The depression is coming. No, not the financial markets. The depression I'm talking about is the rapidly approaching onset of winter. We all love waking up to crisp, fresh, snow-covered parks and seeing the trees hang with icicles, how lovely.

But then... within a few days, all has turned to hell. The snow, once so enjoyable and spirit-raising has started to melt and become trodden with dirt into a grey slush which accumulates along pavements, at entrances and generally everywhere. Alongside that we also have the biting cold wind, amplified by the man-made wind tunnels of skyscrapers.

Hi everyone. We are back this week with Part 2 of the Peter Schiff Interview (see part 1 here)

Q: What can we do in the short term to protect ourselves as investors?

Peter: It’s important to know what types of investments to avoid. Treasuries, or in fact any dollar denominated debt needs to be avoided because again, either you are not going to be paid back or you are going to be paid back in money that doesn’t buy much. So, either way you are losing. So you have to protect yourself; gold/silver, commodities in general, stocks are a way to go although I like foreign stocks better than most domestic stocks, and emerging markets.

I recently completed my first trip to Spain and before leaving, I couldn’t help but wonder whether the effects of the sour economy there would make themselves noticeable to the average tourist. The answer was surprisingly: Not really. Of course, since it was my first trip there I didn’t have much of a basis for comparison. I also only visited the tourist hot-spots of Madrid and Barcelona. However, from what I did see the general mood didn’t seem too much different from that of a tourist destination in the US.

By no means do I intend to minimize the pain of the Spanish people, as their unemployment rate reached 24.6% during the second quarter, with the rate over 50% for those under 25. This compares to the historical peak of unemployment in the US during the Great Depression of nearly 25% as well. However, the appearance of the country is not even remotely similar to these “Hoovervilles” in the US from the 1930s. Why such a stark contrast?

The pressure to succeed in life is hard to measure. The one thing we know about Wall Street is that there are no crevices to hide from it. Hundred hour work weeks, pipsqueak VPs sending you for coffee and a life in a cage while your compatriots party their twenties away are enough to chisel frown lines on anyone's forehead. This is a life choice that I certainly can't hate, as I do believe in a correlation between suffering and success. Any pursuit is admirable if it is genuine and causes no harm to anyone but you and those you love the most.

This is why today I am bringing up a subject that nobody likes to talk or think about. Suicide. This is a very high stress game folks. Some of you are currently learning the hard way what many before you did in the same fashion. That is why the subject of mental health is one worth bringing up and mulling over seriously. The story of Jared Dillian, former trader at Lehman Brothers is a fine example. Things can spin out of control quickly, the only prevention is preparation.

Everything's up for debate in the new normal. One day we're up, one day we're down. One day I'm asking about a 6,000 Dow...today, I'm pondering it at 15,000. It seems the world has become inherently volatile, but then you talk to a trader and he tells you that there is no volume. One day it's $40 to fill up your gas tank, one day it's $65. Everybody is feeling the shocks and jolts of the changes around us but nobody can say why for sure.

As much as I wish, as hard as I try...won't stop beating on currency...until I do die!

Today, I'm recoiling from a night of a thousand beers, six table dancers and seventeen pounds of roasted lamb and pork. So, dim sum is just about the last thing I need to be thinking about.

That having been said, as time goes by the more I am looking at QE2 as an act of war than as any sort of monetary policy maneuver. Whoever still buys into the wives' tale of the Federal Reserve being an independent agency, must like old spy movies and the notion of rogue patriots out there doing good on behalf of the meek and the week.

What is a recession? I no longer know...not quite sure I ever did. The gap between reality and perception has widened expansively as of late. According to our friends over at NBER the "Great Recession" ended in June 2009. Like many of you, I can regurgitate a few different textbook definitions with varying degrees of depth and accuracy on the subject. But how do we really define a recession or better yet, how do we separate it from a depression?

As the old economist joke goes: A recession is when your neighbor loses his job, a depression is when you lose yours. Though "knock-knock" prima facie , there is a lot of truth in this statement. Perception easily becomes reality.

Do not double dip, young man! Mother always said...

"If you double dip, you may end up dead!".

5 years ago, what sort of chance would you have given this nursery rhyme of becoming a reality ?

In a perverse comedic orgy the likes of which I do not recall...there still seem to be people who need to hear this sort of thing again and again. The Ostrich Syndrome is strong in some, young padawans. Beware the Dark Side.

I know that the following story will hit close to home for some of you. For those who cannot relate, consider the implications of the things you do today and everyday, all the while thinking tomorrow is promised...

So The New York Observer recently ran this story on what they're calling the "new doom," which essentially is a festival of quotes from those on Wall Street about how the country is destined to become a giant sinkhole of failure. We're headed for a third depression, and "the rot isn't going anywhere," and fire and brimstone, and George Steinbrenner's dead, yadda yadda yadda.

For those (other than the Chinese government) looking to diversify out of U.S. dollars, it might be time to start looking at Spain. I'll admit that I have an advantage living next door in France, but this is a situation I've been watching for some time now.

The Spanish economy is entering a full-blown depression that is not expected to abate for many years. Unemployment is expected to rise to 25% before things get better. The collapse in the Spanish housing market makes our real estate mess look like a seasonal fluctuation.

http://www.telegraph.co.uk/finance/economics/62283...