Hope

Springs Eternal

Hemp is the New Oak: America’s First Hemp “Wood” Factory is Being Built

Now that it’s legal to grow hemp in the United States, a man who’s spent the last decade developing hemp “hardwood” is building a $6 million factory to manufacture  the product en masse. 

His patented product called “HempWood” is made out of compressed hemp pulp fibers, held together with a soy-based glue. 

While that may sound like some newfangled version of particle board, it’s not. 

It looks and feels like oak, but is actually 20 percent harder than the famous hardwood tree. 

It also grows 100 times as fast. While it takes an oak tree at least 6 decades to mature, it takes hemp 6 months.

DYI:  Wow!  20% stronger than oak and grows within 6 months; now that my friends is a game changer.  This will help [not solve] the outrageous cost of housing with far less costly building materials.  As this technology progresses they will manufacture board feet within the next 3 to 5 years.  Industrial hemp should have been legalized decades ago but finally the day has arrived that will spawn hundreds of new products at very low cost AND produced in the good old U.S. of A.!!!!    

SURGE IN APPROVED ACRES FOR HEMP PLANTING IN KENTUCKY

Nation’sfirst HempWood operation to locate in Murray with $5.8M investment

Fibonacci will lease an 11,230-square-foot facility in Murray for its first manufacturing location with plans to establish a world-class, automated HempWood operation. The company located in Murray after its leaders established a relationship with Murray State University, and 800 tons of hemp stalks have already been contracted through growers in west Kentucky. The operation is expected to begin production this summer.

 HempWood – with its patented process and product made from hemp fibers and soy-based adhesives – has been in development for the past decade and is viewed to have a number of advantages over traditional oak hardwood. In addition to a higher availability of hemp – hemp stalks grow in six months, compared to oak trees, which take decades – Wilson said processed hemp can reach 20 percent higher density than oak, which provides sustainability and hardness. HempWood can be used in products ranging from flooring and furniture to woodworking projects and culinary serving boards.

 DYI 

Unwinnable

Trade War

Apple Decides During a Trade War to Move Mac Pro Production to China From the U.S.

There's the politics, for one, and that's a massive factor. Unless things clear up, there's the potential for a big tariff and a hefty price increase which Apple seems likely to subsidize, as it's worried about extra costs now. Maybe this is politics to placate China's government, especially after the reports that Apple was getting ready to move some manufacturing out of China to countries in Southeast Asia

Apple plans to move some manufacturing out of China, reports Nikkei

Apple is exploring moving between 15 and 30 percent of its hardware production out of China, according to a new report by Nikkei. The company reportedly has a growing team looking into moving production, and has asked key manufacturing partners like Foxconn, Pegatron, and Wistron to evaluate the available options. 

The catalyst for the shift is the ongoing trade war between China and the US, which is expected to intensify at the end of this month with the introduction of 25 percent tariffs on devices including phones, laptops, and tablets. However, Apple reportedly wants to shift production regardless of whether the trade dispute gets resolved. 

”A lower birthrate, higher labor costs and the risk of overly centralizing its production in one country. These adverse factors are not going anywhere… with or without the final round of the $300 billion tariff,” one executive, apparently from an Apple supplier, told Nikkei.

DYI:  Anyone thinks that outsourcing is over by Trump’s trade war with China is deluded.  Now that China is far more expensive manufactures are looking and many have already moved operations to lower labor cost countries such as Vietnam.  The only time manufacturing will return to our shores is with extreme levels of automation cutting out labor costs.  The days of vast employment for America in manufacturing are long since over just as farming once was a huge employer but machines/automation replaced vast farms hands.  Get used to it outsourcing is here to stay.

DYI

Bubble

Trouble

The Dying Days Of An Empire

There are quite a few people who have been harping on the demise of the USD as reserve currency for a long time, and I always think: look, nobody wants the yuan, let alone the ruble. There’s no trade being executed in these currencies. So taking over from the USD is a pipe dream.But that may very well change, and perhaps very fast too, if the US uses the dollar not as an economic weapon (and there are plenty issues with that already), but as a military one. That would potentially hugely speed up any efforts to move away from the buck in international trade.The US no longer has the economic, political or military might to dictate to the entire world any terms it wants to. Those days are long gone. That ended in Vietnam. Trump’s living in the last century, while Bolton and Pompeo, they live in their own time and world.

DYI:  As I’ve stated many times before the days of American Empire are finished.  No longer will we be able to push the entire world around at our beckon call!  However America will continue to be a powerful country within our sphere of influence primarily the Atlantic Ocean and portions of the Pacific.  Further away we push from our shores the costs will ramp up exponentially making it no longer possible to be the world’s sole empire.  The demise of the American dollar will take multiple decades to achieve however in the meantime countries such as Russia and China are looking to diversify away from the dollar as much as possible.

DYI

Hope

Springs Eternal

Trump Administration Pushes To Make Health Care Pricing More Transparent

President Trump signed an executive order Monday on price transparency in health care that aims to lower rising health care costs by showing prices to patients. The idea is that if people can shop around, market forces may drive down costs. 

"Hospitals will be required to publish prices that reflect what people pay for services," said President Trump at a White House event. "You will get great pricing. Prices will come down by numbers that you wouldn't believe. The cost of healthcare will go way, way down."

Like several of President Trump's other health policy-related announcements, today's executive order doesn't spell out specific actions, but directs the department of Health and Human Services to develop a policy and then undertake a lengthy rule-making process.

 DYI Quick Comment:  The devil is in the details!

 "Today patients don't have access to prices or choices or even ability to see quality," said Cynthia Fisher, founder of a group called Patient Rights Advocate. "I think the exciting part of this executive order is the President and administration are really moving to put the patient in the driver's seat and be empowered for the first time with knowledge and information."

DYI:  Hope does spring eternal!  If this has any teeth [and is not repealed by the next president] if done correctly will drop prices considerably.  My suspicion he will not want this to go into effect until after his upcoming reelection bid for when this goes into effect will cause a short term depression. 

That is correct depression, not recession, as health care will move back from 21 percent of the economy to around 5% to 7%.  Any decline in GDP past 10% contraction is considered a depression.  Of course there is a silver lining as all of this money begins to shift into the other parts of the economy – a two year lag time – the economy will roar back pulling many back into the work forces who have simply given up.  If we could go back and reregulate the banks real estate cost would will come back to earth allowing the millennial generation the ability to form new households.  As it stands now most have relegated themselves permanently living with their parents.  Do away with student loans thus dropping the cost significantly for higher education ending many young people from the very real possibility of being debt slaves for the majority of their lives.  These 3 areas if addressed in this manner will open the flood gates to real growth in the economy.

Back to Trump and health care we will not see any meaningful details for at least a year possibly two.  Until then I’ll be on the lookout for details.

DYI

The New York Times casually acknowledged that it sends major scoops to the US government before publication, to make sure “national security officials” have “no concerns.”

By Ben Norton

This confirms what veteran New York Times correspondents like James Risen have said: The American newspaper of record regularly collaborates with the US government, suppressing reporting that top officials don’t want made public.

DYI:  The breadth and depth of the infiltration of our security services – CIA, U.S. Army Intelligence, Naval Intelligence etc. – into the main stream news and media has been going on for decades.  Almost everything you read, hear [radio], and see on TV has been cleared by the CIA plus the many other security services.  Not just the news but many TV shows have planted propaganda supporting such faked events as the moon landings.  And yes folks America never made it to the moon; it was all faked and yet they keep on lacing that into magazine articles highlighting the landings with TV specials on the History Channel no matter how ridiculous it seems to the informed citizen.

This fakery has been going on for decades with one stage faked or hoaxed event after another all for the benefit of the wealthy elites controlling our security services.  Check out Miles Mathis updates a top notch researcher/writer of decades past along with many faked or hoaxed events.  Well worth your time.  At least with the author of this article above places a bit of light as to the depth of our problems. 

DYI

Gold

Gains more Respect

Russia Bought Another 200K Ounces Of Gold Right Before The Rally

Russia continues to add gold to its reserves, buying another 200,000 ounces or 6 tonnes of gold in May, according to the country’s central bank. 

During the last decade, Russia’s gold reserves have gone from 2% to 19% as of the end of 2018 Q4, according to the World Gold Council’s data. 

Some analysts suggested that the 

reason behind this increased interest 

in the yellow metal has been a trend 

to diversify away from the U.S. 

dollar. 

“I think what Russia is doing, or other central banks are recognizing, is that they need to increase their gold reserves because of the impending dollar crisis,” Euro Pacific Capital CEO Peter Schiff told RT last month.

DYI:  Wonder why all of the Russia, Russia, Russia talk??  The American empire and the almighty dollar will no longer be the reserve currency for the world.  The U.S. will remain a powerful country however its days of commanding anyone and everyone [countries] will be over.  The U.S. dollar is only backed up by the full faith and credit of the U.S. economy.  As our standard of living for average John and Jane Doe continues to decline; so will the value of the dollar as an excepted medium of exchange for worldwide trade.

This will be a one to two decade event.  A grinding down process historians will mark the beginning of the end for the American dollar as the world’s reserve currency.  It will be shared with gold trading platforms along with its lesser cousin silver as a medium for world trade.  No longer will the U.S. be able to pay for its imbalance of trade by having nations recycle their dollars into treasury securities.  They will demand gold or made legal their ability to purchase corporate assets here in the States.  They will demand something of value not printing press treasury securities.

 

Again this will be a slow grinding affair just as England with the British Pound was the reserve currency the move to the dollar was around a two decade or so process before the American dollar was declared in international circles as the new reserve currency.  So far it appears that gold will once again be the reserve currency that no nation will be able to command.

DYI

Gold

Get’s Respect

gold as of 6/25/19

$1431.60

Gold bottomed December 16, 2015 at $1050.

"Somebody"

 Finally Cares About Gold

Lower real interest rates are gold price-positive. And not only are real rates falling right now, there’s currently $12 trillion in negative *nominal* debt trading worldwide right now: 

On Tuesday, Mario Draghi apparently went rogue on his fellow policymakers and launched into a swan song version of his all-time hit “Whatever it takes”. 

The next day, Jerome Powell at the Fed confirmed his willingness to ease and let the market know he stands ready to cut rates multiple times over the next year. 

That — plus a downed US drone patrolling the Iran border — poured gasoline on gold, which spiked as high as $1,410/oz, finally breaking free of the $1,350 ceiling that had blocked its advance for years. 

On the fundamental side, more and more experts and pundits are waking up to what PP has been saying all along: the central banks have painted themselves into a corner they don’t know how to get out of. So they keep using the one tool they have, hoping for a different outcome (and yes, perhaps pushing all of the wealth into the hands of the 0.1% *is* their desired outcome). 

But that strategy is based on perverted logic; it can’t be sustained. You can’t print prosperity. There’s only so far asset prices can rise while real wages remain stagnant. Housing prices can’t long stay above people’s ability to put food on the table, even with <3% mortgages. 

There’s a point at which more stimulus no longer has any effect. 

So it’s quite likely a nasty deflationary downdraft lies in our future. 

While this may initially cause gold to drop in price, the metal should fare much better than the pantheon of risk-assets falling from their current all-time bubble highs. 

As we often say in our live presentations: “In a bear market, expect to lose money. The trick is to lose a lot less than everybody else”.

 DYI:  Gold finally get’s respect.  There was a comedian by the name of Rodney Dangerfield who made an entire career out of how in life he never got any respect from anyone not even his wife.

Since gold peaked back in 2011 moving into its bear market not just dropped the price of gold this bear man slaughtered precious metals mining companies dropping up to and many past the 70% mark.  Ouch!

DYI’s Dow/Gold Ratio averaging formula was systematically taking money off the table as gold [plus the mining company shares] went on its meteoric rise.  Of course what little was left was smashed.  With the constant sale of gold shares during this time DYI’s averaging formula’s was buying stocks, long term bonds with the remainder in cash [short term notes].  What little was lost in gold was more than made up by those gains pushing us further and further into the profit zone.

So here we are today with our averaging formula’s producing our model portfolio.

   Updated Monthly

AGGRESSIVE PORTFOLIO - ACTIVE ALLOCATION - 06/1/19

Active Allocation Bands (excluding cash) 0% to 50%

68% - Cash -Short Term Bond Index - VBIRX

32% -Gold- Global Capital Cycles Fund - VGPMX **

 0% -Lt. Bonds- Long Term Bond Index - VBLTX

 0% -Stocks- Total Stock Market Index - VTSAX

[See Disclaimer]

**Tocqueville Gold Fund TGLDX is a pure play 100% junior gold mining gold fund.  Vanguard's Global Capital Cycles Fund maintains 25% in precious metal equities the remainder are companies they believe will perform well during times of world wide stress or economic declines. 

In the short term DYI has no idea which way gold will move and by the way nor does anyone else.  They may seem clairvoyant you just hit upon an individual who made a great short term guess.  What we do know when measured by the Dow/Gold Ratio gold is trading just below fair value or more bluntly a bit of a bargain.  At average or fair value our model account would have 25% but since it is a bit of a bargain is why our account stands at 32%.  With the remainder 68% in cash DYI has plenty of fire power as valuations improve whether gold, stocks, or long term bonds.  Now that the fireworks have begun the Great Wait is now over as the bear has arrived.  Now we have the arduous task of waiting for valuations to improve slowing putting money back to work.

  DYI

The

Fat Attack

DYI:  If you are old enough you will remember the high fat scare days from the 70’s all the way to the early 90’s.  Ancel Keys [1904 – 2004] physiologist who theorized the connection between saturated fat and heart disease kicked off the low fat craze, has gone full circle and now known to be false. 

                 Ancel Keys

The true culprit is refined carbohydrates [especially sugar and high fructose corn syrup] activating inflammation leading to heart disease, hypertension [high blood pressures], obesity along with America’s largest epidemic type II diabetes.  Many have postulated that Ancel Keys who’s huge claim to fame the highly successful World War II K-rations desired another standing ovation this time for his hypotheses regarding saturated fat and heart disease.  Many believe in his hunt to find a connection he ended up fabricating his data to fit and justify his hypothesis.

To this day doctors – who know nothing about nutrition – have continued dispensing the saturated fat nonsense.  Some go as far as stating that the medical profession has been lying for almost 30 years that eating low carb, high fat, and moderate protein will increase both triglyceride and the bad cholesterol numbers in your body.  That maybe true [most likely so] at the high levels within these corporate health organization but the doctors working day to day with patients simply to be frank when it comes to this subject are dumber than a pile of rocks.  Most are brainwashed into believing the current dogma with zero desire to leave the current plantation of thought for fear of rocking the boat.

Below is an excerpt from Wikipedia spelling out the main culprit to America’s obesity epidemic along with the other associated medical problems.   

The book, Pure White and Deadly, and author suffered a barrage of criticism at the time, particularly from the sugar industry, processed-food manufacturers, and Ancel Keys, an American physiologist who argued in favour of restricting dietary fat, not sugar, and who sought to ridicule Yudkin's work. In later years, Yudkin's observations came to be accepted. 

A 2002 cover story about sugar by Gary Taubes in The New York Times Magazine, "What if It's All Been a Big Fat Lie?", attracted attention, and the following year a World Health Organization report recommended that added sugars provide no more than 6–10% of total dietary intake. In 2009 a lecture on the health effects of sugar by Robert Lustig, an American pediatric endocrinologist, went viral. The subsequent interest led to the rediscovery of Yudkin's book and the rehabilitation of his reputation.

 

Its not just sugar it is all preprocessed foods that are heavily laden with refined carbohydrates that is the culprit to America’s and other countries as well massive medical epidemic.  There are only three macro nutrients fats, protein and carbohydrates.  You may be surprised there are zero minimum daily requirements for the consumption of carbs.  That right there tells you something is amiss with the average American diet.  The process food manufactures and sweets industry plus grocery store chains obvious destine for this attack upon their products.  Here is the reason.  Grocery stores have two big costs.  One is labor and the other is food spoilage.  Doesn’t affect labor that much but these products have very long shelf life making them a big hit with both industries.  And these products are cheap to make and thus have a much higher profit margin.  Notice all types of TV commercials for these types of foods but you never see anything for broccoli or brussels sprouts.

If you have read this far then you may still be interested here are a few links describing in greater detail to get you started.

Demolishing Lies On Low Carb Eating*

A low-carb diet for beginners

Lose Weight with Today’s Atkins™

Wikipedia just can’t help it and have to shoot themselves in the foot to the bitter end taking a cheap shot at Atkins who started the low carb lifestyle.  And no it is not a fad.  Below is what Wikipedia then Denniger at Market-ticker.org had to say.

Wikipedia: 

The Atkins diet is a low-carbohydrate fad diet devised by Robert Atkins. The diet is marketed with questionable claims that carbohydrate restriction is critical to weight loss.  There is no good evidence of the diet's effectiveness in achieving durable weight loss and it may increase the risk of heart disease.

Denniger:

Myth: It's a "fad diet."  Eating low-carb is a lifestyle, not a diet and it is not a fad.  In fact humans, prior to the discovery of high-density agriculture, almost-exclusively ate in this fashion.  

A "fad" is an unproved and new way of doing something without examination as to validity. 

It is in fact the modern mania with vegetable oils, nearly none of which exist in nature, along with other highly processed foods such as cereals and sugar-laden things, driven by literal billions of advertising dollars, that is the fad.  Nobody spends a billion dollars advertising broccoli crowns on TeeVee!

 DYI

The

Bubble

Is in Trouble!

Manufacturing, services PMI slump to multi-year lows in June

The numbers: IHS Markit said its flash manufacturing purchasing managers index dropped to 50.1 in June from 50.5 in May, the worst reading since September 2009. 

Meanwhile the flash services purchasing managers index in June fell to 50.7 from 50.9, the worst reading since March 2016. 

Any reading above 50 indicates improving conditions. The flash estimate is typically based on approximately 85%–90% of total survey responses each month.

DYI:  More and more evidence of recession is piling up as this long in the tooth recovery ends in a downturn.

 DYI

Bubble

Trouble

How Much of Your "Wealth" Is Hostage to Bubbles and Impossible Promises?

All the ironclad promises made in bubble economies ultimately depend on credit-asset bubbles never popping--but sadly, all credit-asset bubbles pop. So all the promises--which are of course politically impossible to revoke--will be broken as all the credit-asset bubbles that created the "wealth" that was to be redistributed--pensions, retirement benefits, etc.--deflate. 

It is widely viewed as "impossible" for the housing market to lose 50% to 75% of its value. It is equally widely viewed as "impossible" for the stock market to lose 50% to 75% of its value. 

Yet all credit-asset bubbles pop and lose 50% to 75% of their value--or even more. What's "impossible" isn't the bubbles popping--what's impossible is for bubbles to inflate forever and never pop.

Two retracement levels beckon on the Case-Shiller Home Price Index: a retrace to the previous Bubble #1 lows--a roughly 33% decline--or a full retrace back to pre-Bubble #1 levels, about a 60% drop from current levels.

DYI:  Yep the author has it nailed; everything – except for gold and silver – is jacked up in price.  Stocks based on historical average dividend yield would have to drop by 56% just to go back to its mean of 4.34%!  The stock market to mean invert [overvalued to undervalue] at 6.66% yield will require a 72% decline.  I doubt this will happen in one big decline more likely the rises and falls of the 1970’s is far more probable.

 

Residential real estate depending on where you live is most likely massively overvalued as measure by price to rent ratio.

US Price to Rent Ratio Reviewed by City in 2019

Top notch article AND an in depth listing of cities with very low price to rents along with listing of very high price to rents.  To say the least if you are in a high area you may want to sell and rent.  I know a home is a most personal asset however these are not normal times requiring a different thought process.  Between deficit spending, sub atomic low interest rates by the Feds and constant wrongheaded policies we are back in a bubble.  When it bursts these assets will deflate not immediately but move downward in a rollercoaster fashion year after year.

DYI

Russia

Pivots South

PEPE ESCOBAR:

The Unipolar Moment is Over

The Russia-China strategic partnership, consolidated last week in Russia, has thrown U.S. elites into Supreme Paranoia mode, which is holding the whole world hostage.

It was obvious this was slowly brewing for the past five to six years. Now the deal is in the open. The Russia-China comprehensive strategic partnership is thriving; not as an allied treaty, but as a consistent road map towards Eurasia integration and the consolidation of the multipolar world. 

Unipolarism – via its demonization matrix – had first accelerated Russia’s pivot to Asia. Now, the U.S.-driven trade war has facilitated the consolidation of Russia as China’s top strategic partner. 

In 2014, Russia did not react to sanctions imposed by Washington. Then, it would have sufficed to merely brandish the threat of default on $700 billion in external debt. That would have killed the sanctions.

DYI QUICK COMMENT:  Russia is doing what is called in boxing “rope a dope” perfected by Muhammad Ali allowing the opposing fighter – while keeping his guard up – to punch himself out to the point of exhaustion. 

Beijing for its part seems to have finally absorbed that the current Trump administration offensive is not a mere trade war, but a full fledged attack on its economic miracle, including a concerted drive to cut China off from large swathes of the world economy.

 

DYI:  Russia has made the pivot to Asia now being the principal supplier oil and gas to China along with many of the other countries in the region.  Add on both countries now have massive gold reserves both are making the pivot away from the American dollar being the principal trading currency.   The U.S. will remain a powerful country however our days as a global dominating empire is now on the down hill slide.  The American dollar will move more into the realm of the British pound [still powerful despite their small size] with other competing currencies along with gold/silver being traded as well.  When the dollar becomes obvious its days as the reserve currency are over the U.S. will experience a spat of inflation very similar to the late 60’s, 70’s and early 80’s.

This is also the beginning of the end for NATO as Central Europe will become dependent upon Russian vacillations for the delivery of natural gas from Russian pipelines.  To say the least NATO is frowned upon by the Russian military so tired of multiple NATO forces at her borders.

           

Below is what America should embrace.  The picture and map I believe speak for themselves.             

DYI

Dow/Gold Ratio as of 6/17/19

19.53

Gold has Beaten U.S. Dollar for Nearly 50 Years

When stripping out inflation and assessing gold prices in real terms, the yellow metal emerges as a solid performer with an average annual return of 5.9% between 1970 and 2018. Meanwhile, the dollar has returned a yearly average of 4.6% during that period when held in a bank account with a three-month maturity. The analysts noted that the dollar’s under-performance stems from its loss of purchasing power, which has eroded by 85% since 1970.

Shanghai Gold Price Hits 6-Year High, Move to $1700 'Will Quickly Follow' Break of $1400

GOLD PRICES held a $4 loss for the week so far in London on Thursday, trading at $1336 as Western stock markets rose and major government borrowing costs dropped further on the bond market, setting fresh all-time negative lows on German Bunds at -0.25% per annum. 

With US interest rates now "going down probably to zero," Jones reckons "[Gold's] got everything going for it," not least because "after 75 years of globalization, that's suddenly stopped and reversed. 

The Gold/Silver Ratio today held above 90 for a 4th session running, extending gold's strongest pricing against the gray metal since March 1993.

Gold/Silver Ratio Hits New 26-Year High

Should gold prices make substantial gains, agrees Metals Focus, "we could see the silver price start to gain from positive spillover effects...[and it may] benefit from being a far smaller, less liquid market, compared with gold." Metals Focus expect silver to start outperforming gold late in 2019, "driving the gold:silver ratio lower" into 2020.

DYI:  Just as the headline of the Dow/Gold Ratio chart states if you understand this chart you will escape misery is very correct.  The year 2000 stocks were insanely priced with precious metals on the give-away-table plus making the mining companies – if you don’t mind the pun – dirt cheap.  Back then you were catching fish out of barrel.  Of course you would have been going against conventional wisdom when speaking about gold or any other precious metal or their respective mining companies.  To be blunt most folks thought you had lost your mind.  Didn’t you know that all of the dot.com’s or other high tech companies would be able to just mint money forever!??  In the end many would end up being dot.bombs headed for the dustbin of failed companies.

That was then but today is now.  Currently the Dow/Gold Ratio is around its mean depending how you measure [DYI measures since 1913].  So…what we have is the obvious of neither over or undervalued asset.  Prices could go either way this is why DYI’s averaging formula has our model portfolio for gold at 32% and holding a massive cash horde of 68%.

Stocks as measured by the Shiller PE is at nose bleed levels having 10 year estimated returns at best zero or worst with loses all before REAL returns are factored.

  

 Shiller PE as of 6/17/19

29.73

Long term bonds – unless you are speculating on the next economic decline are of little bargain with their sub atomic low rates.

  

As of 6/17/19

2.09%

I do find his chart interesting as 10 year T-bonds remain below their 200 month moving average.  10 year T-bonds peaked way back in September of 1981 at 15.32% and so far on July 8, 2016 at the sub atomic low of 1.37%.  Nevertheless the obvious bang for your buck for long bonds was back then [unless you have a time machine] today even with mild inflation bonds on a REAL return basis is a losing proposition.  As the 200 month moving average continues its downward plunge unless yields continue to drop eventually they will have to go negative such as Germany or Switzerland has experienced to keep the long term trend intact.  Unfortunately for both those who are retired are having to draw down more and more principal to help pay those bills AND for the young person attempting to compound what ever extra money that can be saved both are in for a frustrating time period.

DYI’s market sentiment chart has money market funds or short term bonds as the best bargain among stocks, long bonds, gold, or cash.

Market Sentiment

Smart Money buys aggressively!
Capitulation
Despondency
Max-Pessimism *Market Bottoms* Short Term Bonds
Depression MMF
Hope Gold
Relief *Market returns to Mean* 

Smart Money buys the Dips!
Optimism
Media Attention
Enthusiasm

Smart Money - Sells the Rallies!
Thrill
Greed
Delusional
Max-Optimism *Market Tops* U.S. Stocks
Denial of Problem Long Term Bonds
Anxiety
Fear
Desperation

Smart Money Buys Aggressively!

Capitulation

Have times changed since 1980 and they will again we don’t know when but by understanding value it is far easier to recognize when the change comes.  Of course at that time you will be going against the convention wisdom of that day with almost [except those whose know value] everyone thinking you have lost your mind.   

Till Next Time      

DYI