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Welcome To Vilcabamba
"The Sacred Valley of Longevity"

This Is A Privately Circulated Blog, scribbled exclusively for Friends & Familiars, that peers into and pontificates about Expat life in the hinterlands of South America. If your eyesight is less than optimal (like mine), then just click the type size up a notch on your browser..

Here you will find a series of curmudgeonly commentaries that I've posted from atop my rickety old soapbox for the past few years. And yes, there are indeed political rantings, so place your seats in the upright position and fasten your seat belts .... it may be a bumpy ride.


How This Financial Deflation Effects You!

For those of you who are still feeding your 401K "savings" accounts and "investing" in mutual funds, you are probably doing so because you feel there's no alternative. If not your 401k or money market funds, what?

Well, let's look at that for a moment. What if you had NOT invested in stocks for the past whole decade, from 1999 to 2009? In other words, just stayed out of the stock market. Interestingly, if you had just held on to the cash, earning no interest at all, you would be 26% better off. Had you put those 401K yearly infusions into gold, your holdings would have appreciated from US$285.00 to US$923.00. That's an increase of 220 percent! Here is the scorecard, as presented this week by "The Privateer", the much heralded financial newsletter.

They used $1000.00 as a constant:

* In Stocks: $10,000 on March 30, 1999 becomes $7400 on March 31, 2009
* In cash: $10,000 on March 30, 1999 remains $10,000 on March 31, 2009
* In gold: $10,000 on March 31, 1999 becomes $32,060 on March 31, 2009

Most of you who are dutifully keeping up with your contributions to a mutual fund or a 401K, which STILL allocates 80-90 percent to the stock market, will simply not believe these figures. It seems that most of my friends and familiars remain in denial.

Fortunately for me, during this past decade I was too old to continue contributing to a 401K. And thanks to "The Privateer's" early warnings, I got out of my mutual fund. I stayed in cash and bought a little gold. Take a peek above and tell me if I made the right decision.

So, if this is what happened in the past ten years, during a mostly booming market, what do think will happen to your 401K's and mutual fund accounts during this financial disaster we are currently facing …. and which is only going to get worse! Go on, look up at that scorecard again.

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