BlueSky&Sunshine

Preparing for the Fall

I agree with this author's general view of things. Long US equities are the last place a retail investor needs to be. I'm interested in why there's no discussion of shorting the market. I have a decent position in RRZ (2x inverse Russel 2K) - got in too early and have a small paper loss as of Thursday, but fully expect to recoup that and more. The key is to learn to make money in up AND down markets. For those to advocate gold/silver instead of cash - many IMO very credible commentators feel we're entering a deflationary spiral where precious metals won't hold up well. The inflationary case looks strong too. Stagflation looks like the most likely outcome to me. But gold in particular has been closely correlated with oil the last few months. Many people feel oil is well into bubble territory and due for a hard fall. Until oil prices stabilize or take a sharp correction, gold looks risky. Cash is returning negative real returns now - but that might just be the price we have to pay for safety for the next few months.

It's Either Inflation or Deflation - Not Much in Between

Mr. Bradley: Very well written and illuminating article. In particular: "The U.S. Government may be close enough to a funding crisis that investors should consider the future tipping point" is not exactly new information, but explained in a way that brings the issue much closer to the top of the list of concerns. Is it safe to say that the effect on the economy of a US Gov't funding crisis would be equivalent to extreme high interest rates? Would this be severely deflationary, both in the US and worldwide? If 'yes' then how can investors protect themselves (stashing cash in a safe box has its limits)? This sounds like a prescription for capital flight out of the US - well BEFORE trouble strikes!