different view.

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The sudden collapse of the debt market and it’s catastrophic ricochet into the stock market has a lot of people saying that they “lost everything” in the recession.

Other people have lost their homes and their cars.

Then there are those who lost their jobs.

I was talking to a friend who did the trifecta: He lost his job. He lost his home. And he lost most of his retirement. (He actually lost his girlfriend, too, but his story sounded too much like a country and western song. Plus, I never heard of a “four-fecta” before. Or is it quadfecta?)

You’d guess that after this devastating string of bad luck, he would tell you that he had no more assets. But, that’s not how he looks at things. Despite the heavy loss of material possessions, my friend said his most valuable assets are continuing to produce high returns.

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Online Investing AI assets, depression, financial freedom, Money, recession, wealth

Are we on the verge of economic collapse? Are millions of people going to see their retirement saving dwindle to 20% of of the previous value?

I don’t know. I don’t think anyone can predict the future with perfect accuracy. But I do think we should be prepared for whatever happens in the future. And that includes economic collapse.

Most people just assume that things will continue going the same way as the last few years. They stay at their jobs and try to save money. Financial planners assume that stocks will return 7%. There is just one small problem with this approach. Massive economic depressions happen on average once in a lifetime. It’s been 80 years since the start of the last depression.

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Automated Trading, Investing, US Economy Automated Trading, depression, economic turmoil, Investing, recession, stocks

As the stock markets have made a big rebound, some people think that we are out of the woods. Has Obama’s massive plan averted financial disaster?

I think that it is way too early to tell. The fact that the markets have come back to nearly previous high levels is a great sign. The problem is that nothing has changed fundamentally in the economy. Unemployment is still high, and there is no reason that it will come down in the near future. Domestic automakers are finished, but the American people are left holding the bag. Demand for goods and services is not rising, and businesses have little ability to grow in the near future. Housing prices are falling, and I don’t think Obama’s plan will be enough to keep them from continuing to fall.

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Accelerating Technology, Dreams Come True, Investing, Money, Success, US Economy depression, economy, finances, markets, Money, Success