Presented by: Eric J. FryPresented by: Eric J. FryEditor of “The Rude Awakening”Editor of “The Rude Awakening”www.the-rude-awakening.comwww.the-rude-awakening.com

The First Will Be Last…The First Will Be Last…Or at Least a Distant SecondOr at Least a Distant Second

A Pictorial History of American A Pictorial History of American Economic Trends…Economic Trends…

Our Story Begins in 1959Our Story Begins in 1959

19591959

1959 – America is the Economic 1959 – America is the Economic Envy of the WorldEnvy of the World

1965: Manufacturing Shipments as a Percentage of GDP Hits its

Peak

0%10%20%30%40%50%60%70%80%

Dec

-59

Dec

-64

Dec

-69

Dec

-74

Dec

-79

Dec

-84

Dec

-89

Dec

-94

Dec

-99

Dec

-04

1971 1971 – Nixon Close the Gold Window and – Nixon Close the Gold Window and Inflation AcceleratesInflation Accelerates

1986 – Federal Debt Tops $2 1986 – Federal Debt Tops $2 Trillion for the First TimeTrillion for the First Time

1992 – Federal Debt Tops $4 1992 – Federal Debt Tops $4 Trillion for the First TimeTrillion for the First Time

1996 – Federal Debt Tops $5 1996 – Federal Debt Tops $5 Trillion for the First TimeTrillion for the First Time

2009 – Federal Debt Tops $10 2009 – Federal Debt Tops $10 Trillion for the First TimeTrillion for the First Time

““I think we’re closer to the end of I think we’re closer to the end of the [credit crisis] than we are to the [credit crisis] than we are to the beginning,” the beginning,”

Treasury Secretary PaulsonTreasury Secretary PaulsonApril 30, 2008April 30, 2008

““Formula for success:Formula for success:

- J. Paul Getty- J. Paul Getty

““Formula for success: Rise Formula for success: Rise early, early,

- J. Paul Getty- J. Paul Getty

““Formula for success: Rise Formula for success: Rise early, work hard, early, work hard,

- J. Paul Getty- J. Paul Getty

““Formula for success: Rise Formula for success: Rise early, work hard, strike oil.”early, work hard, strike oil.”

- J. Paul Getty- J. Paul Getty

The New “Permanent Portfolio”The New “Permanent Portfolio”

1) Commodities (Including Gold)1) Commodities (Including Gold)2) Emerging Market Stocks (BIC)2) Emerging Market Stocks (BIC)3) Value Stocks Worldwide3) Value Stocks Worldwide

* IVA International * IVA International * FPA First Pacific Fund (FPACX)* FPA First Pacific Fund (FPACX)

4) Liquidity – Volatility Dampeners4) Liquidity – Volatility Dampeners

““Risk comes from not knowing Risk comes from not knowing what you’re doing”what you’re doing”

- Warren Buffett- Warren Buffett