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Gold/Mining/Energy : Tax Loss Selling Season - Best Buys?
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To: John Vosilla who wrote (13)11/27/2013 9:59:15 AM
From: LLCF  Read Replies (1) of 128
 
Wow, what a chart. I agree, I'm not watching and glad I'm not... as nothing has changed in years except the "problems" have gotten worse making the future that much more violent/volatile. I'm buying NG and TRQ simply because risk reward (see scenario's below) seems good... I certainly would NOT bet the ranch on anything!

OK, to dredge up old history for the long timers on SI Mr. (much missed) Heinz Blasnik warned of the debt overhang precluding hyperinflation and a bond crash way back.... at least initially. He was right (again), and I'm certainly very happy to have headed his warning. But that was then, this now....

My thoughts are that it could go either way... backdrop:

now: the crazy low rates and bond buying has created only asset inflation via cheap credit... more mal-investment as it were. Despite what the incoming fed chairman asserts the fed HAS absolutely chased money into competing assets (obviously... dunno what planet she's on) ... she's probably looking at your average person... which HAS NO assets... so sure any benefit accruing to "average joe" (essentially zero) does get spent. Some large portion of home sales in depressed markets for instance are investors "reaching" for yield.... LOL, not that I feel bad for them, they already own the entire stock market, may as well get to work on "housing stock"- LOL Anyway, I digress... the point being zero rates aren't helping enough to..... RAISE RATES in the eyes of the fed.

going forward:

1.) Fed keeps printing... hyperinflation. In this case we need to see the fed continue to do what they are doing in the face of soaring stock market and other asset classes... theoretically seems plausible since unemployment and plight of "average joe" likely to continue. If it wasn't for the incredible size of Fed balance sheet today I'd give heavy weight to this scenario... but not so fast... {see 2}

2.) Crash and major depression- deflation Fed decides it just cant keep doing the same thing over and over given lack of efficacy (i.e. they wake UP!). Seems plausible given the new awakening by everyone down to average joe as to what they are up to. The "theoretical construct" that they continue to provide liquidity sounds nice in text books, but the reality of the federal reserve owning all the mortgages and government debt and ponding buying stocks or other assets may not be palatable to many people, even average joe.

So for the finance "wonks" in interesting part may not even be choosing 1 or 2... the fact that THERE IS NO 3 or 4 is very valuable information. If anyone has a 3 or 4 I'm certainly open.... as I am to probability % of each possibility :-))

Thoughts???

DAK
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