Tropical thoughts

~ The Real Action ~Its just a perfect day in Vero Beach, a gentle breeze and uncharacteristically low humidity. Linda and I are kicking back on the pool deck, sipping pomegranate-tinis and contemplating our tropical garden swaying in the breeze. The swimming pool is ice-blue and totally algae-free. Just wear your goggles so that the chlorine doesn’t turn your eyeballs to jelly. (Who put me in charge of that anyway… heh heh).

Oh, and we are tag-team blogging, of course. Linda is on her Sony Vaio powerhouse. While I am tranquilly typing on my itsy bitsy pipsqueak G-Meso netbook.

Linda has a wonderful entry about a local house on the beach that, for a mere pittance of US$ 6.7 mil, will bring you a wonderful, additional gigantic tax bill every year. Oh, and its probably totally uninsurable. But never mind, it is totally to die (or go bankrupt) for. Check it out…

I, on the other hand, yes this is my blog entry. And its all about the economy, dammit.

First let me say that I am deeply thankful that my talents, such as they are, are deployed to the benefit of the Energy sector. There are a lot of things being devalued significantly at the moment, but Energy isn’t really one of them. Sure oil has declined from $140 to $50. But the $140 price was just lunacy and everybody knew that (or at least knows it now). Historically, $50 oil is about where is should be, possibly a wee bit higher. I’m glad I am not in banking or discretionary consumer retail. I talked to a few bankers today while negotiating at Sears for a new refrigerator. Total bureaucrats, all of them. If you are in banking presently, I suggest getting out of it pronto. Its no place for a thinking, feeling human being. And my consumer-retail salesman looked extremely anxious and hungry (and resentful of the bankers). I guess I see his point.

So the point of all this is, I am not a believer of the axiom that the recession/depression is all behind us. We still have plenty more to work through. And the so-called stimulus is nothing more than political payouts to the supporters of the current administration. There is precious little that is stimulative about it, unless you are a member of the parasitic class in the USA.

The current apparent recovery in the stock market is a head fake… there are more legs down to this stock market. For the unabashed truth about the state of our economy and the market you should definitely sign up for John Mauldin’s Frontline Thoughts weekly newsletter. He is the author of Bullseye Investing that warned long ago that future stock market returns were going to be (ahem) a bit below normal. After listening to all the rest, he is the only one I am listening to now. I expect that this rally will become weaker and weaker over the next few weeks and during that time I will be moving my current 50% cash position to about 75%. The remaining 25% will be invested in anticipation of a weakening dollar vis-a-vis real goods (i.e.inflation). Investing in inflation while the country is grappling with deflation seems stupid. But I expect these massive sums of money currently being created by the government will actually work as designed. They will inflate at full throttle until deflation is no longer a concern. Our national debt will balloon to gigantic proportions and our currency will suffer big time for it. Social Security surpluses will be a thing of the past this year or next, about a decade sooner than forecast. This is going to get ugly, folks – especially for debtors. Pay down what you can. Save, hedge… be smart.

I like Palladium, Natural Gas and Silver… in that order. I hate teen-focused retail, the banks and the autos.

But then again, I hear a couple of egret’s playing in the canal that runs next to our house. The sun is shining, the banana tree’s are swaying, and I can’t imagine life being any better. We will endure… we will endure…
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