Every so often, I am going to reach back into the past to reproduce things I wrote in wildly different times, in the effort to remind where we have been and to stay focused on where we are going. I have firm big picture beliefs that have not changed even as the intermediate and short terms remain subject to refinement and/or revision. From NFTRH4 dated October 18, 2008:
"From a contrary point of view we see the clowns in Washington stuffed into a tiny little car in one ring while the second ring in the global money circus presents a daring high wire act by the ECB as the third ring features Asian tigers jumping through flaming hoops. Credit remains frozen, at least to those destinations that even smell like the leveraged offenders in the lead up to the global financial crisis. The money is there. Authorities have created tomorrow’s moral hazard, but it is not getting out into economies or even market ‘plays’. No doubt the fear overhang from situations like Lehman’s CDS derivatives disaster is heavily in play here. This can change, especially given that more and more people are coming to believe it won’t. I call that a growing counterparty sitting happily in USD...
Meanwhile, things are setting up nicely for a contrary play where the entire world is so gripped by credit and economic contraction, and freshly printed funny 'munny', rather than blasting out full force from monetary policy spigots, just oozes with the viscosity of prerefined crude oil and the media still work Armageddon ’08 into the terrified public’s consciousness in a would be run up to the great(est) depression. Funny thing is, a majority of the new depression mongers were just months ago blissfully aboard the great inflation trade. This is the way markets work. Always have, always will I suppose. We may indeed get a depression, but with the pile of ‘money’ being willed into existence, any reduction in the viscosity of the goop dripping out of the spigot is likely to signal it will be an inflationary one. Watch all sectors closely going forward."
