Global Uncertainty: The Next Bull Market

We live in a time of great global uncertainty and I’m 100% sure it’s downhill from here. I admit sometimes I just want to pick up everything and leave America because so many people, especially of my generation, just don’t get it, so nothing will change until it’s too late. We are giving away our freedoms without a fight and expect no repercussions. In the internet age we have unprecedented access to the wisdom of previous generations, but we choose to ignore it. Some may call this ignorance or apathy- I call it stupidity.

Without a doubt the crisis of 2008 was the opening act in this ongoing drama. We are getting bits and pieces of evidence that suggests the worst is yet to come, but very few are preparing accordingly. For now the buffoons who say the end has arrived for gold have taken center stage.

Learning From Experience

The best people to learn from are those who experienced a major crisis themselves. Unfortunately, there are not that many people alive from the Depression era . Our policy and overall national mood is being shaped by Boomers who have only known prosperity.Yes Boomers have accumulated wisdom over the years, but not the right type of wisdom for what lies ahead. In a sense Boomers are too optimistic. They could view the world linearly and get away with it because indeed the U.S. in their lifetime became wealthier in a steady fashion. We did conquer our enemies and “defeat” communism. So trust me, I understand why Boomers think this way, but without a doubt this general line of thinking is dead wrong.

History is a great teacher for those with an open mind. I think you’d be very hard-pressed to find someone who has thoroughly studied history and not come away with the sense that we are headed for disaster. Perhaps the only exception is Helicopter Ben Bernanke, but he is a special kind of naive. We are approaching a cycle of war and general strife that occurs in a big way every 100 years or so. We can choose to learn from the past and respect the power of cycles, or we can choose to think everything will be OK because our idiot leaders say so.

The ancients understood cycles much better than we do, and they tended to break cycles down to periods of 100 years (human lifespan), and 20 years (generations). Instead of thinking linearly, they understood that different generations had opposing views, and that this clash in ideology laid the foundations for shifts to the opposite extreme. Before major reform always comes a crisis. So this crisis is ironically the best thing that can happen to us in the long run.

The markets work more or less the same way: before a collapse there tends to be a spike rally, and vice versa. 10-year Treasuries are hitting new highs and this just implies the collapse in bonds is going to be insane. Today we saw gold and Treasuries rise in tandem, which has become a rare occurrence. Treasuries are in a no-man’s land where it’s not prudent to be long or short. The crisis in Europe needs to mature a bit before people take a good, hard look at the U.S. I’d  prefer to take my chances with gold because it is a safe-haven that is NOT hitting new highs.

Things are about to get very wild. But keep an open mind because the best trades will be ones that aren’t popular now.