Something To Chew On While We're Marking Time

What it comes to our investments, we're pretty much marking time. Since there's not a lot going on, we're going to post something we can chew on while things muddle along.

But first, here's why we're saying we're marking time.

Sure, stocks have had a few down weeks. But before that, it as all up. This past week? Squeezed out some gains for the first non-down week in a while. 

So we're pretty much doing nothing much this year so far.

Bonds, after a horrendous 2020, had a bit of a reversal for the first part of the year. But wait: looks like all that came to a screeching halt. Bonds have reversed recently. 

So we're pretty much doing nothing much this year so far.

What about Gold? It's bounced around quite a bit. If we check GLD we find it started the year at 171.23. It ended this week just north of 172. Whoop-dee-do!

So - yup, you guessed it - we're pretty much doing nothing much this year so far. 

Now, there's no shortage of prognostications about where we go from here. But we're not going to catalogue all the brilliance spit out by all the geniuses out there. And don't worry, we're not going to offer anything up on this end. We've posted some of the analysis coming from what we call our "Brain Trust" - as is our custom - in recent weeks. You're welcome to check these out, if so inclined. But for now we'll set all that aside.

The fact is, the market will do what it's going to do. And, frankly, none of us has any say in it. We just try to position ourselves to do the least damage - the preferred approach in a Bear Market, which we're still wallowing in when it comes to stocks and, it would seem as well, bonds.

What about Gold and the Precious Metals universe? It's actually done pretty well over 2022 and so far this year - at least compared to stocks and bonds. Then again, with its typically volatility - especially if you hold the precious metals mining companies - you may have a stiff heck and a headache from being whipsawed back and forth. And, surely, it couldn't hurt to seek a position that inflicts the least pain, as with stocks and bonds. 

Indeed, had we been more defensive in the PM sector last year, and so far this year, we'd have had better results than the relatively OK performance we've seen for the last year and a couple of months. But that's water under the bridge.

At times like this, we're better off taking a few steps back from our investments, while keeping one eye on them, just in case. Besides, there's a lot of other factors that go into boosting or sucking the life out of our wealth. And when it comes to sucking the life out, what could be more insidious than inflation?

Yes, that product of the Fed's machinations going back to the early 20th century has reared its ugly head again after napping for some years. Not that the long nap from the early 1980s - or from the early part of the 20th century for that matter - hasn't sucked out enough already. But lately, the darn thing woke up and started using a high-powered vacuumed cleaner to suck up anything that's not tied down. 

Now, you'd think that with the loud, powerful sucking going on, a Minneapolis Fed president like Neel Kashkari would tiptoe carefully when being interviewed. But you'd be wrong. No, this guy recently said "Wage growth is too high." Not prices, but wage growth!

But rather than vent the steam that built up from the rising blood pressure that ensued upon my first reading his comment, we'd do better to read a really excellent post by Mish Shedlock. Read it an weep might be a better way to put it.

If you don't know him, Mish is one of the better sources of objective analysis out there. He's not paid by any bank or Wall Street firm. He's one of the few folks I like to check in on regularly. This particular post is quite detailed, but there a lots of pictures to help absorb the details. 

Sure, workers' wages are up - sort of. But guess what's up a whole lot more? Yep, prices. And when you factor in inflation overall, wages aren't up as much as it seems. Not only that, but if you extend your timeline back a few decades, it's clear that wages have basically gone nowhere, while prices have...well, you can figure it out. You'd do well to read the whole article. Here's a little tidbit to encourage that. It gives you a hint at Mish's response to Kashkari's outrageous comment:

Kashkari is concerned that workers are making too much.

This is what the Fed has done with its perpetual policy of trying to create more inflation. 

These are the people making the decisions for the rest of us. Something to chew on, huh?