"Does teaching mean talking or a lecture? That's how they teach you in school, but that is not how life teaches you. Most of the time, life does not talk to you. It just sort of pushes you around. Each push is life saying "Wake UP! There's something I want you to learn.

... Life pushes, all of us around. Some give up. Others fight. A few learn the lesson and move on. They welcome life pushing them around. To these a few people, it means they need and want to learn something. They learn and move on. Most quit, and a few (like you) fight."
- Robert T. Kiyosaki

Human Nature:
* Summed up in 4 basic tenets:
1) Never underestimate the irrationality and gullibility of human beings - especially in groups and especially with
their money.
2) Never underestimate the unspoken human need to “screw up” a good thing.
3) Never underestimate the ferocity with which dominate groups will “eat their own.” Good will never be good
enough.
4) Never - NEVER, put an academic in charge… They consistently underestimate number’s #1-3 (above) and/or
think they can control numbers #1-3 via “someone else’s” theories or formula(s). “When the going gets tuff, the academic runs to the library.” - GC

Economics:
* Economics will always drive policy. No matter what party is in office. Starting with the IRS, look for Major changes disguised as "simplifying the tax code" in 2005. The Stock Market always seems to surge, and then dive in mid election years and at four-year intervals. 1990, 1994, 1998, 2002, 2006, 2010, etc.

* Banks are WAY overextended on credit! Along with Real Estate speculation, credit card saturation and automobile appreciation, this is another "bubble" - the "Credit Bubble." Bank deposits are insured by the federal government (read: tax payers) and are regulated. Because of huge defaults and a tightening of minimum federal deposit requirements by the Fed, this will cause the banks and regulators to "call under collateralized notes" in order to meet those requirements = Massive foreclosures and "fire sales" of assets (read: REAL ESATE) to meet those basic requirements. This is very dangerous but definitely a buying opportunity for the ‘savvy’ investor and ultimately means major tax increases and inflation/deflation as well as collapse of some markets.
- Quote from Daily Reckoning 6-27-07 relating to this prophesy, “Shoot, picking a date in random, say, in May 1995, which was eleven long years ago, total deposits in the banks ("savings") were only around $110 billion, and total loans and leases on the books of the banks logged in at only $204 billion. And against that, the banks were saddled with $57 billion in required reserves. Now, I notice how my blood has run chilly, and how everything is dark and gloomy. Gaunt buzzards have gathered in the trees to sit and lick their chops as they glare into the deep, dark, dangerous depths of my soul. I realize, in a sudden cold sweat, that the dollar and the banks (as we Professional Mogambo Economists (PME) say) "are doomed!" The scene is now perfectly set to reveal the ugly fact that total deposits at the banks are up to $5.2 trillion, which is 47 times bigger than it was in 1995. That's a growth rate of 42% a year, compounded! And the total loans and leases is now $5.7 trillion, which is 27 times bigger than in 1995, which works out to an annual growth rate of 35% a year! Big, Big increases! Yet against that monstrous, cancerous rise in both assets and liabilities, the required reserves went down from $57 billion in 1995 to only $42 billion today in 2006! Hahahaha! Surprise! Down! Required reserves went down! Hahahaha! To keep the same 0.518 ratio of required reserves against total deposits in the banking system in 1995, the banks would need to have, right now in required reserves, $2.693 trillion! Instead, they have only $42 billion, 1.6% as much! Hahahaha! In short, more than all of the money and credit created in the banking system since 1995 has been literally created without any underlying cash deposits of any kind! None! Zero money! This is an infinite multiplication of deposits! Fractional-reserve banking at its insane, suicidal extreme!.... And you wonder why it is that I am always screaming that you buy gold and silver? Hahaha! Wonder no more!”

* People and this country are actually living on credit. Apparently - like cell phones - you have totally misjudged how far this can go. ANY disruption in their individual situations (unemployment, another attack(s), major interest rate adjustment(s), health, etc.) and they are going to be running for their lives. Keep in mind, also long-term implications of the new bankruptcy law. They’ve effectively barred and/or barricaded the back door. There’s nowhere to run and hide. How do you profit from this? (At this point keep sheltering cash in treasury money markets. Keep safe and liquid).

* New round of layoffs, a sharp rise in inflation and interest rate hikes in summer - Fall 2005. Also, start watching for a round of deflation to start showing itself in certain bubble sectors - like housing and autos (Starting. It might be time to just sit on cash for a while).

* Because of USA consumer debt load/default and a VERY loose Fed monetary policy the world economies pull money out of the USA. The USA starts to turn inward as the economy starts to implode. Very possible at this point the US economy goes back to some form of hybrid "Gold Standard" in an attempt to rescue the reserve currency status and foreign investment to finance its debilitating deficits. Ultimately though, it will probably be too late. However, gold should rise considerably and so will other commodities. Look for agriculture deals to really start looking good. The USA will need to start producing and exporting to balance budgets and juice the bottom line. The government can stimulate this area pretty easy with tax cuts (and credits) and stupidly low interest rate loans for farming start-ups.

* 2008-10 Shift of world influence and power to China, EU, Russia and Far East. 2010 USA starts to get global again, BUT with China, Southeast Asia, EU and maybe Russia as co-partners or co-superpowers. The USA never again regains its former hold on the world's economies or considered the world's sole reserve currency. Start investing in these areas with art and Internet start-up's.

* 2012, USA economy again collapses - baby boomers in full "retirement mode." Medicare, Medicaid and Social Security in dire straits. In 2008 start buying up long-term treasury bonds, preferably at about 8%+ and 10-year at 6%+. Hold for "Baby Boomers" a couple of years later. Start dumping in 2010'ish. As pension funds start to fall apart, bonds will skyrocket! So might real estate again. (Start buying up apartments for future condo conversions and commercial properties. When interest rates decline again, start pulling out equity for the purpose of condo conversions. Work to re-vamp into "retirement condo villages" for baby-boomers when rates lower again and buying continues again. However, don’t fixate on “baby boomers” too much; they’ll have to walk in the end).

* Deep-Cutting actions by the government to help Alleviate the Deficit in spring of 2005.
a) Deflate the dollar big time.
b) Give back power to the IRS.
c) Jack up interest rates to hold foreign investment dollars in the USA - 6.0%+.
d) A new round of “protectionism” in trade. Attempts to punish China just like Japan in the late 80’s.
(Dubai Ports Debacle)
e) Further close tax-loopholes on Individuals, Sole Proprietors, Real Estate "Bubble Investors" and housing
markets.
f) Raise Taxes. There will be a repeal of tax cuts - at least on the ultra “rich” - under the guise of them
'having served their purpose' in "Getting us out of the recession of 2001 - 2003 and funding the 'War on
Terror."

Real Estate:
* It's not the consumer/owner that is fueling the Real Estate insanity; it's the new speculator investor bubble. This started in 1987 (1996) - really picked up speed in 2002 - 05. If all holds true on the 10/20-year cycles of bubbles - then it should stabilize/deflate/burst/bottom out in 2006(7). Just think of all those new subdivision signs as formerly hyped Internet stocks of the late 90's. Eventually, even the quality assets will crash. However, they are NOT as easy to dump in a panic. You come in and scoop them up at "fire sale" prices. (Start getting educated on the foreclosure markets and buying/selling/bidding over the Internet).

* Appraisers and banks will be the next scandal. Maybe even work its way into the treasury. Also, keep your eye on Spitzer and his targeting of sub-prime lending practices to minorities, low income, elderly, etc. Greenspan retires in 1/06 so watch out! There could be a real 'crisis of confidence' in the markets then. The 1987 stock crash happened two months after Greenspan was appointed at the height of the stock & real estate market peaks. (Keep following the rumors of offshore hedge funds - supposedly baked by The Fed, buying up huge chunks of USA debt in an attempt to widen the spreads between short-term and long-term notes and bonds. If this turns out to be the treasury, the market will pitch a fit and punish accordingly. This could really be the undoing - via horrendous protectionism - of Greenspan'ism, Fiat money systems and the Bush Administration).

* Home prices will level in late 2005, decline in 2006 and bottom/collapse in some areas (like the west coast and North East) early 2007. Should start to bottom slowly but solidly (with a thud!) in the spring/summer 2007 - 08. But don’t look for real appreciation for at least 10 years. Wait for rents to catch up. (This is when you start your entry in the market and your concentration on cash flow via real estate - 2008. Look for a minimum 25% drop in values from 2005 highs - in bubble areas - and RE agent flight. Remember though, your assets are NOT your business(s); they are your shelter(s).

* The USA will have to devalue her currency (maybe significantly) to lower the 'twin deficits.' This will pull the floor out from under all the crap bought on credit appraised at inflated rates: Homes, cars, land, etc. All remodels done with "cash out" policies or credit lines will be irrelevant at resale - yet the debt still remains. People will then be upside down = some banks could fail due to the glut of foreclosures. Government - to stem the tide of foreign investment money running for the hills - will step in and adjust interest rates WAY up, slash banks assets to the bone and tighten deposit requirements - like the S&L crisis of 1987-90. The USA has and never will default. BUT it will screw its own people in order to meet those obligations of other nations. Look for the government to enact some sort of panic knee jerk reaction - like sticking unpaid RE loans to individuals for the rest of their lives - like student loans. See below for explanation. But first there’ll be rampant inflation, and then deflation in Real Estate, fall 2006 - 07. (Starting. Keep watching the new anti-chapter 7 bankruptcy law unfold. This law will hold people to these debt obligations - encouraged by the fed reckless monetary policy and backed up by inflated collateral. This big corporate bank handout/payback could actually be the straw that breaks the camels back of the American consumer. The fact will always remain; you can’t squeeze blood from a stone. I really bet you see heads roll on this one in 2006).

* RENTS - During the "housing boom" - will never be able to keep up with payments. Many un-qualified speculators will do anything to get out from under this burden. They are called "hot sellers" because they were in a bad deal to begin with, at the first sign of trouble they run for the exits. Where do you see the ripple effect headed? Have everything in place and be ready to jump when it's time. When all these over-extended people get foreclosed on and kicked out of their houses, they will have to live somewhere - rentals. Since they will have acquired so much crap and were accustomed to already having a house, this will make single family homes (or really just about any rental) skyrocket! Also, since they were kicked out of their home - and the fact that should have traumatized them - they should have much more respect for a roof over their head. Therefore, they should take good care of the rentals and respect the rent and the timeliness of paying it - for a while. Also, these individuals might be good candidates (later) for a Lease-to-Own option. (Start picking cities and regions for investment and personal properties purchases. Eventually, because there will be so many at one time, there will be windows opened to let pressure off the markets. They won't last long, but they will be pretty. This will be your momentary glut of housing that will vastly push down prices in stages and steps. Look for about three of these windows to open up before the market gets back on the right track. Watch and plan for these opportunities with planned cash flow targets, regions and cities).

* The next bust in Real Estate will be because there will be a major tightening of credit by the fed, vastly higher long-term interest rates, tax loophole closures by the administration (and the IRS) and because of the ability of builders to cut deeper because of wholesale pricing to clear out inventory - a glut in the housing market of available units. This will KILL the small private 'investors' who bought pre-existing homes at WAY too high of prices for rents to keep up and those who based their purchases on capturing a tax loss from the IRS. (This, - The “Real Estate Professional” designation - I see as a major loophole that gets closed (or tinkered with in a big way) in the 2006 tax restructuring. Initially, Bush will try to play politics on this, but will ultimately be backed into the corner on this and will over compensate - classic over correction. To really keep an eye on a "bust" unfolding, follow Phoenix).

* Look for the government to implement some sort of “knee-jerk” under thought out legislation stopping the huge flood of foreclosures from hitting the market. Look to them to overreact by legislating some sort of “anti walking” legislation on housing mortgages - especially FHA, VA, HUD or pretty much any mortgage held by Fannie Mae and Freddie Mac - which is most of them. Because so many people have pulled all available “appreciation” from their homes and will be forced through under collateralization to turn over their keys; look to see these unfunded mortgages and liabilities - or any other government liabilities for that matter - forever linked to these individuals for life. Much like student loans made by private banks previously - but backed up by the Feds Guaranteed Loan Program. The outstanding loans (the money NOT covered by the foreclosed sales of these individuals homes) will hang around their necks forever like a noose until all the money is coughed up. The government ONLY deals in cash and because foreigners are largely responsible for the influx of cash the last 10 years or so, leading to stupidly low interest rates available to real estate and real estate related investments - they will be looking to the USA government to make this right - or will simply pull their dollars (dump the bonds), thus collapsing the dollar and the USA’s banking system.

Society/Business:
* A LOT of people are going to get VERY hurt. This will affect the markets for quite some time. Can you live with this? (As bad as this may sound, other people's problems are not yours).
a) 34.3+% (2004) of all mortgages in the USA are ARM's. Big ARM's (3 year balloons) started to gain popularity in 2003. These are, for the most part, speculation investments. They will start to come due in 2006 and many “Cash-out’s” that were used to fund RE speculation debt pyramids based solely on price appreciation – NOT rent cash flow – will collapse on themselves.

* Imports (USA and its people) far exceed exports - We don't really make ANYTHING anymore. The country itself is the "commodity" that's bought and sold. Not the products it produces. The business done internally is a sideline activity - for now. Buy and Hold is truly dead. In order to make money you have to build businesses whose sole intent is to be bought and sold. Either by listing on exchanges and/or sold outright. The message is the product; the actual - tangible - product or services line is secondary. If listing on the exchange, then focus on your basket of assets - like ownership in other companies and pool then under a C-corporation in order to be traded on the exchanges.

* Self-regulation does not work. “Supply-Side (or trickle down economics) does not work. Greed, Politics and self-interest (human nature) will always get in the way. Keep this in mind, in the last 25+ years this country has become Bloated, Lazy, and Spoiled Rotten! What does this mean to you? Can you profit from this? (Safe and liquid. Profit from the pieces at pennies on the dollar. People are emotional messes with money - especially in crowds!).

* The middle class in the US will really start to disappear 2010 and be replaced, reinvented or simply gone by 2025.

Family:
* There is no job or investment security, especially in the Mutual Fund (stock) market. As for job security, this also includes the military and civil service. Watch your ('s and your family's) back!

* Were looking at markets decline with possible bust starting in fall 2005, 2006-07, 2010-12, 2016, and 2025. Plan ALL investments accordingly. Don't be afraid to move your money frequently. Fast money wins! Keep studying and perfecting 'systems.' Looks like the dollar - and the markets - will rebound March - August 2005. On the backs of a stronger dollar, anything dominated in Dollars: gold, oil, commodities should go down in value - initially. Interest rates should continue to go up. This will kill bonds, banks, homebuilders, and autos. This, however, should be a last gasp before the dollar falls in force from September on.

* You are on your own! You are going to have to make your vision of success, your OWN Career and Investment Career. No one is going to take you by the hand and show you how to do "it!" You will ALWAYS have to do "it" on your own! Get tuff! 1) Get Educated, 2) Get a Plan, 3) Accept it and act on it. You are going to have to make a name for YOURSELF elsewhere, BEFORE museums, schools; galleries, business ventures, etc approach YOU! At this point you will have better leverage as to deals presented to you. You will be in a much better position of power. You don't have to work hard; you just have to work consistent! Everyday do at least one thing that will enable you to meet your ten-year goal on time.

US Government:
* Pension funds are woefully under funded. This is another "bubble." The federal government is systematically purchasing these pensions and will eventually morph into the world's first true socialist state (of course under a totally different name) - far surpassing those of Europe. How can you profit from this? (Many pension funds own apartments and other cash generating vehicles you may be able to get on the cheap). This also means venture capitol could dry up. The government only deals in cash. Upon acquiring these defunct plans, the government could likely 1) dump their non-cash assets - tangibles, like RE, bonds, stocks, etc, 2) Convert to cash and, 3) Issue bonds for the cash shortfall. Start picking up assets and bonds when rates on long-term bonds hit 8%+ (10-year, 6 %+).

* Starting after the presidential election of 2004, the IRS will be given their teeth back and will bite like hell (Audits of sole proprietors, private collection agencies, etc). Then will come closure of RE and other loopholes. These could be very painful, like the 1986 Tax reforms package and the “Plaza Accord.” How do you get yourself out of the way? (C and S-Corporations, LLC's, LP's, etc,). Hang tight and wait for the storm to move past. Pick your shelter(s) and wait it out.

* The Iraq war with the US's major involvement will extend into 2006. We will loose and squander a lot of goodwill, influence and money in the world politic. This economy - and possibly parts of the world economy - will be in shambles. This includes: the dollar, government, law, art, education, investment, land values, etc. What will the ripple effect of this loss of confidence be in the world politic? (Shifting of influence - both economic and otherwise - to the European and Far Eastern Hemispheres. Read: EU, Russia, China and Japan (Expect these two to fight constantly). They'll chew us up and spit us out when they are done with us).

* G.W. Bush (jr.) will win another term as president (originally typed, March 2004). Things will get VERY ugly for a long time. This administration will mishandle situations (including critique, other terrorist attacks, natural disasters, etc. Resulting in real fragmentation of this nation - which could easily include protests and riots). People and countries will start to realize this administration has no real control over anything and start to see them as the screeching fanatics they are. Many supporters and countries will become very disillusioned and withdraw into themselves, their homes and their investments (read: cash). I believe out of this will come 'real change,' real direction and leadership in the arts, education, banking, music, movies, currencies, etc – at least for a while. However, by 2006 this administration will become so ineffectual that many of its policies will become reversed and the conservative Republican Party will splinter and fall apart. Everyone - especially the evangelical religious right - that feels they put him back in office will want "payback." (Starting. Look at incidents like the Terry Shiveo right to die debacle and Oregon’s Assisted Suicide Law. This was an unfortunate situation that really pitted this administration against the beliefs systems of the Evangelical Religious Right, the core Economic 'Small Government' Republican Party, and the Law. Not to mention the constituency - the 'undecided vote' that appears to have put all these jokers in office in 2004. This large group of 'undecided' does NOT what the government meddling in this. Gay marriage and abortion is one thing. However, picking on the gays and other 'sinners' really affects such a small portion of society; much like taxing the rich, tobacco and alcohol sales. People don't mind taxing small segments to reap political gain. But the Terry Shievo case affects a very large segment of society (everyone) and brings government directly into the home and body. In the end, the voters will not tolerate this harsh power grab.

* At the VERY first sign of weakness on the USA's part, Civil War could likely break out in Afghanistan, Iraq, Israel, China/Twain, N. Korea/S. Korea and Russia/Chechnya. Total chaos in Iraq causes complete withdraws in spring 2006. USA imperialism and ‘democracy’ will lose all credibility, as will Bush and his ilk and "American-Style Economics (Deficits don't matter)." Look for a major pullback by other countries and a return to internal economic development.

* Bush will NOT implement an "official draft." He will just decide that we have won and will ultimately pull out. However, if Bush wins another term he won't pull out without a fight. He will overcompensate and bomb the hell out of Iraq - Like Nixon did with Vietnam. This action will be devastating for American credibility. Congress will drastically raise certain taxes and interest rates. This action will kill the American consumer in the fanatic quest to 'end the fight' - it will almost become irrational. This could bust the economy. (Look for this to start unfolding before the November 2006 elections. This is exactly what happened to Nixon).

* Whoever wins the next election will spend pretty much all of 2005 - 06 trying to implement SEVERE budgetary "fixes." Will groundswell at the end of 1/2006 with the resignation of Alan Greenspan. Foreign investment will pull out and huge gyrations will collapse the stock markets, bond markets and Real Estate. The Fed will jack interest rates way up in an attempt to keep foreign investors in the bond market - thus collapsing the bond market. Gold and oil will go through the roof. Gold, Silver and Agriculture stocks and assets will benefit from a collapse. “Tangibility” will most definitely be back in vogue. Act on Real Estate when it's time - you'll know because everyone will be running for the hills and people will think you are out of your mind!

Arts & Entertainment:
* Five Givens in the future of the Arts and the Internet.
a) Distance College Education will become the norm. Also, look to the increasing popularity of non-accredited education getting bigger and bigger as the realization that accredited education still relays on outdated business models of the industrial revolution and have become increasingly irrelevant in the "New - New Deal" societies.
b) Self-published books, Music and Art will be increasingly accepted and sought after.
c) Mainstream News outlets will increasingly rely on the web specifically for stories, etc. (look at Iraqi insurgents and Osama Bin Laden's use of the web to make news for itself, Blog’s etc.
d) Some sort of "Kelly Services" type of organization for professional "moderating" services. Chat rooms, etc.
e) Speed and efficiency will increasingly be key here. Borders will continue to melt away.
(* Now, how can you turn all these ideas into profitable businesses? All of these could easily be their own businesses. Keep focused on Internet start-up's whose 'exit plan' is to sell at peak. Remember, the web is just a filing cabinet. Approach your Internet start-up's this way and you should stay relatively profitable - you don't have to hire a team of college grads to operate and/or administer a file cabinet).

* Just sit tight. This is really starting to suck. Be patient. Continue putting this all in place and adjusting as needed. With all the negatives in place, it’s become very obvious even to the most ardent optimist that the USA is living on “borrowed time." Negatives, such as: Pension funds going broke (and/or expected benefits halved), airlines teetering and/or going broke, threatened SSN, Medicare and Medicaid solvency and a projected 2+ trillion bailout, requested another 100 -150+ billion for Iraq war in 2005, Katrina/New Orleans re-build - 200+ billion, dollar and related investments (bonds) sinking and hitting all time lows, continued foreign (mainly China and Japan) financing of deficit with foreign debt, oil approaching all time highs, stock market at 11,5K (May-June 2006) and flirting with all time highs, housing prices and appreciation at all time highs - but absolutely NO job or salary growth, enormous twin deficits, skyrocketing consumer debt burden and lowest savings rate cushion ever ($.40 for every $100! - 2005), stagnate and declining wages, high (and getting higher) inflation, stagflation, continued corporate and government scandals, continued lay offs, increasing defaults and foreclosures. Finally, two wars being fought (flirting with a third with Iran) simultaneously on credit! Fought largely alone and with no real possibility of recouping investment costs… Baffling! I just don't see how a 'soft landing' will pan out here. My observation of the USA is that she only acts - drastically - when slapped HARD across the face! She needs a nosebleed - she needs a recession to straighten out all the excess and an opportunity to get all the old “foggies” out of positions of power. People - collectively - need to 'feel the pain' before they are really willing to work together and make the tuff decisions required for a lasting recovery. (For god sakes, be prepared and have the fortitude, education and a step-by-step plan of action to JUMP when bargain opportunities present themselves. It takes too damn long for them to come around again).