The big problem for investors today is that the red tide is just one of several monetary tides, and they are all rising. Maybe it's global warming! Whatever it is, it makes it very difficult to bet against rising asset prices, and even more difficult to find absolute or even relative value in today's markets.
The biggest cycle of all today may not be the commodity super cycle. Instead, the biggest cycle may be the monetary super cycle that's seen all central banks embrace the U.S. model that requires inflation. We are in the midst of a synchronised global credit bubble-the biggest one we've ever seen. It's the melt up we wrote about in March, only it's much higher and its melting much higher than we thought.
Is it all going to end this week? Well, we wouldn't bet on it. Everyone seems to be "all in" for this bubble. We haven't entirely folded, although the precious metals markets strike us the best long-term bet. But the global pot is getting awfully large. Will someone win big? Or is everyone about to lose?
And a final observation. The remains of chief engineer Scotty were found in mountains of New Mexico this weekend. The canister containing the cremated remains of actor James Doohan fell back to earth after spending some time in sub-earth orbit following an emotional launch a few weeks ago from the new spaceport in New Mexico.
What's the point of going to the edge of the final frontier if you are merely going to fall back to earth? Or is how it always ends for human beings, striving followed by falling?
We think the man and his family were robbed. You'd think with today's engineering it wouldn't be too hard to figure out how to send up a rocket high enough to escape the earth's atmosphere, and then slowly fall out of orbit, and back through the sky in a blaze of glory, re-entering the planet as a shooting star instead of a can of ashes. But like everyone else these days, maybe our expectations are too high.
Shoot for the stars, dear reader. But keep your feet firmly planted on terra firma. There's less distance between your backside and the ground that way. And you don't have as far to go when you pick yourself back up.
Dan Denning
The Daily Reckoning Australia
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About the Author
Dan Denning is the author of 2005's best-selling The Bull Hunter (John Wiley & Sons). He began his financial publishing career in 1997 and has covered financial markets form Baltimore, Paris, London and, beginning in 2005 Melbourne. He’s the editor of The Daily Reckoning Australia and the Publisher of Port Phillip Publishing.
