The King World News blog has a timely excerpt from Richard Russell, who's been writing his newsletter since the 1950s.
I'm linking to it because it strikes a chord in me. We're certainly in the "fog of history" as far as the stock market is concerned. Of course, we're always in the moment, living in real time, but the "fog" seems thicker than usual to me.
Yeah, one day I'll look back and see it all so clearly.
That's why, to beat a dead horse, I like my gold exposure, I like my cash exposure, and I like still being in stocks. My portfolio isn't quite one-third in each of those categories, but pretty close.
From the KWN blog post quoting Russell:
Today QE2 ends, and supposedly the Fed steps back. The Treasuries are now on their own, and the Fed has stopped buying. The smart boys are sticking to this scenario. With the Fed no longer buying Treasuries, the Treasuries start falling while interest rates rise. This tends to throw the economy into the dumps. The Fed will watch for a while as the edge is taken off inflation. But as the economy worsens, the Fed will be forced to stimulate again. Once stimulation is back, the precious metals will boom. That's the line and scenario that I hear.
The Russell reaction -- It bothers me that it's all so pat and so widely accepted. So far, the Treasuries are acting according to script and so is gold. The stock market is acting as if something better is riding on the winds of the future. Could something be amiss with the accepted scenario? Could Bennie Bernanke have it right? And why is Treasury Secretary Geithner ready to say "bye" to the administration? What can he see ahead that he doesn't like? Geithner's been Obama's leading economic confidant. Certainly, an unusual time to exit.
Read the entire post here.
It will be interesting to see what the second half of 2011 has instore for us.