I began publishing my monthly newsletter The Bob Livingston Letter™ (subscription required) in 1969. The following is an excerpt from the August 2005 issue. Many Americans were caught unawares when the world economy, led by the collapse of the U.S. housing market and the funny money derivatives market collapsed in the fall of 2008. Readers of my letter, though, had ample warning of what was ahead and time, not only to prepare, but to make money along the way. In 2008, just before the collapse, the price of oil peaked above $145/barrel.
1. Oil — The public has not accepted the oil price skyrocket. The price per barrel is already over $60 with the projection of $87.00 soon. I can easily see $100/ barrel oil. This is not only an oil bull market but an oil shock.
2. Housing Mania — The housing bubble is now in the mania stage with potential for collapse at any time.
3. Deflation — Though we are into an inflation cycle, clearly any financial accident could reverse the economy to harsh deflation at any time. We do not expect deflation now because of the central banks’ high motivation to create new money. The whole world hangs on US inflation potential. We have to have it to keep the game going. Long-term it’s black hole deflation and a whole new world. We advise everyone to stay liquid. Avoid debt and hold some cash or equivalent.