Financial Sense Newshour

In this week’s first Big Picture topic, Jim looks at the current “Kabuki Theatre” debate playing out in Washington DC over threats of sequestration and the resultant “dire” consequences for the nation. Jim sees this event as just more political posturing, which somehow always upsets the markets in the very short term. He sees any potential “crisis” as a potential buying opportunity if the markets take a tumble.

Jim welcomes back Michael Kantrowitz CFA, Director, Portfolio Strategy & Quantitative Research at Wolfe Trahan in New York. Michael sees the inflationary set-up as the big difference between 2012 and 2013. He expects record high gas prices by May, and sees Chinese economic growth leading to more inflation for US consumers. He mentions a steady stream of early signs of inflation. Michael discusses investing in areas that will benefit from massive central bank stimulation: energy, materials, industrials and technology.

Jim welcomes Daniel Amerman CFA. Daniel discusses what he terms a false dichotomy between those in the “Mainstream” camp, and “Gloom and Doomers”. He sees a future investing reality where neither the old economy will repeat itself, nor will there be an economic collapse. Dan sees a future economy under the increasing control of the government. He believes there will be a “third path” of a blended economy that shifts a little more each year from being dominated by free markets, to being dominated by the State. Daniel notes this pattern has played out in many nations over many centuries. If his vison of the new status quo plays out, future investment results are unlikely to be what either Mainstreamers or Doomers expect.

Jim Rickards, Pentagon advisor, investment banker and author of the famous book, Currency Wars, speaks with Jim Puplava on the Financial Sense Newshour to discuss the new age of global financial warfare and its potential outcome on savers and investors around the world.