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Financial news I consider important, with my opinion, which is worth as much as you paid for it.
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Tuesday, September 8, 2009

What next?

The stock market is about to have an influx of volume starting Tuesday. The expectation is the market will fall, which means, more likely to rally.

Gold is about to break into new highs, Oil seems a little weaker. US Dollar is treading on thin ice to fall.

The bloggers I read are all expecting in the next 2 to 4 months a "cataclyismic" down 50% or more of the stock market. All of them. (well, that I read :) ).

What is in dispute is picking "the top" to roll over. In 1929, the stock market crashed marking the start of the great depression. One of the biggest market rallies of all time happened the following year, and after it topped, marked a 7+ year downturn.

All the bloggers are using this as a guidepost, but there is one crucial difference, entering into the great Depression the US was fixed to gold. During the Great Depression, the USD was altered to a different price for gold, but it was still attached. Today the USA runs on a FIAT currency, there is litterly NOTHING backing the USD except "full faith and credit".

Now, I am not suggesting the USD will implode (not yet anyway), but I am suggesting past experience cannot mandate future results. With that said, just about every boom/bust in the history of mankind follows the same pattern. Boom-Bust, counter boom, final big bust.

So for now, that is where I am watching, when the final big bust begins, and position appropriately.

I am getting a little nervous again, and may change/lighten my positions. I have been strengthening my gold positions as of Friday, and will continue to do so Tuesday. I am no where near my previous levels, but gold is showing strength, and some are calling for Gold to hit $1300 in short order.

For now, cash is king, a little hedge short in restaurants (click link on right) and a little gold miners. Thats all I got. Hope you had a great weekend.

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