Uncertainty

This is the favorite word of the conservative side of the business world today.  It no doubt is what is behind the business slowdown we are seeing now.  What is ironic is that the biggest part of the uncertianty in the minds of the wealthy and large corporations is not that they are in financial trouble, they are sitting on a mountain of cash.  What they are uncertain about is whether the US tax structure goes back to a more fairly based approach.  It would seem to me that if they truly believed in this country that they would focus on creating US jobs.  Probably the Obama administration’s restructuring of the auto companies stands as the high point of the changes that we have seen since the 2007 crash.

So everyone will continue to grumble and do little positive work while the deleveraging of the 1982 to 2000 bubble is carried out (the 2000 to 2007 Fed / Bush attempt at reflating the bubble was just an aftershock). 

There are a lot of options here and many involve politics.  John Mauldin’s letter which is listed in our links section continues to put out good work.  His letter this week talks about deflation first , then inflation, I agree with the premise.

Our short-term long gold / short stocks position is waiting to play out. 

Short bond positions are a foot in the door start to what should become our dominant position looking three to four years out.  What am I saying, I don’t know where the low is going to be on long term interest rates, just like I didn’t know where the high was going to be in the early 80’s, but it was easy to know they were too high then and now to know they are too low , all one needs is a long-term perspective.