There is about an hour and forty-five minutes left in 2011 in the US Eastern Time Zone as I begin writing this blog.  The media has begun its New Years Eve programming and is preparing to ring in 2012. 

I would like to thank my readers from all over the world that have visited thepurplemuse.com this year.  The purplemuse.com has had significant growth in unique visitors and page visits this year.  I hope you have found my blog, articles and twitter feed stimulating in some way.  Some you may agree with my perspective, others may violently disagree or you may not care about the issues I care about.   No matter what point-of-view you have, I hope your visit to thepurplemuse.com was worth your time.

Unfortunately, most of the difficult political/financial problems that we face in the world were not resolved, or even addressed, in any material way during 2011.  The political/financial failures to act decisively that took place in the US, Euroland and other areas has just made the problems worse.  The clock is ticking on the politicians and central bankers to rationally address the issues.  They must tell the people the truth about the extent of the problems that have been created.  There are no simple solutions.  There are no easy ways out.  Tens of millions of people will feel a lot more economic pain before the world political/financial restructuring that is in process runs its course. 

New Years Eve is traditionally viewed as a joyous occasion. Most people want to look at a new year with optimism that it will bring improvements in their lives. Many people will be attending parties and having fun times.  I hope everyone that is partying has a good time tonight.  Because in 2012 or in some other year in the fairly near future the fundamental changes that are required to restore balance to our political/financial world will happen.  The changes will not be joyous or fun.  However, when that year comes it will be time for a great celebration.   We will have put our nation and our world on a sustainable path forward.  Hopefully, we will have eliminated the policies that created the political/financial mess that we have to collectively clean-up.

I wish all of you a productive 2012, about 45 minutes are left in 2011. 

TPM

I recently read Warren Brussee's book, The Great Depression of Debt - Survival Techniques for Every Investor.  This book includes some very interesting analysis and the timing of its publication is particularly interesting.  The copyright date is 2009 but it appears the majority of the manuscript was completed by the summer of 2008, although the book's preface states that the author is writing the book in late 2008.  There is no mention of the bankruptcy of Lehman Brothers and AIG or the government's TARP program and the culmination of the 2008/2009 financial crisis.  Mr. Brussee attempted to predict what would happen during the obvious financial crisis that was building at the time he was writing the book.

Mr. Brussee did a good job of describing the economic and stock market environment that led up to the financial crisis.  Unfortunately, he had no idea as to the lengths the US government and Federal Reserve would go from a deficit/debt/stimulus perspective to prevent the depression Mr. Brussee predicted would occur from occurring on the Mr. Brussee's timetable.  Do not assume that a depression of some sort will not occur in some form at some point in the years ahead.  The massive dept build-up by the Federal Government may have only deferred a depression.  A depression or another severe recession could very easily occur due the US government's much weaker economic state caused by its massive debt and much higher debt to GDP ratio.

Mr. Brussee advocates the use of US government Treasury Inflation Protection Securities (TIPS) as a primary investment vehicle since he expected the stock market to tank during the depression that didn't occur.  Mr. Brussee presents a lot of analytical data that has some value.  Unfortunately, no one can predict what actions the US government and Federal Reserve will take in the future and how world markets will react and adapt to those actions, so a book like Mr. Brussee's has limited long term value.  Mr. Brussee doesn't like gold as an investment option.

The book is worth reading for those that are interested in more analysis of the build-up to the financial crisis.  I could not recommend that serious investors should read.  It is already far out of date.

TPM

Recently, I read Cullen Murphy's book, Are We Rome? - The Fall of an Empire and the Fate of America.  Mr. Murphy skillfully outlines much of the history of the Roman Empire with particular focus on the reasons for its decline and fall, perhaps better described as evolution.  Mr. Murphy contrasts the brief 200 plus year history of the United States of America, which has achieved superior power status for the past 65 years, to the roughly 500 year span of the Roman Empire, which followed 500 years of the Roman Republic.

The US and Roman Empire evolved during completely different periods of history. However, there are many similarities between the two powers.  If there is one word I would use to describe the fundamental human trait that makes the two situations similar, it is "arrogance".  When individuals, teams, groups or large populations reach the top they believe they are omnipotent.  They often lose their ability to adapt to new situations because they are always right because they are kings-of-the-world.   I believe the leaders of the Roman Empire and the US reached extreme levels of arrogance.  I believe that the fundamental problems that the US faces today and are documented in articles on www.thepurplemuse.com are a direct result of the arrogance of our political leaders. 

Many people believe the US is in a state of decline that will eventually result in the loss of its superpower status.  It is very easy to comprehend the logic that leads to that conclusion.   However, the US has the opportunity to avoid the same ultimate outcome as the Roman Empire.  Throughout its history the US has changed and evolved due to a variety of influences.  I hope that our democracy will deliver new leadership that will fundamentally change the policies that have put the US into decline.  We don't want the US to become a footnote of history.   We want to reinvigorate our nation and our people to evolve productively into the future.

Are We Rome? is a great book.  I suggest you read it. 

TPM

Check out the updated cruising section of the web site, http://www.thepurplemuse.com/id35.html.  My wife and I just returned home from a five week cruise.  Most of our cruise took place in the Mediterranean.  Our cruise also including crossing of the Atlantic Ocean by ship for the first time.  We completed the second of four cruises we have planned that will allow us to circumnavigate the world by cruise ship. 

Next year we plan to cross the Pacific Ocean and visit many of the major cities of Asia and sail into Sydney harbor.  We will also visit some South Pacific Islands and Hawaii by cruise ship.  It will be the longest and most strenuous cruising adventure we have planned or envisioned.

Our explorations of the world by cruise ship have been very enlightening.  I will be updating a number of articles I have previously written in the weeks ahead to reflect some new observations based on our first hand experiences.

TPM