Note: Our goal in Minyanville is to remove intimidation from the financial markets and encourage an interactive dialogue among the Minyanship. We share this next discussion with that very intent.
Good stuff today. I know the metals from a technical perspective look awful, but the idea that the dollar is such a good alternative is a joke given the structural deficits, slowing wage growth, etc. So it'll be very interesting to see which argument wins--the technicals or the fundamentals (which is that of a currency, inverse to the dollar, because gold is a store of value). But if the COT guys can knock it down, you have to play with the market not against it. Otherwise you'll lose every time.
You are addressing the exact argument that we've been discussing in the 'Ville for a while--short term technical "issues" vs. a long-term structural alternative. I will again offer that the single most important determination (for anyone) is the definition of time horizon. If you're actively trading, the big picture blues is the last rung on your ladder. If you're truly committed to the dollar squalor theory, stop staring at each tick as if it's a personal affront.
I share your two-sided dilemma as I feel that the dollar is a flawed piece of paper and, true to the path of maximum frustration, those sitting on cash will experience an unexpected loss over time. Last summer, when I was on Squawk Box, Mark Haynes asked me what he should do with his money. I told him that he could give it to me--which nobody besides myself thought was funny--but then answered with a sobering thought. "The Fed is panicked," I opined, "and part of the problem is that I don't think there IS a solution." I still feel that way and the longer Elmer pours liquidity into the drunken Minx, the harsher the hangover will be once she awakes.
That doesn't mean we can't prosper on the path that leads to the dire destination. It will, however, become increasingly difficult to score outsized returns as the 8,000 hedge funds, 20,000 mutual funds and countless independent traders all chase the same tail of return. I'm not sure if any of you have picked up on this yet but the market isn't as fun as it used to be. That's why we'll need to surround ourselves with people we trust and build a network of honest and forthright individuals.
That, my friends, is why we created Minyanville.
Daily Recap Newsletter