Thursday, June 20, 2013


The more constraints one imposes, the more one frees one's self. And the arbitrariness of the constraint serves only to obtain precision of execution.

Igor Stravinsky

If one thinks about the above statement in the context of interest rates for the last 30 years one would have to conclude that our economy has been without restraint for quite some time. And the conclusion would have to be that we, our country, has grown flabby as a result, the last four years not withstanding.

I've been re-reading John Mauldin's "Endgame, The End of the Debt Supercycle". I highly recommend it. He wrote it a couple years ago. The main take away for me on the first read was the peril of Japanese debt and what could/would happen to the world if interest rates rose.

Perhaps we are in the endgame. I have noticed over the years that there are times when nothing makes sense in the markets. By that I mean that usually when bonds go down the stock market goes up. Or, when the dollar goes down, gold goes up. Or when oil goes up, gold and silver go up.

Not lately. There seems to be no correlations. This I have come to understand is when all assets are being sold. Often due to margin call or other forced selling. This means there is no where to hide and that money is being destroyed. At least paper is being destroyed.

The dollar is strong the last couple days as bonds and stocks and gold and silver, not to mention all of the same for all markets around the world.

It is time to take cover. Don't worry about "buying the dips". When you are buying dips you are hoping to get in on a rally that you missed. I am going to just wait for awhile. Quite awhile. When everything is moving up for some time again that is the time to step back in the markets.

I am long only volatility. And U.S. Dollars. Well, there are those PM's....

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