Monday Thoughts – The Deep Breath Before…


The current situation has me pondering. I am eager to take some kind of action but know that patience and prudence are key at these times. Waiting for something to happen reminds me of Gandalf’s quote in Return of the King as they awaited the march of Sauron’s army to their gate when answering the hobbit Pippin’s comment that it seemed very quiet – “it’s the deep breath before the plunge” Gandalf remarked.

What will happen next? many scenarios face us including:

  1. approval of additional stimulus packages that shake the world’s confidence in our currency
  2. the stimulus packages, money printing, etc worldwide respur growth sooner and everyone out of a job gets new job
  3. the stimulus works, profitability rises, but many of the unemployed are unhirable now that some businesses have permanently left
  4. the global economy picks up real growth but the US experiences only nominal growth leading to high inflation here (and in some other Western economies) only
  5. Everything picks up and nominal growth resumes much higher than real growth causing global inflation
  6. everything works out perfectly – stimulus reinvigorates the economy, the central banks pull back stimulus gently enough to restabilize monetary policy, tax revenues increase to pay back all of our debt spending and stock markets hit new highs making all pensions everywhere solvent again

As you might guess I highly doubt number 6 and think a hybrid of 4, 1, with a bit more global inflation, not just in the US as the demand for raw materials increases rapidly to meet the growth needs with not enough immediate supply to satisfy the need.

But who knows what will really happen. I am positioned for what I believe but there’s always a chance I’m wrong. Since people count on me not to be too wrong:), I do a lot of research and position all of us for flexibility.

It seems to be a time of flexibility in everything – I don’t see a need to rush into real estate, or any other kind of investment though I think the less the liquidity the more the opportunities (maybe for people who buy closely held businesses?).

I’m keeping my options open…