Hi DJ, Doesn't matter one way or another. We must get back to the regularly scheduled programming:
I am thinking that ...
(a) market greed and fear is amply displayed in charts,
(b) market greed/fear and charts must be interpreted differently when market will likely continue trend (like 1998-1999, 2001-2002, and within the years 2000, 2003) vs when we can easily have break with trend (IMO, like now and over the next few months, until election result determination)
I think we can easily break with trend now because (i) we are trendless now, and (ii) reported reality is not in conformance with actual experience (inflation is high, good paying jobs are rarer, … as opposed to the happy-talk in media and by officialdom).
When folks finally give up hope the media and officialdom is correct, as in the folks in charge may not in fact know what they are doing or supposed to do, then the market will go in new directions (amongst various asset classes).
At this junction, I am betting with cash, gold, energy, preying for real estate, but basically pretty diversified, for now.
If we were to lock the door and turn off the news flow, I would guess that:
(a) Inflation of commodities (limited in supply against unlimited money) will trend up after correction/consolidation; energy, the political and economic commodity, will trend up, driven by difficult politics and harder economics;
(b) Deflation of housing, shares and bonds will happen, eventually, but perhaps after an even more ferocious rise driven by cheap money;
(c) Gold will continue to be flipping between its various states (commodity, money, monetary policy thermometer, shelter);
(d) Silver will flip between its states (industrial metal, cheap gold, hedge fund entertainment);
(e) Jobs will continue to be scarce, real purchase value of salaries will trend down;
(f) Savings rate will have to head up, even in the midst of declining job counts and dropping job pay (otherwise it is really ALL over);
(g) The currencies will continue to hug and grind against each other, and against hard and liquid commodities;
(h) Until the cost of money goes high and threatens to go way-high, and then kaboom, madness, chaos, confusion, panic, intervention, … ;
(i) Followed by repegging of values between all asset classes.
The difficulty and challenge is to (a) navigate between the asset classes with gain into the repegging time (hard, to near impossible, to do), and (b) to come out OK at repegging time (ouch, really hard to do). And so we take it one moment at a time.
All we know for sure is that the majority will get hurt, and so, intuitively, we better stay the heck away from the majority.
Gold? No majority knows anything about gold. This is not the issue.
The issue is will the majority come to know anything about gold?
The answer to that USD 6,000 question depends on just how bad events get.
I happen to think events will get very bad, and the longer the bad does not happen, the potential badness increases still more.
In the mean nasty time, we must batten down the hatches and suffer through DUEED (Dollar Up Everything Else Down), until the truth becomes obvious amongst the facts.
Chugs, Jay |
