2/25/2010

When we arrived in Vancouver, we were greeted at the airport by NBC. We were personally walked to a custom coach and transported to the Four Seasons hotel with the other NBC guests. Inside the hotel they set up a 24/7 ballroom for our group. In this room were giant TVs, three bars, and gourmet buffets from 7am to 11pm all on the house. You could literally eat and drink as much as you wanted to. The service was spectacular.

Night one we attended the short track speed skating which was awesome. You cannot appreciate the strategy, toughness and speed in which they skate. We watched the final where Apollo Ohno slipped, regained control and sprinted past two tough Canadians to win the bronze.

Day two we caught Russia vs. Czech in ice hockey. The place was mobbed with Russians all sporting there colors and pounding beers. The game was inspiring. The crowd was singing, dancing, beating drums and flipping out over every check. In the end, Russia won 4-3. What’s amazing is, after the match they have this ritual of both teams congratulating there Goalies that the teams congratulate each other. Not one person in the crowd moved from their seat till every player left the ice. In the USA they would head to the exits with two minutes left.

Day three we left at 6am and drove up into the mountains to watch ski jumping. This was amazing to watch. These guys fly 135 meters off the mountain. That’s like 1 1/2 football fields. I have some great photos that I’ll pop on this site shortly.

We then went out to dinner and had the single best steaks we had in our entire life. After dinner we headed to this Irish beer garden with this enormous line. Of course a hundred dollar bill solved the line problem. We drank and watched the patrons get drunk and dance till midnight. It’s amazing that we’ve seen no arguing or fights even with the massive amount of alcohol consumed. The people here are enjoying every moment.

The last day (Wednesday), we went shopping for the kids during the day, then attended the ladies short program ice skating. We got to watch Joannie Rochette of Canada skate just days after her mother had a heart attack and passed away. The crowd went nuts as she entered the ice. Joanie did it flawlessly, bravely, passionately, her resolve and spirit impenetrable, her blades guided by some invisible hand. There was not a dry eye in the building. She put in a career best performance and finished third in the first round. Lisa and I along with millions in the world will be rooting for her tonight to earn a metal.

The trip was magical. It truly was an experience I’ll remember for the rest of my life. The people of Canada were gracious, enthusiastic, and fun being around. I must say that the Olympic spirit is infectious. The Canadians just line the streets and hang out all day. There were corners with thousands of people just enjoying the moment. Lisa and I would ask what’s going on and people would say “The Olympics”.

In 2014 the winter Olympics will be in Sochi Russia. I can only imagine how fantastic that will be.

John Marazzi

Here we are December 31, last day of the year. Wow, what a difference a year makes. First, I want to thank each of you personally for the success you helped John Marazzi Nissan obtain.

On a side note, during the year I gave my opinion on some financial ideas. Here is a roundup of how they fared.

Last, take a moment and read the following remarks by my personal hero Richard Russell. Richard writes a daily recap on the markets. He’s considered a legend in the financial services industry. I enjoy his comments on the markets, but what I enjoy most is his musings on life in general. Richard is 86 years young, was a fighter pilot in WW2, and has forgotten more about the markets then most financial advisors know. You can subscribe to him at http://ww2.dowtheoryletters.com/ 

If you don’t have some physical gold and silver in your portfolio, you might want to get some …

Have a great 2010,

John

Comment on the Stock Market by Richard Russell:

December 29, 2009 — It’s easy to be deceived by the near-term picture. By that I mean it’s easy to lose perspective when you are struggling with the daily and even the weekly market action.

Over the long-term, the big fundamental picture will often reveal itself. For instance, consider this. In January 2000, the Dow was selling for just over 11000. At the same time gold was selling for about $280 an ounce.

Today the Dow is selling for about 10500, actually below its year 2000 price. Gold is selling for over 1100, four times its year 2000 price. So what does that tell us? Gold has represented the standard for wealth for over 5000 years. Consequently the above tells us that the Dow and the stock market have failed to conserve our wealth.

Below, the Dow from the year 2000.

Below, gold from the year 2000.

It tells us something else. Since the year 2000, the Fed, the know-nothings, and many analysts have been bad-mouthing gold, which some still call the “barbaric relic.” In the face of all the bad-mouthing, how is it that gold has risen from 280 to 1100? Clearly, some investors have been buying the precious metal, all the while ignoring the nonsense spewed by the anti-gold elements.

Now consider this — almost everything — housing, stocks, commodities, bonds — has declined in terms of gold. That tells us that the forces of deflation are now weighing heavily on the world.

Let’s take it one step further. Over the last year the US Fed and most other central banks have been flooding the markets with their fiat currencies. The question is — in the face of all this currency creation, why aren’t we seeing all-out inflation? The answer is that the forces of world-wide deflation are more powerful than any inflation that has been created by the central banks.

In the meantime, a towering mountain of debt has been built. This debt will have to be financed, paid off or reneged on. This mountain of debt acts like a sponge — it absorbs billions of dollars every week and month of the year. Since this debt “eats up” money like a hungry shark, it’s deflationary. And remember, with interest rates currently low, this debt has already been “eating up” money. What happens as interest rates rise? Payment on the sky-high tower of debt will be prohibitive — it will be crushing.

It’s now widely held that gold has been rising “because the dollar has been falling.” I don’t subscribe to this simple thesis. I think gold is rising (being accumulated) because far-thinking investors don’t believe fiat money (money created by the central banks) will survive. Consequently, they are buying “wealth insurance” with gold.

What lies behind the dollar, the ruble, the real, the yen, the pound and the euro? In every case it’s the full faith and credit of the issuing nation. In other words, each currency is dependent on the health and viability of its issuing nation. Question — what happens in the event of a world economic collapse? What are the trillions in fiat currencies worth in the event of a global depression? My answer — these currencies could decline to the point where nobody would want to own them. In the face of a world depression, there is only one money whose worth would not be questioned, and that money is gold.

Ironically, it has been so long since Americans have used gold as money that they have forgotten the fact that gold IS MONEY. I think that mind-set is just beginning to change. It’s slowly dawning on most Americans that gold is the ultimate money.

If gold was a useless “barbaric relic,” why is the US holding the largest hoard of the yellow metal of any nation on this earth? And why has the US refused to settle its debts with gold? The answer is that someone in the Treasury realizes that gold is pure wealth, and the US government is not willing to give up any of our gold to settle our debts with other creditor nations.

Now here’s a thought. The US prices its gold at 42.22 an ounce. But suppose the US unilaterally announced that its gold was worth $5000 an ounce. If so, we could pay off our debts with high-priced gold. But would China, for instance, accept gold at a high price rather than our bonds and notes? Are you kidding, just try them. China would love to take in gold rather than US bonds.

And I have to wonder — is the following what Bernanke is thinking? After all, in 1932 Roosevelt raised the price of gold from 20.67 to 35 dollars an ounce. He did this in the fight against the deadly deflation that was so prevalent during the Great Depression. Could Bernanke be thinking, “If I unilaterally raise the price of the US’s vast hoard of gold to $5000 or more an ounce, it would be inflationary, and we’d get out of this deflationary mess. And, after all, who’d object if I raised the price of gold? And if I backed the dollar with gold, the dollar would continue to be the world’s reserve currency. If the dollar was backed by the world’s largest hoard of gold, what fool would be able to talk down the safety of the dollar?”

Russell Conclusion — The US is facing a brutal problem dealing with its unfunded liabilities. I can’t be the only one thinking about raising the dollar price of gold. Question — Why are China, Russia and the Asian nations so intent on building up their gold reserves? And why are so many central banks now reversing their stands on gold? Instead of selling their gold, the central banks are now trying to buy gold. Think about it!!

That’s the question on most peoples mind right now. Listen to the cheerleaders on CNBC, and you’ll be convinced that we’ll be at a new all time high in the Dow in just a matter of months. Over at MSNBC, we’re told President Obama is just the man to fix the disastrous situation George W Bush got us in to. Click over to Fox news, and you’ll believe we’re heading for socialism, communism, and an end of capitalism.

I find it humorous listening to the agenda’s of all sides. They all have a position to sell, and it’s a daily reinforcement they deliver to there disciples. The reality of the situation is it’s any ones guess what our country is going to experience in the near turn. The direction our policy makers have decided to embrace is unprecedented in size and scope. What I can tell you is I don’t agree with it. Keynesian economics never dealt with a credit expansion, and excess liquidity as a cause of a previous downturn. Yes Keynesian theory can control economic cycles with money supply growth. But what we are experiencing now is banks hoarding cash and consumers are struggling with high debt and fear of losing their job. Printing trillions of dollars might feel good in the short term, but it doesn’t address the real fundamental problem. Money printing will lead to a much lower dollar and high inflation. It’s just a matter of when. What’s really happening is, banks aren’t lending because they don’t have to. They borrow at .25% from the fed, and buy Treasury debt at 3.5% with no risk. Banks are preparing for the upcoming wave of credit card and commercial loans that are just now beginning to default. The result, average consumers can’t get credit at reasonable terms.

I am writing this blog October 11, 2009 at 4:45pm 30,000 feet up in the air on my way to Las Vegas. Why is that relevant? I’m glad you asked. It’s obvious that I believe that credit will continue to be a problem. I think our economy will continue to struggle with high unemployment, I believe our economy in general will struggle as we embrace this new normal. Many people classify themselves as either an optimist or a pessimist. I consider myself a realist. I’m heading to Vegas to attend a ground breaking new program to help consumers purchase automobiles without fear of being turned down for credit. My partner and I are researching a solution to help folks in South west Florida obtain reasonable credit regardless of recent financial problems. Two to three out of every ten people in our area may eventually fall victim to foreclosure over the next year or so. I’m working on a way to allow them to still buy a new or pre-owned vehicle and get the credit and terms they deserve.

So yes, I will take one for the team and spend three days in Vegas. I’ll partake in no blackjack, alcohol, or buffets. (OK maybe just a little).

Over the next weeks I’ll be working hard on this new venture and I look forward to sharing the details with you.

John Marazzi

I grew up in the car business. I washed cars at age 12, became a lot attendant at 15, and starting selling at 17.

It was 1982.  Interest rates were 18 percent, and inflation was still roaring. My dad was my boss at the time, and I remember him grousing about the Fed raising rates. Paul Volcker, then the Fed chairman, was focused on stomping out inflation and was raising rates aggressively. The bestselling car was a Ford Escort selling for just $5,999 with no air. Buyers put zero down and financed them for 36 months at 18 percent. The payment — $259 a month. That year turned out to be the last tough year for the car industry.

For the next 25 years, we went on an unprecedented stock market run, which propelled the car industry to an eye-popping 16 million new car sales annually. Sure, we had setbacks during the run: the ’87 stock market crash. The ’97Asian meltdown. And the ’01 recession. But through it all, the car industry powered ahead. 

Today I’m sad to say our cheese has been moved in a big way. We can’t count any longer on a downward cycle of interest rates. In fact, we’re about to have the opposite. The next cycle should see rising inflation and rising interest rates. There is no way our government can continue to print money without paying the consequences of a lower dollar. To fund our deficits, rates must rise to attract capital. Yes, we may have further deflation for a while longer, but soon it will be time to pay the piper for money printing.

So where does that leave us? The future is higher inflation, higher rates, higher gas and oil, and a lower dollar. The prudent thing to do is to get practical. Forget buying Mercedes-Benz, BMW, Lexus, and Infiniti. You should conserve your cash and buy a Nissan. Nissans are as good or better quality at half the price. And, you’ll be secure knowing that from Johan Marazzi Nissan you’ll have a lifetime warranty: unlimited time, unlimited miles, and good anywhere in the country.

You’ll also have a fuel-efficient vehicle that you’ll really appreciate when gas ticks back over $4 per gallon. Rest assured it will be at least that high in a year or so! If you’re considering a Hyundai, Toyota, or Honda, you owe it to yourself to test-drive one of my Nissans. You’ll be shocked at the technological advantages Nissans have. Plus, our styling and performance is heads and shoulders above the other three. I was shocked, and I’ve been in the business over 25 years!

If you want to be truly practical, buy one of our late model pre-owned vehicles. They’re put through a 120- item complete service, come with a clean CARFAX history report, and are also backed by our exclusive nationwide lifetime warranty. Our pre-owned vehicles sell at just a fraction of their original retail price.

Next, you should reduce personal debt, and deploy a portion of your dollars to “real assets” — physical gold, silver, platinum, or GIA Certified Diamonds. You might also want to invest in foreign currencies such as the Chinese yuan or the Australian dollar. Of course, I am a car dealer not an investment advisor, so consult a professional advisor before making any and all investments. I’m just providing my personal opinion.

Yes, I foresee a rocky road, but we’ll pull through it like we always do. We’re smart, strong, and resilient. We adapt, create, and innovate our way to brighter days. I have all the confidence we will do it again. I just think prompt preparation for the immediate future is the prudent thing to do.
John

P.S. Now is the time to purchase a new or pre-owned vehicle. Interest rates are still at historic lows, but that won’t last very much longer!

Get Pre-Approved Here http://www.johnmarazzinissan.com/financing/application.htm

I’m a free market guy. What I’m watching happen is quite disturbing and potentially disastrous. The Federal Reserve Chairman just testified to Congressional committee Wednesday, as lawmakers demanded documents related to Bank of America’s acquisition of Merrill Lynch. In my view, this is a precursor of more trouble to come for the Fed.

I have argued for some time that Fed Chairman Bernanke completely underestimates the political dimensions of the policies he pursues. The various “credit easing” programs have little to do with monetary policy, the domain of the Fed. Monetary policy ought to be concerned with money supply or the level of interest rates, thereby allowing the markets to decide where the money flows.

Instead, the Fed has been targeting specific sectors of the economy, such as helping the housing market or insurance derivative companies. The motivation is understandable, as the Fed is well aware that it may not be powerful enough to support the housing market otherwise, and sees it as crucial in its plan to prop up the economy. One thing seems clear though: this episode highlights that the Fed’s independence is being increasingly compromised as they continue to intervene in unconventional ways

However, allocating money to specific sectors of the economy is fiscal policy and, as such, should be authorized and supervised by Congress. This facet is perilous for the Fed to ignore, as it invites political backlash. Last week, Bernanke was grilled by the House Budget Committee, giving him a taste of more to come; the subpoena is a further step.

The ‘unconventional’ policies jeopardize the credibility and independence of the Fed. This takes its toll on the effectiveness of monetary policy, making any policy more expensive. Remember: the cheapest monetary policy is one where a Fed official simply utters a few words and the market reacts. Ever since the fall of 2007, monetary policy has become increasingly more expensive as the Fed’s effectiveness has been eroding. When Fed talk was no longer sufficient, the Fed had to enact an emergency rate cut in early 2008; since then, the Fed had to escalate its policies further, printing trillions of dollars.

This Congressional committee inquiry is like a camel putting his head under the tent. The more he looks, the more he doesn’t like. The entire system is starting to be scrutinized as it should be. Congress is now starting to question the authority of the Fed starting with an audit. Maybe we will finally find out if the Gold is still there??

The questions ahead make it prudent to put a portion of your portfolio in hard assets. Talk to your broker about what hard assets are suitable for you.

I’ve been around the car business my whole life. At the age of twelve I was washing cars. At fifteen, I was a porter and at seventeen, I became a salesperson. Through the years, I’ve seen plenty of changes. I saw interest rates in 1982 at 18% and recent rates at 0%. I saw gas fluctuate from two dollars a gallon to over four and back to two dollars quicker than a summer break. Now we witness Chrysler’s bankruptcy and soon to follow GM’s. The automobile industry is experiencing unprecedented changes, but I think the biggest and most important change is about to happen right before our eyes.

The gas combustion engine is about to go bye-bye! Whether you believe in global warming or peak oil theory, the electric car is coming. Electric cars produce no CO₂ emissions and can be recharged via electricity produced by nuclear, wind, or solar power. In my opinion, nuclear power will win out amongst all the green alternatives. France currently produces 80% of its electricity from nuclear, and nuclear produces zero CO₂. There are also advances in nuclear that can eliminate waste and risk problems like pebble bed reactors, but that’s another blog for another day.

I’m excited that we have the franchise – Nissan — that is going to dominate this new field. Carlos Ghosn, who runs Renault-Nissan, is pouring R&D dollars into the all-electric car. My personal opinion is he is spot on!

Here are links to a couple recent articles on Nissan’s first test vehicle:

http://www.newsoxy.com/nissan-hybrid/nissan-electric/article11876.html

http://www.marketwatch.com/story/2010-nissan-electric-car-the-future-is-quiet

Also, here is an article from a financial newsletter I read every day called Dow Theory Letters. Click here for Russell Article

The article discusses a couple possible investment opportunities regarding electric. I personally own the following energy and green stocks as a small part of my stock portfolio. (This is NOT investment advice; it’s just to illustrate how much I believe in electric.)

FSLR

PBR

FPL

SU

CCJ

SQM

CHK

NLR

Thanks for visiting today’s blog. I’m looking forward to providing you with updates on the new technology.

Have a great day,

John

Car Industry in Chaos: How to Take Advantage of It

I, like most business owners, am optimistic by nature. We tend to see the glass as half full and always claim to see the light at the end of the tunnel. Over the past weeks and months, many have asked me what I think of the economy, particularly the car business. My reply is always to the point and brutally honest.

Car dealerships are folding in record numbers. The industry has dropped from selling 16 million units a year to about 10 million currently. The bad news is I don’t see it getting better anytime soon. In fact, I think 2009 will be as tough or tougher.

The bad news for the average dealer is he is stuck with old, undesirable used vehicle inventory that has dropped in price quicker than he is able to sell it. Deflation has eaten away at his bottom line. As values drop, the ability to get the banks to loan money on those assets also dissipates. The banks now want to protect themselves from future defaults.

I’m not saying I’m smarter than my competition. What I am saying is my timing was perfect. I bought into John Marazzi Nissan in October ’08, just as the credit markets were imploding. In fact, during my first week we had the derivatives market, the car industry, the stock markets, and the credit markets crashing at the same time. Needless to say, the first 30 days were rather interesting.

When I arrived at the Nissan dealership there was very little used vehicle inventory in stock. Just a few old age vehicles, but very little in depreciating assets. Previously, the store only sold 20-30 used vehicles per month. When I bought the store, I knew the future of our industry was going to be late model, pre-owned vehicles. I believe it’s going to become in vogue to SAVE money again. A pre-owned vehicle a couple years old can literally save you 50 percent off the original new car price.

My goal from day one was to be the #1 pre-owned dealer in all of Southwest Florida. For those who don’t know my history, for the past 17 years my team and I built and managed the #1 pre-owned operation in the country. Well, now that I OWN my own store, I’m going to work my tail off to repeat our past success in Naples. I’m excited because I’m now in a position where I can go out and buy late model pre-owned vehicles during the biggest “buyers market” of all time.

In my first two weeks, I reached a deal to buy and process ALL of the pre-owned vehicles from some of Florida’s largest lease companies and banks. I get to buy at 60 to 80 cents on the dollar. We wholesale the edgy vehicles and only keep the very best. At any one time, we have 400 late model used vehicles running through our books.

The vehicles we keep must have a clean CARFAX report, and they go through an extensive 120-point service inspection. Then we back it up with our exclusive Nationwide Lifetime Warranty. You get all this and a “wholesale” price. We earn a couple bucks profit, and you save thousands!

In just our first 60 days, we became the documented #2 volume used car dealer in Southwest Florida. What makes that amazing is the fact that the store previously didn’t even rank in the Top 25. Going forward, I think we will become #1 and remain there. I’m confident because, in my 25 years in the car business, I’ve never seen the kind of buys we are making. Absolutely gorgeous, one, two, and three year old domestics, but mostly Hondas, Toyotas, Infinitis, and Nissans — all at mind-blowing values.

Plus, I have the same banks that I’ve done business with for the past 17 years stepping up with very competitive finance terms with little or no money down. In my opinion, you will never see a better pre-owned buying opportunity than we have RIGHT NOW!

Please remember as you search our website, vehicles are coming and going so quickly that most don’t even appear on our website yet. So, please call my Internet Wholesale team at 1-888-Wholesale (1-888-946-5372) or simply stop by. We’re located at I-75 and Pine Ridge Road, Exit 107 in Naples. We’re less than a 30-minute drive from anywhere in Southwest Florida.

Thanks for reading my note. I’d be honored to have the opportunity to earn your business.

John Marazzi