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Debt Moratorium with 1%Tax? The Arctic Mouse that Roared
We have a clue as to which is more likely to happen and in what sequence.
Our $2000 Annual Big4 Weekly Asset Allocation Report shows smart profitable insiders are currently net short Big Stocks, Bonds, Commodities, Lumber, Copper, Gold, Silver and offshore Currencies.
They are net long Cattle, Coffee, Crude and Gasoline, Fed Funds, 2, 5, 10 year notes, Pesos, Pounds, Small and Mid Caps and US Dollars.
Relentless government monopoly media headlines extolling Bonds, Commodities, ForEx, Stocks, Gold and Silver, plus the personal intensity of advertising and internet approaches on their behalf, and the tiring headlines on the incipient demise of the Dollar and Pound, with ceaseless prognostications of hyperinflationary doom, make all these bull markets somewhat suspect.
In our market experience, going back just half a century, the easy trade is a loser. People generally extrapolate their most recent experience as a trend, forgetting things change, often when they least expect it.
We think more people may be surprised by non-intuitive higher long-term interest rates, lower bond and commodity prices, a falling market of big old stocks, and a rise of the British Pound and US Dollar.
What kind of scenario might invoke these events?
Certainly not a hyperinflationary blowoff destroying the dollar and doubling gold again after it quadrupled the last 9 years.
Rather, we think the long-held deflationary depression makes more dollars and sense in the long run, and perhaps even with the impending accident so many are feeling in their belly.
Those who have studied history know hyperinflations and currency failures, of which we have seen so many, were preceeded by longstanding depressions.
In real terms, we have been in deflation since the 8 and 10 year decline of the dollar and Dow in terms of gold.
The money mirage has been such that only in the last two years, have thoughtful people begun to seriously consider the possibility of default-driven depression that may continue to raise their cost of living with bigger costs of government, while lowering their incomes and asset values with smaller private economy and less employment.
