Wednesday, November 17, 2010
And one chart that says... "Prepare for the worst"
If conditions are similar to early 2008 as the chart implies, there is going to be asset destruction far and wide, as the depression takes the next leg up. Inflationary depression? Deflationary one? How about both? Will we have a strong mandate from the frightened masses to ignore the T Party and austerity people and INFLATE at all COSTS... again? Or is this the one where the market (and popular sentiment) finally overwhelm Ben, Paul Krugman and all the other people of influence who believe the big picture can be managed by policies designed to sweep the dirt under the macro rug forever?
I mean, the Academic clerk in charge of the Fed is really only doing what the majority expects, is he not? Gold, in getting roughed up right now while under performing other 'go-go' assets is a good thing as this market is losing the speculators and players. One day, the anchor to financial stability will hold true as world currencies battle to depreciate their way out of this mess.
The message of the above chart, if there is any predictive value to it, is to prepare for the worst, do not think you are a player in the face of historic events to come, take stock of what you have and own that is real and beloved, kill off as much debt as possible, have cash liquidity and realize that neither you nor I, nor powerful policy makers are stronger than a long term system, leveraged beyond imagination could be if it is in meltdown mode.
It looks like NFTRH is going to go deeper still into risk management mode. If GSR turns up, one implication will be that the easy money - off of Hope '09 come Ben's LCPD - has been made for a while. Another implication, considering the docile GSR taken in a vacuum, the pro-Ben charts of the last few posts and current market sentiment profiles is that a lot of people are set up to be most unprepared.