Please Don't Shoot the Messengers
This article is an homage of sorts to the brave voices that resonate above the cacophony of mainstream financial analysis to offer their honest perspectives without the expediency of unfounded optimism nor the insult of sugar-coating.
I know full well what it's like to be attacked for your ideas, rather than debated on the merits of one's argument. This is a reminder to Fools that we all win when we remember to debate perspectives on the merits rather than shooting the messenger.
For the past several weeks, I have grown increasingly incredulous of this rally in the face of deteriorating fundamentals from the range of bellwether industries that I cover. Trust me, such negative assessments are no more fun to write than they are to read, but I felt duty-bound to report my findings and perspectives without adjusting for the understandable desparation among investors to believe that perhaps things were looking better.
We have reached a watershed moment in the equity markets, and I sincerely believe there has been no more crucial moment since before theonset of this crisis for Fools to consider the perspective of these three financial sages. The subject matter is not uplifting, and frankly we've all had enough doom and gloom over the past couple of years to last us a lifetime, but that does not change the facts.
The dollar is severely impaired, and the break in the USDX below 82 and then 81 without so much as a blip of support is disconcerting even to this Fool. Fools with no allocation in equities designed to provide some level of defense against a long-term deterioration in the purchasing power of the dollar are quickly running out of time in which to do so, in my opinion. I recommend gold as the best possible dollar hedge, although silver may outperform even gold. I do not recommend leveraged ETNs or any such vehicles at this stage of the crisis, since often those are based themselves on the very derivatives that lie at the core of the problem. Any "core" commodity ... the things people can't really live without, will provide some measure of defense, which is why Jim Rogers is such an advocate for agricultural exposure here. Some of the others, like natural gas, coal, and copper... could experience some real volatility in the short-term as this rally unwinds and we get perhaps even another forced liquidation event where hedge funds sell out of recently established long commodity positions. Of course, gold and silver could move around a lot in the short-term as well, but the past couple of days provided a significant technical break-out that could just as easily continue unfettered to the $1,050 mark or so.
I promise to always write what I see based upon the evidence that I spend 18 hours per day uncovering. I apologize in advance for the less-than-positive nature of much of the material I'm presenting, but if my perspective and that of the individuals highlighted in this article can help Fools to prepare accordingly, then perhaps we can erase some of that negativity. This continues to be a labor of love for me, because I know I'm skilled at processing large volumes of information and discerning patterns that reveal elements of the macroeconomic trends underway. I hope some Fools will heed my caution and gain some precious metals exposure, and I hope that Fools will continue to prioritize being well-informed over being reassured. Thank you, as always, for reading and sharing your perspectives, and for goodness' sake please be careful out there!!