Recession street sign
I am not sure what Mr. Schmidt means by "Peak Oil", but I am in full agreement with his belief that now is not the time to buy stocks unless you have at least a 10 year time window. If oil continues to rise the way it has, the Federal Reserve will be forced to raise interest rates to rescue the dollar; no matter how bad the overall U.S. economy is doing. There is still a gigantic deflation monster out there, and it's is just waiting for interest rates to rise, so it can do to New York what it's done to Tokyo. The DOW will then fall below 10,000, and if Japan is any indication, it could remain stagnant for more than a decade. However, I am still keeping about 20% of my 401K in stocks, just to hedge against the minute possibility that Mr. Schmidt and I might be wrong.
The opening of your show this morning with an advisor who suggests that now is the perfect time to buy stocks because they are cheap is about the most irresponsible advise I can imagine given that Peak Oil is now staring this economy in the face.
Where have you been? Peak Oil has been discussed and foreseen since 1999. But strangely, I am not surprised--in 1999 Chris Farrell advised a caller to put all of her inherited money into the market at one time since studies showed lump sum investments into the market were best--and up until recently Chris Farrell also insisted there was no national housing bubble (only a few local hot spots).
Because of Peak Oil, the stockmarket is almost certainly a dead man walking and I predict that most of your staff will soon feel ashamed for having advised listeners to put even more of their money into the stock market at this time--but not Farrell--because according to him, bubbles are good and all that listeners will have to do to survive Peak Oil is to tighten up their budgets for a couple years until the good times roll again--NOT!
Wake up, NPR--and start thinking about your listeners.
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