Hello DAK, Shock and awe, restart of history, violet alert, and I am backed up to the thin red line that demarcates on the crimson financial-scape the 2002 NAV gained and the 2003 wealth may be lost.
NAV gain for the year is now at a micron thin 0.08%, having retreated from YTD high of 4.3%.
What to do, where to run to, how to hide, or should I perhaps simply surrender my positions, and join Maurice in wildly bopping head and uncontrollably gyrating torso round and round, chanting Q hymn, inching forth to the edge of toxic cesspool of money abyss?
This is my way of hanging on, to survive the crimson tsunami, so as to be able to fight another day:
Cash @ 24.29% of gross asset
AUD @ 6.86%
CAD @ 7.67%
CHF @ 3.17%
EUR @ 3.99%
HKD @ 6.99%
USD @ (6.63%)
YEN @ 1.22%
ZAR @ 1.01%
RMB @ 0.01%
Metals @ 19.18% (physical & pooled)
Bonds @ 20.57% (all short term)
Equity @ 13.63% (mostly resources)
Real Estate @ 22.33%
I am choosing to ignore the shock and awe, think this one out, to the natural and obvious conclusion, do the NToeAwsBe, as events should go pass TPonRr, on their way to TeoTwawKi.
Let us start with the basics. The global P/L statement is shriveling due to either declining revenues and/or rising costs; the planet-wide Balance Sheet is out of equilibrium due to heavy debt, un-funded pension liabilities and derivative augmented assets; the valuation of just about everything is high relative to income; just about all currencies are over-valued except for the one I adore, cherish, and hoard; all officialdom must raise taxes, and simultaneously flood the system with false money; the factories are closing down, the companies are going belly-up, the unemployment is rising, and the responsible leadership is not around.
The world can in theory go the way of Japan or the path of Argentina.
Being more down to earth practical, I am afraid the way of Japan is not an option, because the world’s savings are being squandered in Japan, and is being pilfered from Japan until Japan’s wealth is all gone.
I am also reckoning:
(a) A short and relatively destruction-free Iraqi campaign is maxi-bad news, because one cannot reconstruct what was not destroyed;
(b) Turkish incursion into N.Iraq is also bad news, because as their financial burden grows, the grudge-keeping crowd in Washington will veto the next IMF loan, and thus, destruction and collapse of Ankara to follow, making space for more incubating room of radicalism;
(c) The political differences within Europe bodes nastiness for EURO;
(d) The burdensome empire-building by US bodes nothing good for USD;
(e) The Japan imported oil dependency spells trouble for Yen;
(f) Oh, yes, count on new arms race, novel alliances, and other pre-emptive measures that need plenty of financing and producing little.
… but I have no time to worry about any of the above, because I just received word that the under-funded GM pension obligation is USD 76.8 billion, or twenty (20) times its average annual net income for the past seven very good years. I hope the post-war rally will get that big outfit to a high enough level to make it criminal not to short it.
Let me stop and think some more. GM will try to borrow from the market to fill the pension and profitability hole; regional governments will try to borrow from central governments to support social and governmental programs, including pension obligation fulfillment, and the central governments will do … what? Print, tax and spend, of course, naturally, as in always.
Ok, I will stop now. It is Saturday afternoon, and I am going to unhook fixed line phone, disable cellular phone, and steam myself to a comfy temperature and relaxed state before taking my customary nap, dreaming of riches to be.
Chugs, Jay |
