As part of my job as a money manager, clients will often call or send me some doom and gloom report predicting the next financial meltdown. If I had a dollar for every time these author's predictions proved accurate, I might have just enough to buy a cup of coffee. Why then, do investors take them seriously?

The short answer is simple; the desire to know the future is a deep human psychic need. We Americans, as a country, are fairly gullible and a large number of us still believe divining the future is possible. In the case of finance, predicting the future can also mean the opportunity to gain (or lose) huge amounts of material wealth. Authors of these reports also know that fear and greed, along with the herd instinct, are the three main emotional motivators among stock market investors.  If you couple those traits with just the right amount of sensationalism, you have a formula for an extremely effective sales pitch.

After all, the objective of these end-of-the-world reports is not to inform or educate, but to get the recipient to dip into their pocket and subscribe to an investment service, a newsletter or purchase of someone’s next book. The formula works so well that an entire industry has grown up around the concept. Today there are thousands of newsletters promising to unlock the future for you and me. It rarely works.

The news media often refers to this person or that person who "called the financial crash" or some other past market decline, but the evidence indicates otherwise. More often than not, that mythologized money manager or strategist may have voiced worry or concern over a specific issue — the housing market, easy lending, leveraged balance sheets — but not that the bond and stock markets would collapse as they did in 2008-2009.

In my own columns, for example, I voiced concerns back in 2007 and early 2008 that the stock markets were heading for trouble, but I never conceived of the extent of the problems or the magnitude of the declines. At most, I could and did correctly predict the short-term direction of the markets. Like everyone else, it was all I could do to keep up with the changing economic and political chaos as it unfolded.

No doubt someone got it right, but how useful is that? The laws of probability tell us that in a world where there are thousands of forecasts per day on everything from the weather to the number of new births in Bangladesh someone is bound to get a direct hit at some point. The question is whether that same person can do it consistently. The evidence says no. A lucky forecast by an individual or group on a specific event will be normally followed by a return to mediocrity (incorrect forecasts) in almost every case.

The forecasting track records for all kinds of experts are spectacularly poor no matter what the field. Despite all the advances in science, technology and computing, experts are no better at predication than they were in the days of Delphi. That's largely because modern science is proving that the deterministic view of the world, where the future is determined by a given set of rules and patterns, is naive. Rather, the future is fundamentally unpredictable and governed by the theories of chaos and complexity.

So the next time you receive one of these missives of misery my advice is to dump or delete it. The next crisis, whenever it occurs, will not be determined by events from our past. These writers usually rely on subjects that have already been discounted but are guaranteed to push your buttons. Things like the deficit, the debt level, the government (or lack thereof), hyperinflation or deflation, political chaos, the Chinese, the Middle East, oil, gold and the value of the dollar usually take center stage in their litany of reasons for the next Armageddon.

Remember this, it is not what we know, but what we don't know that will get us every time. If the writers truly know something we don't, why in the world would they need to write us for money?

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.

Here we are just days after the latest attempt by our government to scuttle the financial markets and the averages are making new historical highs. Investors should expect more of the same as long as the Federal Reserve keeps pumping money into the financial system.

While the politicians, aided by the media machine, continue to construct one wall of worry after another, you my dear reader must stay above this daily to and fro. You must keep your eye on the ball. The ball in this case is the $85 billion per month that the Fed continues to push into the financial system.

"Taper," a word that saw the stock markets swoon and interest rates soar is no longer on the front burner; at least not this year, thanks to the latest deficit/debt debacle out of Washington. Back in September, at the Fed's FOMC meeting, Chairman Ben Bernanke had said that tapering was off the table for now due to a slowing economy (thanks to the Sequester) and possible fallout from the upcoming deficit/debt talks. The latest economic data indicates that this little charade out of D.C. will cost $25 billion and shave almost 0.08 percent off fourth-quarter GDP growth. Once again the Fed got it right.

Many on Wall Street tend to want to outguess the Fed. That is a mistake. They are the most wired-in group of financiers in the world. When they talk, it is better to just listen because they are right more often than not. Therefore, when Ben tells me no taper, I have to stay bullish on the markets. This is not rocket science, folks.

You see, the Fed controls the stock and bond markets. It has been so ever since the financial crisis. Many investors continue to make the mistake of thinking the stock market and the economy are one and the same. In times past (pre-financial crisis) that may have been so. Since then however, the Fed has followed an unrelenting monetary policy of stimulus. Although it has been only marginally effective in growing the economy and employment, it has done wonders for the stock market.

It wasn't supposed to work that way. It was supposed to be a team effort. The Fed has been hoping against hope that the U.S. government would follow their lead and use all the fiscal stimulus at their disposal to get the economy growing again. Instead, our politicians have done just the opposite. Since 2010, the government has done everything in their power to sabotage the economy. Today, with our political system in complete disarray, the Fed is the only game in town.

We now have over five years of historical experience of what happens to the stock markets when the Fed stimulates. Ask yourself, has anything changed? There is no need for second guessing here. When I told you that we would not get into a shooting war with Syria, did you listen? Over the past few weeks, when I advised you to ignore the Washington circus because it would end in an 11th hour deal, did you take heart?

Oh ye of little faith, stop focusing on these mundane issues that have little or nothing to do with the performance of your portfolio. We are going to new highs in the markets; enough said.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.

The nation has breathed a sigh of relief now that Congress has finally done what they were elected to do. The government is back in business and the debt ceiling has been raised. The damage to the country, however, will be long lasting.

Let us remember as well that the 11th hour deal between our dysfunctional officials is only a temporary solution. Congress voted to keep government open only until Jan. 15 and the debt ceiling will need to be extended once again on Feb. 7 of 2014. In the meantime, few have any faith that the bi-partisan budget talks headed by House Budget Committee Chairman Paul Ryan, R-Wis., and Senate Budget Committee Chairman Patty Murray, D-Wash., will bear fruit in the two months before the next deadline occurs.

The most recent estimates indicate that the government shutdown cost the economy $25 billion. But that's just the dollar and cents pricetag. The continued uncertainty of U.S. fiscal policy and the fear that the next time there truly will be a debt default could cost us $700 billion over the long term, according to estimates by Macroeconomic Advisers.

From California to Cape Cod, small-business owners have been hurt by the government shutdown. Over the Columbus Day holiday, for example, tourism was hurt by the closure of all the nation's federal parklands. Hundreds of thousands of mortgage applicants were held up as well since buyers could not get the information they needed from the IRS in order to close their purchases.

Retailers are in a quandary. Given the uncertainty, there is little confidence that the Christmas season will be a good one. Pessimism among small businesses, when asked about future economic activity, increased 10 percent in September and nothing about this latest debt deal inspires optimism. Yet, orders have to be filled now or it will be too late. Chances are retailers will trim their orders just to be on the safe side, reducing economic activity even further.

Consumer sentiment has been hurt badly by this circus we call Washington. In a recent trip to Provincetown, I noticed that whether at dinner, on a whale watch or just shopping around town, consumers were actively talking (and worrying) about this latest Beltway Brawl in D.C. Merchants told me shoppers were spending less and were visibly distracted.

Most recent estimates indicate that the pullback in domestic spending could impact the economy in the fourth quarter. Most economists were expecting GDP to grow in the fourth quarter by 2.2 percent, however, that forecast has been reduced to 1.6 percent. Clearly, the overall damage to the economy would have been far greater if we had defaulted on our debt.

In hindsight, the shutdown and debt ceiling debate was completely unnecessary. By now even staunch Republicans are admitting that the blame for this last bit of political insanity lies squarely with their party. Unless voters recognize this and act accordingly in the 2014 elections, we can expect that sometime soon we are all going to hit a brick wall.

The tea party element within the GOP is bound and determined to create such a crisis in this country.

Democrats should also be held accountable for their own unwillingness to compromise in years past. It is clear to me that ever since 2010, both parties have done their absolute best to hamstring this economy and keep millions of Americans out of work. Instead of coming up with bipartisan economic programs to grow the economy, our leaders have focused wrongly, in my opinion, on cutting spending, reducing debt and raising taxes all in the name of their misguided attempt to reduce the deficit.

How any of those measures would achieve economic growth or more employment is beyond me.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.

While the government shuts down and the markets swoon over the debt ceiling drama and the future of the U.S. financial system, the U.S. Federal Reserve Bank issued a new version of the $100 bill this week. Demand for the new bill is quite brisk, thank you.

To some, this may come as a surprise. After all, we all know that the world is moving inexorably toward cashless transactions. The most recent report by McKinsey & Co. found that for households with income of more than $60,000 a year, cash accounted for only 2 percent of total payments, while credit cards (both credit and debit) represented 60 percent of all retail transactions. Only 7 percent of all transactions in the U.S. are done with cash and most of those are with small amounts of money.

Between credit cards, PayPal, mobile payments and other technologically digitalized methods the death of paper currency has been predicted for years. The problem is that this particular patient never dies and is, in fact, stronger than ever. This summer the amount of U.S. currency in circulation hit an all-time high of $1.19 trillion, according to the Fed. That equates to roughly $3,800 in cash per person, if one assumes all of it is held in America, but it is not.

Admittedly, international demand for American currency started to decline about the time the Euro was introduced back in 2002. It was a period of political stability, economic growth and financial stabilization but all that changed in 2008. The global financial crisis triggered renewed demand for our banknotes and still continues today. In times of crisis, the American currency still offers foreigners the safest haven for their savings.  And many Americans evidently feel the same way.

Our $100 bill, featuring the likeness of Benjamin Franklin, is the most widely sought after note of all. We have been printing more of these "Benjamin's" than any other denominations over the past 20 years  The most recent Fed statistics show that as of Dec. 31, 2012, there were 10.3 billion $1 bills in circulation, 8.6 billion $100 bills, and 7.4 billion $20 bills, followed by $5, $10s, $50s and $2s. A little more than 75 percent of the worth of all U.S. currency worldwide is in $100 bills.

The use of smaller denominations has plateaued, reflecting the use of alternative methods of payment for day-to-day transactions. In contrast, the demand for $100 bills is growing. It appears that in times of fear both domestic and foreign holders are eager to keep a stack of $100 bills under the mattress or in safety deposit boxes as opposed to in bank or brokerage accounts. And let's not forget the black markets, criminal syndicates, drug cartels and tax evaders, all of whom use cash extensively and for them, the bigger the bill the better.

The new $100 bill is long overdue. It was supposed to reach your local bank two years ago but there was a problem with the new security measures imbedded within the bill. The new note has several features that will make it easier to authenticate, yet more difficult for counterfeiters to copy. (The paper is made right here in the Berkshires, too.)

Although less than 0.01 percent of all U.S. currency in circulation is counterfeit, it still totals as much as $95 million and most of it is in $100 bills. Most countries use special Swiss presses (sold only to governments) to print their money.  So it is difficult for common ordinary crooks to forge our currency. However, rogue countries, such as North Korea, can acquire these presses and have been known to print U.S. bills, especially the $100 bill, which law enforcement called "Super-notes."

Some countries , most notably Belgium, France, Canada, the U.K., Sweden, Australia and the Netherlands, have neared the point of effective cashlessness. That makes the banks happy since they spend billions per year processing, storing and guarding that paper. Governments also like it. The annual cost, for example, of minting U.S. currency is $219,240,000.

But I suspect that cash will continue to be useful for any number of people in a great many places. And that’s not necessarily a bad thing. Psychological studies indicate that when we use physical notes and coins, we spend more sensibly. While cash may not be "king" anymore, I think the feel of a little cash in the pocket makes one's day a little bit brighter, don' you think?

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.

In the face of a government shutdown, computer glitches and a mountain of confusion, Obamacare made its inaugural debut this week, so far, so good.

The federal government's new health insurance website went live on Tuesday and promptly crashed as did the state of Maryland's site for enrolling Americans under the Affordable Care Act. The glitches also included a computer jam on the District of Columbia's site as well as a delay in the plan for small-business owner's enrollment. Experts say to expect even more foul ups.

So why do I say this is all good? The reason the Federal site crashed was because of the overwhelming interest in the exchanges. Within three hours of its opening, the national healthcare.gov site had one million visitors. Overall, 4.7 million visitors accessed the site on the first day. That is five times the number of users that have ever visited Medicare.gov. On that first day over 190,000 people called the federal hotline on information about Obamacare. In California, Colorado, Connecticut, D.C., Florida, New York and several other states the response has been gratifying and completely unexpected as well.

For all its complexity, with most of its details still misunderstood by the majority of Americans, and the active resistance by some states and political parties, the demand to enroll has been overwhelming.

It is too early to predict whether Obamacare will really succeed, but it seems to me that the idea of electronic insurance exchanges is an idea whose time has come.

In today's world, the internet is used as much for comparison shopping as it is for other kinds of information. Whether you are looking for an airline flight, hotel room or the best price on a television, you turn to the internet for help. For the first time in our history, we can now comparisons shop for health care.

Let's face it, applying and purchasing individual health care is a complex, confusing business, whether in the private sector or through this new government program. Health-care providers, in order to capture your business on these new exchanges, are going to be forced to be specific about what they offer and why it is better than the next guy's plan and do so in language we can understand. That to me could be the real key to the success of this endeavor.

Evidently, investors and health-care providers think so as well. Health-care stock prices are up and I have detected a subtle shift toward accepting Obamacare in the financial world over the last several months. That leaves only the Republican Party left to dissent. The tea party and its multibillion dollar backers have conducted a campaign of misinformation and deceit about the plan since its inception. They have been so adamantly opposed to Obamacare that they have been willing to shut down the Federal government in protest. That will prove to be a mistake, in my opinion.

Historically, Americans have resisted attempts by government to effect social change whether we are talking about Social Security, welfare, food stamps, Medicaid or Medicare. As late as 2006, for example, the introduction of Medicare Part D, the drug prescription benefit, was highly unpopular. However, with the passage of time people not only accept the change but come to approve it and even depend on it.

 Although the Affordable Care Act is far from perfect and in need of many revisions, it is a start in a process that I believe one day all Americans, including most Republicans, will come to accept. The trick is to stick with the idea and improve it. So far, so good.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.