August 20, 2011

Time To Fire Up My Blog

It is time to fire up my blog gain. I am getting the distinct and foreboding feeling that we are entering a very precarious time for the Stock Market and I'd like to use my blog to help as many people as possible. The last time that I felt like this was in October/November 2007. This time period has many of the same characteristics as that time period:
- Many of the major banks in the world have rotten Balance Sheets. One could probably argue that the Balance Sheets were never fixed in the first place.
- Lack of political leadership.
- Downward spiraling consumer confidence.
- A lack of faith in the financial markets.
- The onset of a recession. Again, one could probably argue that we never exited the last recession. Were it not for the massive liquidity inflows from QE and QE2 this would be readily apparent.

But I'm not going to dwell on the reasons for the problems that we're in right now. I'd rather just advise people right now to start taking defensive actions to protect themselves from what promises to be a nasty time in the financial markets.

Barring some currently unforeseen miraculous event, I think it is advisable for people to significantly lighten up their exposures to the Stock Market. We are setting up for what could be a really big drop. I'm not talking about just the U.S. Stock Market, either. I have been and am exiting almost all positive equity exposures. Safe places to put your money would include in cash, U.S. Treasury bonds, money market mutual funds as long as you stay below the FDIC insured limits, and I think that one could also allocate 5 - 10% of their portfolio to precious metals - for the time being. If you need specific instruments to invest in, drop me a line and I can provide some.

I, of course, cannot be certain that I am right. Also, my "call" may also be early, but if the Market tanks like I think it might, I'd rather be early than late. The Market may very well finish off a potential "up" move of several hundred points to complete a "W Pattern", but this will not change the underlying economic problems that we are facing. And I don't feel that staying in the Market is worth the risk right now.

I will post more on the causes and other topics later, but I wanted to get this out tonight. Feel free to make any comments or ask questions in this blog. Chances are that if you have questions that other people have the same questions.

No comments: