Puru Saxena submits "The Solitary Bear" in today's Daily Reckoning Australia. He agrees with Marc Faber that there's bubbles in equities and commodities, but thinks we have some years yet before the crisis hits.
This is because he can't see central bankers having the virility to raise interest rates sufficiently to curb inflation, which is rotting savers' money (the "solitary bear" market being cash). Why the reluctance? "The central banks know full well that with debt at its current level, such drastic measures would probably cause a global depression, widespread unemployment and social unrest. So, they will try and avoid or delay this outcome as much as possible..."
We're practically forced to invest in something. The danger, particularly for small guys, is not knowing when to head for the exit, ahead of the rest of the panicky crowd. It's a tough one:
"...investors will have to become more selective when making decisions and deploying their capital. For maximum success and safety, I would urge you to invest your capital during pullbacks whilst avoiding overstretched markets. Despite all the talk of "doom and gloom", this strategy should continue to deliver reasonable returns in the period ahead."
I wonder whether the "gloom and doom" is in part an oblique reference to Marc Faber, whose website is self-deprecatingly named gloomboomdoom.com. See Faber's comments in the Market Oracle round-table discussion yesterday (previous post) - he, too, admits he can't call the turn but forecasts a continuing rise in equities (except maybe emerging markets) relative to cash - but not a rise in real terms. Faber is looking, I suspect, for quiet bargains in commodities and resources, e.g. low-priced agricultural land.
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