This is Part 1 of an article series which takes a look at 7 steps to lift yourself out of the recession, no matter how deep it gets.
Fear is also the most important factor in financial markets because fear drives decision to buy and to sell.
Most of the actions taken by the governments since the stock market collapse of 2008, from bailing out companies to increasing the FDIC insurable amount from $100,000 to $250,000 to saving large financial institution, has been about containing the panic of financial markets.
This is about the only thing that the government has been successful at, containing the panic.
But that doesn’t mean that the panic wasn’t needed or justified. The market needs to adjust to the real value of asset prices in dollars that are not worth as much because of decades of inflation.
In time the phony economy 2.0 will be exposed, and when it does fear will grip the markets only this time the Fed will not be able to calm or contain its spread.
As unemployment remains high and benefits continue to run out, fear is already becoming part of the new culture.
As mentioned in this article series introduction, low interest rates (inflation) cannot fix the damage created by low interest rates (inflation). Yet no politician wants to stop the money pumping. They know they are creating a disaster, yet they refuse to stop the madness for the sake of one more election.
The currency monetary policy of our nation leads to hyperinflation and the only way to avoid hyperinflation is to change course.
At some point in the near future, the government will have to change course and when they do the economy will begin to sink and the Fed will have to choose not to continue on the path to hyperinflation.
They are going to have to let it sink.
Perhaps you have already been gripped with fear. Fear can do two things, 1) it can cause you to act quickly and 2) it can paralyze you.
The best way to confront fear is to be aware of every possibility and to focus on a future position that you are certain of.
If you are aware of the imminent possibility of the resulting phony economy 2.0, you can be prepared for the pending disaster and therefore will not be afraid when things happened that you have already anticipated. (like the next stock market crash)
For example, anyone that lost money in the housing market crash would have been able to avoid there losses if they would have listened to Peter Schiff in 2006.
Focus on Something You Can Count On
If you are focused on a future position that you can count on, then you will be able to ignore the noise around you and remain focused on your goals, your business and your investments.
Focus is very important in confronting fear, just as it is in starting a new business. Set your sights on something in the future that you know to be true and whenever your keens start to wobble, refocus on that thing.
If you are informed and focused on a long term goal, then when fear comes your way you can resist acting quickly or becoming paralyzed.
We Are All Buyers and Sellers
In Peter’s new book, “Crash Proof 2.0” he explains how Fear and Greed will forever be part of the financial systems of the world and that they are inherently good because they simply represent the unwillingness to lose something and the desire to get something.