Submitted by Mark J. Grant, author of Out of the Box,
“Diseased nature oftentimes breaks forth in strange eruptions.”
It is an odd affair these days made odder by the political desires of those that control the switches. I speak only for myself and not anyone else when I tell you that my senses are heighted by the behavior of the governments across the planet these days. Before I was a skeptic. Now I am a non-believer.
“No hard feelings about that time in the Crucible when you mixed my salts and I was nearly blind for a day. No. No, really, drink up!”
-Patrick Rothfuss, The Name of the Wind
The worst offender is China, followed by Europe and then it would be the United States in last position. Made up numbers, fantasy figures, smoothed out data are all the bread and butter of each region. Every third headline in the last twenty-four hours is that “Europe is out of recession, France is out of recession, Germany is out of recession, France and Germany are out of recession, Germany and France are out of recession” as the public relations army of Europe is in full tilt. Watch carefully because after the German elections there will be one coercive correction after another that will be buried in the small print.
“The difficulty lies, not in the new ideas, but in escaping from the old ones, which ramify, for those brought up as most of us have been, into every corner of our minds.”
-John Maynard Keynes
It is the central banks that are running the world, it is the governments that are distorting events and we are left, like homeless children, to accept the succor that is provided. Because there is no choice I am stuck eating their food but I do not accept the fantasy on the package naming the ingredients. It is a collective attempt to Bamboozle!
It was on May 22 when the great and powerful Fed Chairman suggested tapering that I responded within five minutes, “Take money off the table.” If you did not follow my advice and you left everything alone then you have lost 9.00% of your money or 9.00% of the value of your portfolio if you were invested in long Treasuries. Nine percent.
Now where are we now? We have Hindenburg Omens flashing in clusters, very low volume in equities, yields for long bonds that have spiked as prices have been quashed, spreads that have widened, my “Drop Dead Day,” the German elections a month away, leverage in the stock market at all-time highs, corporate earnings flat to down and a barrage of data out of China and Europe that I do not trust or believe. This is not God’s country. Open your eyes; this is the Devil’s playground.
Now there was a time before the Great Flood came when Noah built his Ark. First he built the boat and then he gathered all of the animals upon it so the story goes. One may only imagine the number of people that made fun of him and laughed at his endeavors. However, in the end, as we all know now, Noah had the last laugh.
Today you can make a choice. I am building my Ark. I rest upon the bedrock of “Preservation of Capital. Laugh all that you like. We will see just who floats in the end.