Journal is Back

August 21, 2004

After being down for several months due to malicious spammers, and my lack of time to address the problem the joural is now back! The problem was that some spam bots came by and posted literally thousands of malicious comments with links to porn sites. As a result, I took the blog down completely. I downloaded the orginial posts and cleaned them up by hand in HTML. They are back, but no longer open for posting. The archive with most of the original comments can still be found at:

For the time being, I'll keep the new posts open for posting for about a week, so if you want to say something, act fast! Seize the moment! You have no idea the grief and heartache it caused to have 6,000 comments linked to the most heinous, disgusting websites. At the same time, I took down my Depression 2 email, so if you've written in the past several months, I apologize that I did not see it. I just checked the server yesteday and found there were over 12,000 emails waiting for me.

What else should I be? / All apologies.

I deleted them all without thinking twice.

If you know of any MT plug-in solutions that can solve this, please let me know via email at: manystrom yahoo com. Just type the email in regularly - this format is just to try to discourage the bots that come by, read the email addresses and then start in on the spamming.


When I worked as a stockbroker, there was a client who always called up and the first words out of his mouth were: "How's the bear market?" That was back in 1998 - so he's been waiting a long time! (If he is still waiting at all)

I'm living and working in Taiwan now, so I don't have such a good read on the US economy from here. From what I see, it looks grim. I'm so glad I don't have to deal with the presidential politics - they have their own brand of nasty politics here, but at least I don't feel bad viewing it strictly as entertainment. There is no illusion that I can change anything here in Taiwan.

The economy here is, by my eye, booming. There is new construction everywhere - factories, apartments, new restaurants opening. The town that I live in, Hsinchu, is a hot tech town. Nobody is starving here. Chinese people are very optimistic on the surface, but dig a little deeper and a grave pessimism emerges. They are the same worries that everyone has -- that all the jobs will move to mainland China. Taiwan has lost a lot of manufacturing jobs to China already, and more are moving all the time. The environment here is a disaster - pollution, smog. The atmosphere in the city is simply toxic. Everyone knows it, but what can one person do? The futre does not appear bright, in spite of the record profits that the tech companies are making. The stock markets in both Taiwan and Shanghai are down big for the year, reflecting the pessimism. Oh, and then there is the ever-present specter of an attack by China.

Life, in spite of all of that, is good. I've got a good job at Taiwan's largest industrial technology research institute, I'm writing a book and I'm thinking about starting a PhD in technology management.

I won't pretend to know why the US markets are going up in the face of $50 oil. I won't pretend to know how high gold will go by when. I'm still a closet bear on gold for the short term. I still hold fast and strong to the idea of the Second Great Depression, it is only a matter of time. I've got one eye on the situation, while I live a full life. Better a full life than a life half lived, as they say. I have already said everything that I can think of to say about the unfolding depression, and you can find it all on this website if you browse the pages. While you're at it, please try to click on an ad or two to support the site. I would appreciate that much.

The depression will take its time, and like my former client above, I am still waiting. It is going to be bad, and ugly. If you want good strategies to profit from it, check the Elliot Wave page. Shameless plug? Sure, but I believe in their message and their forecast. Timing this thing is the hardest part, but their timing lately has been great.

And a final note: Don't be afraid. Fear is a state that can only take place when you're thinking about the future. But the future is inherently unpredictable - we have no idea what will happen. Maybe all this depression talk is just bogus. Stay in the present moment, and there is nothing to fear, because there is no room to fear. As good old Curt Cobain put it:

In the sun / in the sun / in the sun / I feel as one.

Best to everyone,

Michael Nystrom
Hsinchu Taiwan, August 2004

Posted by manystrom at August 21, 2004 04:29 AM

Thanks for taking the time to get this back up Michael. Let's hope this time there is no attack. The past couple of months I've only had the time to keep links going on a sporadic basis myself, so readers have had no new content to digest. My inability to technically fix areas of the site has been very frustrating.

I've also pretty much had nothing to say worth saying lately as, like you Michael, I believe the site contains almost all there is to say in this pre-election environment.

This year has not produced any significant shocks, and the pending crash is still pending - per predictions made on this site at the beginning of the year.

The election is the big wild card, always has been. If we can survive the election without a coup d'etat, then move in to office a new president, and make it through to next year then I believe that is the best we can all hope for. I still seriously doubt that the criminal cabal that currently occupies the White House, and it's tentacles throughout the US government, will be removed without a fight - - this is going to get ugly at some point, they aren't going to peacefully disappear in to the night.

Looks now like oil will undoubtedly touch $50 and above, maybe even $55. Gold should go to $450, the DOW will probably trade around 10,000 and interest rates will slowly rise in the US (as they are in the rest of the industrialized nations).

So, 2005 is the big year to watch for major economic changes - - No 2nd Depression in 2004!!

Cheers Rich

Posted by: Rich Lancaster at August 22, 2004 07:46 PM

Great to have you back!

Posted by: Rich Lancaster at August 22, 2004 07:47 PM

Unless the US gets some form of divided Government in this election, either Kerry or a Dem contolled Senate, I believe things could deteriorate rapidly. Consider, if Bush gets a 2nd term and Rep. retain Congress. #1 TAX CUTS will be PERMANENT. #2. Bush likely to INVADE IRAN viz a vie Najaf. Oil easily $100/barrel.
I could Imagine GLOBAL FLASH POINT by 2006. And this assumes Al Qaeda checks the BET.

Posted by: greg at August 23, 2004 09:53 PM

Thanks Michael for your great site i read it often.
I agree with the previous commentary not much is going to happen in a big way even with oil at $50 . Its amazing how resilient everything is by beign optimistic and printing more money !

One thing though i expect is a major series of terrorist attacks.
Lets face it the follow up to 9/11 is near zero on account of their lack or resources and planning. as the years tick by they are planning and teaming thier talent with new resources and volunteers. If i was a terrorist i would feel very cocky once in the country with a good stock of credit cards.
Truck bombs are an easy thing to organise.
not to mention a host of other deliverable systems. As each month ticks by the likelyhood of some major event draws more likely.
Personally i dont see much occuring until maybe the election and if not then, some time next year. but of one thing i am sure off is that it will be big in a cumalative manner and that it may have the ability to shift the whole consumer based economy . Which as we know is the economy!

Sorry to be a pessimist but the good side is that it will be a bittersweet time for contrarians to hold silver and gold in a safe place.
It could well be the camel that breaks the housing bubble and other things. I owned a high end store after 9/11 and trust me it was a stretch surviving the sudden lack of buying customers. I think a lot of shop owners havenot built up thier cushion since then.
So my main message is this...... be very cautious next year. consolidate your resources , cash will be king along with the metals and try to payout any loans or dont over extend yourselves.

By this time next year i suspect the show will have hit the road. It has been a very long time in coming and the sad thing is it wont just be affecting the US but the rest of the world as well.

so even though oil, food commodities and interest rates will be going up this wont sink us . But merely make us more vulnerable. It will i think be the mental emotional over reaction of the general public to some hieneious series of terrorist events.
down the line interest rates will turn nasty in order to protect the absurd number of paper dollars in the world as america will not want to lose its power in the face of a currency crises.
taxes will skrocket for the property owners
and this will become a new form for the larger tax base. The government wont have a chance to not do this. this will also make investments in property a double wammy. I dont think its an if but a when.. and sadly i think it will be by end of the third next year.
Sadly it wont really make any difference who is elected President who i think is most likely to be Kerry.
All the best to the visitors of this site.

Posted by: NIck at August 24, 2004 06:24 AM

I'm interested in how our friend "bubbles" Greenspan intends on attracting the massive influx of foreign investment that will be required between now and november...significant interest rate hikes could be on the way to bolster the buck and get financing from people that will demand a positive return on their bonds ( considering inflationary pressures ). I've read somewhere ( everywhere! ) that this economic environment will make the rate spikes in the early eighties look minor.

Posted by: chris at August 25, 2004 01:21 AM

Hey Chris.

Here is some perspective for you on the foriegn investment issue.

Should the US $ falter the big Asian economies will go under, so they are propping it up with every last yen and yuan they can muster - even though they must absolutely fear that holding so much US paper will be a massive mistake over the long term. Basically what else or where else can any central bank or even private investor shelter from the coming storm?

The only answer I've come up with over the past 4 years has been gold! That's great for me but not very practical for the Japanese or Chinese central banks, not enough gold to go around!

Cheers Rich

Posted by: Rich Lancaster at August 25, 2004 06:39 PM

Yeah good to have the site back. I've been wondering what happened ...

Chances are Bush will get reelected. And he will be forced into Hoover's clothes...
Back in 1929 the USA were rich in gold and savings ... They had no troops abroad. So the next recession might well hit even harder.

I'm not so sure depression will wait till 2005...
Flat year for stocks.
The housing bubble might well be topping right now (sales fell in july). We'll see about the next employement figure ...

As america and asia fall simultaneously, fate may favor again europe and Latin america. All those who seek growth from within. Globalisation is very probably a dead concept. It reached it's peak with the creation of the WTO...

Yeah, depression in figures, will not start in 2004, but everything is already in place and 2005 will start as a nightmare.
If bush is reelected he might well be impeached ...
Bold times ...

Posted by: DF at August 30, 2004 11:59 AM

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