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America Is On The Verge Of An Economic Catastrophe

 I don’t need to remind you of the frightening economic data Washington doesn’t want you to know — the nearly $13 trillion debt, 90% debt to GDP ratio (that does not even include the off-budget items, such as the $6 trillion owed by Fannie Mae and Freddie Mac, or the $50 trillion of unfunded liabilities for programs like Social Security and Medicare)… And I certainly don’t need to reiterate the urgency of this situation. You know how severe the ramifications will be if we fail to take immediate action

Peter Schiff`s comments on the economy, stock markets, politics and gold. Schiff is the renowned writer of the bestseller Crash Proof: How to Profit from the Coming Economic Collapse.

16 Points for Day Traders

Accepting risk may cause losses, but accepting unfunded liabilities and negative skew can bankrupt us.

Use models not to predict, but to create a range of possible outcomes for which we can plan.

Markets follow cycles based on the perceptions and actions of its players, and one can gain alpha by using these cycles to manage risk and reward.

Markets SEEK efficiency, but offer tremendous opportunities while traveling from inefficiency to efficiency.

Both people and machines have flaws, so use the best attributes of each for peak performance.

Forecasting is necessary but should be timid in nature, while action is not always necessary but should be BOLD on the occasions when conditions dictate it.

Risk management is made more complete by searching for information that differs from your analysis rather than by that which confirms it.

Successful practitioners turn mistakes into assets by generating learning experiences and continuous improvement.

Remember to distinguish between clues that are necessary, vs. a complete picture revealing a group of necessary AND sufficient measures.

Markets can be generally explained 95% of the time, but extreme events happen much more than a bell curve would indicate…using options guarantees that we’ll survive fat tails and grab positive skew.

We are certain we DON’T know what will happen, so the best approach is to figure out what WON’T happen and blueprint accordingly.

Diversification reduces risk most of the time, but we assume all assets are linked and eventually correlate.

It is critical to have both a brain and a gut; the ability to find an edge, and the fortitude to trade it aggressively.

Profitable opportunities are best entered in the earliest stage of latent power being converted to energy. Too soon is a waste of capital, too late involves too much risk.

Virtually all long-term strategies are positioned to simply ride the tailwinds of rising prices. It is imperative to have methods to protect us from both headwinds and crosswinds to avert disaster.

Treat volatility as a psychological risk to be managed into an ally, not as a financial measure of risk to obsess over.