The Alta Californian

Hey everybody!  We get to learn a brand new dance!  I call it “The Depression Two-Step”.

Here’s how it works:

Step 1:  Go to cash because virtually all asset prices will fall (high quality bonds are an exception.)  You could call this a bull market for cash since everyone needs it to operate a business or fund their monthly expenses (at least rent or mortgage.)

Step 2:  Diversify into gold and possibly other currencies when deflation seems to be easing and when the possible default of our US government debt seems imminent.  If/when you think the Fed is getting ready to monetize thte debt, it is time for Step 2!

When this dance is over, we’ll have the chance to learn another one, but it’s going to be a surprise!  Will it be a 1950-1960s style golden age for equities? Or, will it be a crazy brave new world of post-American Empire madness after default or monetization?  Naturally, I hope for a golden age, but that may be wishful thinking.