Just received the latest "Bull! Not bull" from Michael Nystrom. This one is better than average (where average is pretty damn good) and is entitled "The Specter of Deflation". Some very good points and references are included, more than usual, and the piece is a bit meatier. All in all, an excellent read.
So now I am thinking about the role of the Federal Reserve in credit expansion, and how one can prepare for "the next leg down". This would be the time to have plenty of cash on hand. Gold and silver benefit from inflationary pressures moreso than deflationary ones, but in the long term, I think they are solid holdings. I plan to acquire some of both in the near future, along with balancing my portfolio holdings for more emerging market and international exposure (un-hedged). I think dollar denominated assets are far riskier than international assets, at least to my untrained eye. While the US will take a significant hit, I think many other markets will shake it off, or at least weather the storm better. (Think commodity based economies.) As liquidity (can I use that word?) drains out of US assets, I expect some of it to find a home overseas. Maybe even in Thailand. (Ha ha ha!)
Anyway, I'll have a last net worth update for the year in the next few days. It should come in around 84K, maybe 85K but that is seriously pushing it. I may also have a few thoughts about wealth preservation and the role of alpha in achieving it; we'll see if I can get that one to gel.
Until next time...
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