Fed Looks to Exit from the Inferno…

San Francisco Fed head John Williams stepped up to the microphone Thursday to deliver a well-timed message stating that the Fed was ready to phase out its bond purchasing program in a few months (which we doubt will last long, if it happens at all). We say well-timed because his statement appeared on a day when stocks were a bit weak in the knees, having taken it on the chin from some fairly dismal and unanticipated economic data. Housing starts fell 16.5% from March, jobless claims rose 9.75% from the previous week, and the Philadelphia Fed Business Outlook fell into negative territory (-5.2 for May). Yet following the news, stocks managed to scrape by with only minor losses – which they erased by the following morning. This leads us to believe that Mr. Williams’ comment wasn’t necessarily intended to scare stock bulls, but rather to support the dollar, thereby validating the rally in stocks and simultaneously suspending the forces of inflation. If so, he succeeded. To finish the week, stocks held to modest gains; the dollar spiked to an interim high, sending gold to within striking distance of previously set lows; while Treasuries were flat (see scores).
On balance, the bulls seem to have the upper hand in the battle over the dollar. Our view, though contrary to consensus, is that the dollar’s strength has less to do with the US economy, as the bulls contend, and more to do with the extreme biases of foreign central banks – presently those of the Bank of Japan. Considering that bank’s unprecedented commitment to $1.4 trillion in monetary injections over the next two years, combined with a well-established, overly confident, and levered yen carry-trade investor base, the resultant debasement of the yen has made most currencies shine bright – if only by comparison. In short, the BoJ is better at debasing its currency than the Fed, and until Japan’s now rapidly accelerating inflation rate derails the bank’s plans entirely, yen subservience and dollar supremacy may continue for the time being. Of course, that derailment might not take long. With Japan’s utility and oil prices rising as much as 20% every six months, citizens and businesses alike will soon be devoted to protest.

In any case, this is an aggravating time for precious metals investors. Prices for the metals continue to sag in the face of unprecedented monetary injections by the Fed and a debt-driven economy that can’t gain any noticeable momentum – an environment that should be unqualifiedly bullish for the PMs. We submit that, in the near future, this relative game between the euro, the yen, the dollar, and any other currency will evolve to a point where each is graded on an absolute basis against a basket of goods – as was the case just a few years ago. To get back to that point, the money printers will need to be discredited. For that to happen, both the US and Japanese economies will need to slip even further, and at a quicker pace than they already have.

Best regards,

David Burgess
VP Investment Management
MWM LLLP

Hype Triumphs Again for Today

Japan’s Nikkei 225 average kicked into overdrive last night, rallying over 3% to close at a new high for the year. There was nothing we could see that caused this spike except that much was made about the yen dropping through a “psychological barrier” of 101 against the dollar. Neither Mr. Abe nor Mr. Kuroda, though outspoken on a range of subjects this week, mentioned anything about extending or increasing the Bank of Japan’s commitment to “QE.” We would therefore conclude that volatility in Japanese currency and stock markets was entirely speculative in nature (a sizeable short squeeze was perhaps in effect). When our markets opened this morning, the dollar was up a little over 0.5%. This had the metals under some pressure in the early going. Nevertheless, they managed to rally at days end – gold finishing with only a minor loss, and silver with a small gain.

Stocks remained firm all week, while Treasuries gave up some of their recently acquired gains – they lost about 16 basis points on the 10-year Treasury by week’s end. Most of this market action, at home and abroad, could be classified as noise, in our opinion. Nothing fundamental drove prices this week, though Bill Gross was on record today calling an end to the 30-year bull market in bonds.

As we mentioned last week, the dollar continues to be our focus. Despite having rallied back into technically “safe” territory this week, we remain dubious about its future prospects. The dollar obviously saw some strength following a series of rate cuts by central banks, including the ECB, India, South Korea, Poland, Vietnam, Australia, and New Zealand (which actually monetized). Thailand, Taiwan, The Philippines, and Switzerland are just a few of the other banks standing ready to do the same, “if need be,” in the coming weeks. Yet rate cuts in general are not the same thing as monetizing over $1 trillion, as both the Fed and the Bank of Japan will do this year. Rate cuts can and do create financial distortions, but money printing is like a double shot of espresso in terms of its inflationary impact. Therefore, we would expect to see the dollar and the yen come under continued, and perhaps this time uninterrupted, pressure in coming weeks.

What can be said about the metals, given what currently seems to be a persistent undertow? We submit that support at present levels exists, despite the swath short sellers recently cut through the market; the pervasive, though mistaken, notion that the economy is on the mend; etc. The metals are simply not going down well. Physical demand remains strong both here and abroad. China’s gold consumption increased 26% year-over-year in the first quarter (223.5 metric tons imported from Hong Kong in March alone). And the US mint recently sold the most coins in its history, delivering a record $311 million (6.5 metric tons) worth of gold and silver in the month of April. That said, what remains unseen is a pop in metals prices in the futures markets, where the influence on prices is significant in the short run. We’ve seen this happen for oil and other commodities. It would therefore not be terribly surprising to see it happen for the metals sometime soon.

Best regards,

David Burgess
VP Investment Management
MWM LLLP

Eyes on the Dollar…

Given the multitude of information that hit the markets this week, and the limited amount of space on this page, we think a bit of summarizing may be in order.

Stocks were firm, with many indexes pushing into all-time-high territory. At the same time, the economic data, though celebrated for “beating expectations,” clearly failed (again) to support the notion of an impending economic recovery. This could also be said of corporate first-quarter earnings. Although they showed some improvement from the previous quarter, they lacked any meaningful revenue growth to match it. All of this is to say that stock bulls are happy – in an irrational sense. With an economy having yet to fire on all cylinders (here or abroad), there is little chance that central bank stimulus will be withdrawn any time soon. Remarks made by the ECB and the Fed this week strengthen this assessment.

Treasuries came under a bit of pressure following the US jobs report on Friday. New non-farm jobs registered 176,000 for April, while revisions to March were noticeably positive – increasing by 59,000 to 154,000. The April unemployment rate fell from 7.6% to 7.5%. Beyond the headlines, everything seemed to be in order, as the overall labor participation rate remained steady. Somewhere in the mix, though, 206,000 fictitious Birth/Death jobs were credited to non-farm payrolls, while U6 – a more accurate measure of the total unemployed (including discouraged workers) – actually rose in the month of April (from 13.8% to 13.9%). Add to this the disappointing (on all counts) ADP jobs report released earlier in the week (119,000 vs. expectations of 150,000 for April), and there wasn’t much evidence supporting the consensus that a positive trend in job creation is forming.

As we said last week, much will depend on the trajectory of the U.S. dollar. Over the last few months, it has defied gravity – in relative terms only – while the Fed has actively and aggressively debased to the tune of nearly half a trillion dollars. If the US dollar can remain strong over the next few weeks, then the current blow-off pattern in stocks may continue for a while longer. On the other hand, if the dollar’s recent inability to rally above its 50-day moving average is an indication that future inflation expectations are on the rise, then some “religion” may return to the bullish paradigm, subsequently calming the equity markets.

The precious metals may already be discounting this scenario, since they have not been obediently declining on days when the spin surrounding the economy and stocks is at full throttle. With that in mind, we maintain that the $1,550 level for gold is within reach, perhaps as soon as next week, while stocks may proceed further, but with rapidly increasing vulnerability and instability.

Best regards,
David Burgess
VP Investment Management
MWM LLLP

Taking Cues from the BoJ …

In overnight trade on Thursday, the BoJ raised its inflation target for the next year to 1.4% from 0.9%, and determined not to increase its bond purchase program. The softening policy response comes at a time when Japan’s economy still has yet to get off the ground, despite record amounts of stimulus over the last six months. In that time, the Yen has fallen nearly 19% against the euro, 17% against the US dollar, and equally as much against the currencies of resource-producing nations. The effect this is having on Japan’s economy as it pertains to the balance in prices is not the one desired (or least the one expected by Keynesian theorists). On various merchandise, Japanese import prices have risen 16.3%, significantly outpacing export prices, which have risen only 10.25% over the six months the BoJ has been “stimulating.” Essentially, this means Japan has to pay higher prices than it can charge for its goods. Consequently, this is putting the squeeze on Japan’s profitability as a whole (restraining needed wage increases) and explains why the BoJ is cooling its jets on monetary policy.

We make mention of this anecdote because we believe it to be a predictor of what the US will experience (as will the ECB, if it intends to adopt Drahgi’s bond purchase plan in June) sometime in the near future. At last read, the Fed has added $105 billion of mortgages and Treasuries to its coffers in the month of April. This brings the sum total of its purchases since last November to $485 billion, and the total on its balance sheet to $3.36 trillion (on course for more than a 30% increase to the balance sheet this year). Despite this massive level of money creation, however, the dollar has yet to come under any real pressure. We believe that situation is about to change. With the BoJ pulling back, the ECB in bond-buying abstention until at least June, and the FOMC reaffirming its commitment to QE in comments earlier this week, the dollar may begin to come under the kind of pressure it can’t handle – and relatively soon. Below is a chart of the dollar, currently hanging on the 50-day moving average after a failed attempt at a rally, and still clinging to a longer-term downward trend (lower tops).

If – or when – the dollar falls, as we believe it should, gold and other commodities will receive greater support. As we have seen with Japan, this development won’t bode well for economic progress in the long run. That said, it may be safe to say that stocks find themselves in the process of topping out, while the metals have more than likely bottomed out. As for gold, it rebounded nicely from erroneous support levels ($1330) established last week to what appeared to be a temporary resistance or profit-taking level of $1485 – on its way, we believe, back to $1550 in coming weeks – dollar permitting, of course.

Best regards,

David Burgess
VP Investment Management
MWM LLLP

It Was the Best of Times; It Was the Worst of Times … or Something Like That

Over a million gold futures contracts traded hands between last Friday and Monday. That’s the equivalent of 107 million ounces or 3,350 tons of gold, which comes to about 74% of the world’s expected gold production for this year (if you include Tuesday’s trade, 4,666 tons traded hands). The majority of the volume was to the downside, with gold shedding 9.11% and silver 12.50%. The two-day period marked one of the most volatile times in metals history, registering somewhere near eight standard deviations (or an 8-sigma move) from the mean. To put that in perspective, a five standard deviation move occurs every 4,776 years (thank you, Dennis Gartman).

To say the least, the selling spree that ravaged the precious metals market was very rare, and it sent a horde of leveraged speculators packing as stop losses led to margin calls in significant order. As we have come to understand from various sources, the physical buying of gold over the same period of time more than doubled, and absorbed much of what was sold in U.S. paper markets. Shanghai has depleted its stockpiles of gold bullion, as we reported last week, and is awaiting fresh supplies due next Wednesday from London and Switzerland.

We admit that we did not see this coming, especially when the fundamentals for the precious metals are getting stronger with each passing day. It will be cold comfort to those caught in the crossfire, but this sell-off caught many of the most savvy and/or largest gold investors by surprise. The old adage applies: One can be right, for the right reasons, at the wrong time. What isn’t a surprise, at least not to us, is that someone – not to name names – is becoming increasingly desperate to control these markets. Their goal, we believe, is to hide the mounting fiscal and economic concerns the country is facing.

We doubt they can keep up the charade for very much longer. Goosing stocks higher while suppressing the barometers of inflation using massive amounts of printed dollars will eventually prove disastrous for the U.S. dollar (which is introduced via QE to achieve these goals). In the race to debase, the U.S. (compared to the BoJ, the ECB, and others) was slow out of the gate (beginning last November). This helped the dollar look relatively strong for most of this year. But now that the Fed is firmly on pace to print in excess of $1.1 trillion this year, we expect that the dollar’s day in the sun and gold’s time in the cellar will draw to a close.
Away from the metals, stocks were clubbed earlier in the week following the unfortunate Boston Marathon incident. Granted, stocks were already toppy and 1^st quarter earnings have been mixed (banks somewhat strong and tech weak – a familiar refrain), so we suspect the events in Boston were simply a catalyst. Treasuries managed to eke out a small gain, while the dollar bounced nicely off its 50-day moving average (see box scores). Foreign bourses saw the same weakness, with the exception of Japan’s Nikkei-225 – which feeds on an exponential increase in yen production each week.

Next week, we should get a good idea as to where traders want to take the metals. Gold appeared ready to break out to the upside early Friday morning after receiving strong bids in overnight markets. However, it faded through the day, with traders nervous about the G20 meetings and/or holding long positions through the weekend. Since it’s becoming evident to many that gold’s recent decline was a large and rare anomaly, a return to the 1485 level (where the slide began) would be reasonably justified.

Best regards,

David Burgess
VP Investment Management
MWM LLLP

A Low Blow

I am not a firm believer in conspiracy theories, fairytales, and/or man’s ability to contain or control the forces of nature. One must admit, however, that there are times when that resolve is put violently to the test by the markets – and this is certainly turning out to be one of those times. As many of you know, the metals took it on the chin today, with gold shedding a little over 5.0% and silver 5.9%. The question on everyone’s mind is, in reaction to what, exactly?

Away from the action in metals, markets were rather quiet. If anything could be said, it’s that a more defensive posture was developing following another round of dismal economic data. Advanced Retail Sales fell to a nine-month low (-0.4% for March), as did Michigan Consumer Confidence numbers (from 78.6 to 72.3 in March). Stocks were off in the early going, but fought back to the line of scrimmage by the close. The dollar fell (again), and Treasuries rose – despite reports to the contrary in the early going by the MSM (see box scores).

Earlier in the week (Tuesday), the metals were behaving nicely. In fact, the Wall Street Journal ran an article titled “Gold Showing Some Technical Signs of Tracing Out a Bottom” – a conclusion we happened to agree with at the time – not just for technical reasons, but fundamental as well. That sentiment didn’t get the chance to fly. By the very next morning, the Journal released an above-the-fold story in which Goldman Sachs (with no stated or apparent rationale) recommended that folks “short gold,” subsequently lowering their price target for the metal to $1450 by year-end 2013.

One can certainly question the timeliness of Goldman Sachs’ recommendation. Gold is seen improving or stabilizing one day, and the order is given to squash it the next. Is Goldman net short on gold? Are they protecting or securing for themselves and/or their clients a profit on that position? It was also rumored that Cyprus offered to sell its 10 tonnes worth of gold to satisfy its banking issues – an allegation that was denied by Cypriot officials on Thursday. But it may be that someone behind a big desk (or a big short position) on Wall Street was in fact expecting Cyprus to dump its gold, and when it didn’t, decided to extract the profit from the metals anyway.

We can’t see how anyone can profit from manipulating markets to an extreme, at which point the markets usually snap back into balance once again. But for now it appears that market traders have stopped trying to fight the goliaths of the industry (i.e., Goldman), allowing the gold price to fall where it may. Perhaps $1440 for gold is what market operators had in mind all along.

On the other hand, physical demand continues to grow, away from our markets, as foreigners take advantage of our gross contradictions and corruption. An estimated 400 tonnes of gold have been delivered to Shanghai in the last five weeks alone (not including the rest of the world) – this is relative to the estimated 500 tonnes sold in the futures pits back at the ranch (U.S.A.) over the same period of time.

As we have stated here before ad nauseam, there are very few reasons left to be selling the metals. In fact, quite the opposite is the case. Unfortunately, this has not stopped certain parties from pursuing their inimical agendas. Comfort can be drawn from the fact that these concerted attacks are taking place at the low end of a correction – to my recollection a first in this bull metals market and perhaps indicative of the absolute desperation among the powers that be to make us believe the fairy tale that printing our way to prosperity actually works.

We have no roadmap to metals recovery. Technical damage has been done. We know only that the markets are bigger than the Fed, or any central bank, for that matter – which is why every “grand experiment” thus far has met with ultimate disaster.

Best regards,

David Burgess
VP Investment Management
MWM LLLP

Doubling Down on QE…

The ADP and US jobs reports, along with other economic data released this week, failed to inspire stock bulls. ADP private sector jobs (158,000) were a bit lower than the expected 192,000, while the US jobs report showed a disappointing non-farm payroll rise of only 88,000 (200,000 were expected). Incidentally, the labor participation rate fell to 63.3 from 63.5, even as the stated unemployment rate showed an improvement, falling 0.1% to 7.6%. Overseas, EU unemployment was soft yet again, increasing to 12%, while Japan’s industrial output shrank 0.1% and its vehicle sales fell 16% on a year-over-year basis. US and EU indexes fell (on higher volumes), while bonds and the dollar rose. Japanese stocks fought the global undertow, buoyed by the Bank of Japan’s promise to double its QE efforts in coming months.

Whether stocks began to sink in response to the lackluster economic data, or whether the well-connected “players” in financial markets are simply deciding to take profits after what has been a sizeable run-up is difficult to determine at this point. Slowly but surely, however, it may be dawning on stock operators that the economic viability of QE is perhaps running up against the laws of diminishing returns – in real time. This is not to say that we won’t see an occasional positive economic report, but, for the most part, we should see contracting or stagnating economic data in the US, the EU, and Japan, where QE and/or credit “fixes” have been warmly embraced.

As for precious metals, there seemed to be a group of investors and traders who were ready to sell the metals at the first sign of weakness in stocks. This caused damage that could be regarded as punitive in nature, forcing prices to longstanding support levels. Though they recouped a fair bit of those declines by Friday, the price action is reflective of the irrational psychology that persists within the metals markets. For some time now, since ’08, investors have feared a deflationary collapse in stocks that would take the metals down in sympathy. We think it’s safe to say that this fear has been factored into prices, which would mean it no longer carries significant weight. That doesn’t mean the markets can’t do what they want for a time. Markets can often remain irrational for longer than one typically expects.

It may also be worth noting that, in addition to the BoJ’s insane proposals, the Fed monetized nearly $110 billion (mostly mortgages) in March, $25 billion more than it pledged to do a few months ago. The increase was likely due to the ongoing ripple effects caused by the Cyprus banking crisis, though the consensus view is increasingly that our economy may require yet further boosting. In either case, contrary to the price action as of late, these are incredibly bullish developments for the defensive areas of the market – something we believe the smart, or big, money is soon to recognize.

Best regards,

David Burgess
VP Investment Management
MWM LLLP

Main Street vs. Wall Street Match Continues…

As the first quarter grinds to a close, stocks managed to finish on a high note, yet again, with absolutely no regard for the spate of bad news now pouring onto the scene. We have our suspicions, first and foremost, that performance “gaming” or “window dressing” is the primary motivator behind Mr. Market’s strong finish Thursday. It’s a widely used practice where managers swap out losing assets in exchange for winners at quarter end. As to the reasons why, we’ll leave that for the reader to imagine.

It makes almost no sense using economic data to prove a point these days, as everything seems to get “revised” (as in the case of 4^th quarter GDP figures) favorably in order to help justify the cause in stock-land. Even with the hedonic adjustments, however, it’s proving more difficult to keep negative statistics contained. Of note, US consumer confidence turned south by 8 points leading into March. The outlook on incomes and jobs was the main source of aggravation among those surveyed. US Durable Goods orders and New and Pending Home Sales also came in a bit softer than expected – but this too was ignored by traders who instead went on about the S&P/CaseShiller index, which showed a greater-than-expected increase in US home prices through January.

As we move forward, we suspect the news will continue to slide in a direction displeasing to those of a bullish persuasion. We have mentioned two important points here often: One, that money printing, or QE, is no longer promoting growth as the powers-that-be hoped it would. In fact we may go so far as to say that QE is undermining growth instead. Two, in cases where it’s illegal to “print” (e.g., within the EU), confiscating the assets of individuals not responsible for the financial mess now unfolding will prove to be equally damaging.

Anyway, markets have yet to discount one modicum of disparaging news heard thus far. Arguably, with the Fed providing the wind in its sails, it hasn’t had to – but that doesn’t imply that it won’t. At a minimum it may behoove stock investors to at least hedge their bets in coming months, which could favor relatively undervalued areas. By that, we mean the commodities sector (oil was up 3.7% this week), and in particular the metals in the weeks ahead.

Best regards,

David Burgess
VP Investment Management
MWM LLLP

Just Keep Printing and Hope Nothing Bad Happens…

I am sure that many of you have read about and have watched with amazement the events now unfolding within the EU, specifically to that pertaining to the Cypriot banking crisis.  So I won’t spend a great deal of time here rehashing what the papers have already disclosed.  Though it appears that the EU, with support from the IMF, has mandated bailout terms to Cyprus which in part has included the confiscation of depositor assets in the form of a tax or levy against savings – a big chunk of which belongs to the Russians.  Overwhelming protest erupted in short order (derived from internal and external parties) which was effective in coercing the Cypriot parliament to reject the proposal by a sweeping majority.  Since then, there has been some political posturing and scapegoating, with Germany on one side, Russia on the other with Cypriot banks in the middle biding their time till they reopen – someday.

Meanwhile, US markets have been busy treating the entire Cypriot affair as a complete non-event.  The Dow scratched at a new high yet again this week.  Bernanke reiterated the “all is well” proclamation in the latest FOMC meeting.  But, just because, nothing significant has really happened as of yet, doesn’t imply that nothing will.  Cypriot banks are still closed through Monday (at least), and when they reopen, banking sector “trust” will be put to the test – and not just in Cyprus.  “Wealth taxes” are being discussed globally – in Italy, Spain and New Zealand to name a few.

Unlike the few however, the US has access to a printing press, which our foreign creditors have so far allowed us free license to use when either our banks and/or our economy is found faltering.  But make no mistake; printing money in gross excess is just as much of a tax on the people as a direct levy against your savings.  The tripling of gas prices, among other things, over the last decade, combined with lowering the interest earned on savings to near zero is a primary example of how folks in the US have been pinched – slowly but surely.

That said, whether it comes to money printing or confiscation of assets, the real question is whether the collection of wealth and its uses (to bail out the irresponsible) is in fact promoting stability and economic growth as we are told? In answer to that question, we humbly say…nope.

Outside of Russia’s distaste for easing and its subsequent fight against inflation we made mention of last week, “QE” may also be losing its effectiveness in other markets of slight importance.  In the U.S., earnings (4^th quarter 2012) have now declined, although subtly, for the third consecutive quarter, despite the Fed’s billions ($89B so far in March) infused each month (through February of this year, things aren’t improving, according to Walmart, Caterpillar, Adobe, Fed Ex and Tiffany’s).   While in Japan, the results of massive printing efforts has produced an unwanted and dramatic rise in import prices (11.9%) relative to prices received on exports (-2.9%) according to recent trade reports.

It may therefore go without saying that while profits fade and stock prices soar, the probability of a dislocation in US markets is increasing exponentially.  Though the Street has shown little concern for such developments thus far, some are beginning to seek refuge, albeit slowly, either in bonds, the dollar or other such “safe-havens”.  The precious metals in particular have begun to show some promise, consolidating around recent lows but more importantly accelerating higher when fiscal and economic conditions (globally) are revealed as to just how “uncontained” they really are and continue to be.

Thank you,

David Burgess
VP Investment Management
MWM LLC

A Few “Defectors” in the Crowd…

For those paying attention, emerging market indices fell again this week, retracing their lows of the year. Meanwhile, U.S. markets, swelled with Fed-provided bravado, charged on to new highs. But in the race to debase, weaker runners often fall out first, and this may be happening with some countries trying to deal with excessive American and Japanese money printing. Bloomberg ran an article Friday morning titled “Russia Central Bank’s GDP View Dims as Rates Kept on Hold,” which stated that Russia Central Bank Chairman Sergey Ignatiev has declared war on inflation. The article goes on to say that inflation in the country has risen at the fastest pace in 18 months, creating resistance to all government attempts to revive the economy and causing the central bank to change its wording on policy. It now says that the risks posed by a tighter monetary policy would be “insignificant.” In any case, the takeaway from the market behavior and the article is that the benefits to QE may be rapidly diminishing in world markets – i.e., those of China and the U.K. – where we are finding it causing more harm than good.

Judging by the boldness on display at home in U.S. markets, QE still dominates investor thinking – impervious, it seems, to concerns regarding inflation or any other consequences. Though a few chinks in that armor appeared this week, it seems to us that they have gone largely unnoticed or ignored – for now. U.S. CPI figures for February rose 0.7%, the fastest pace in four years. We wonder if the BLS really meant to let that figure slip out. But the report showed gas prices rising 9.1% month-over-month, which also contributed to most of the 1.1% rise in retail sales reported earlier in the week. Combine these inflationary pressures with the higher interest rates seen recently in mortgages, and you’ve got a one-two punch for consumers to deal with in coming quarters.

That said, it will be difficult for stocks to maintain the lofty valuations achieved recently – and perhaps equally difficult for the metals to ignore inflationary pressures now stampeding onto the scene. On a personal note, I would urge everyone to take notice of the trends that are emerging away from our shores, away from our headlines (as noted above), and prepare accordingly. The size and scope of the QE in progress is mind-boggling, and with it will come massive adjustments to our standard of living, our markets, and eventually our currency. Riding and/or joining the consensus wave in U.S. stocks – enticing as that may be – while simultaneously ignoring the insurance policies (inflation hedges) available to you, could prove costly, to say the least. This is now the third time U.S. markets have found themselves in this “manic” position since the dot-com bubble of 2000. We would be hard pressed to conceive of a way a fourth could occur. Food for thought.

Best regards,

David Burgess
VP Investment Management
MWM LLLP