Financial Sense Blog

America is divided along ideological lines, and the division may be strategically significant. The Vietnam War provides an object lesson. There are people who violently oppose America’s military campaigns and thereby give aid and comfort to America’s enemy.

As Easter approaches I offer you appropriately a message of horror and of hope. Horror if you were a late cycle entrant to gold, silver, oil, or currency markets as they almost simultaneously found their Daniel numbers and savaged the unwary. Hope if you are a thinker about markets and strive to understand why markets do what they do.

There are a lot of shenanigans going on in the markets today. I would suggest that if you aren’t part of those performing the shenanigans, you want to err on the side of less risk, and less trading. You want to err on the side of less concern.

“May you live in interesting times” goes the oft-quoted Chinese proverb. This year certainly qualifies, although for most the word “uncertain” is more appropriate. While the public reels from recession, and soaring food, energy and health care costs (among others), the road ahead appears shrouded in fog.

There recently appeared an essay by Anthony Daniels, published in The New Criterion, in which he summarized Spanish philosopher Jose Ortega y Gasset’s notion of “mass man” as the man “who goes from distraction to distraction, who is prey to absurd fashions, who never thinks deeply….”

In my February newsletter, I discussed the deteriorating state of infrastructure in the U.S. The American Society of Civil Engineers awarded a grade of 'D' to the country's roads, dams, sewers and other structures, and estimated it would take $1.6 trillion in spending over five years to raise the grade to 'B.' I argued that remediating America's infrastructure was necessary to continue as a prosperous, First World nation.

It was probably six to nine months ago when I penned a discussion entitled "The Asset Inflation Nation." The bottom line of that commentary was that US households had learned to "save" over the last quarter century via household asset inflation, especially the boomer generation that came of age in the late 1970's/early 1980's.