Will the real indicator please step forward......


"If anything is certain, it is that change is certain. The world we are planning for today will not exist in this form tomorrow."
-- Philip Crosby 1926-2001 Consultant

While this quote is often referenced or has been said in another way in various times and venues, it is accurate. The ironic and even perplexing concept about the current economic, market and political environment is that the signals are so mixed, crossed and conflicting.

Consider these data points:
* Gold – all time highs (Inflation / Weak Dollar Indicator)
* Silver – highest price since 1980 (Inflation/Speculation Indicator)
* Treasury Bond Yields – Near all time lows (Deflation / Fear Indicator)
* Stocks – holding after 60% move up (Growth / Risk Indicator)
* Foreclosures still rising (Weak Economy/Employment Indicator)
* Near 10% Unemployment (Weak Economic Outlook Indicator)
* Increasing Industrial Production Reports (Economic Growth Indicator)
* Falling Consumer Sentiment (Bearish Indicator)

To say the least, we are in a mixed indicator environment. One that leaves even the most intelligent scratching there heads a bit. Now listening to some of media, and depending on their bias, there are plenty out there that are willing to take a firm stand on certain financial demise or opportunities that abound. But absolute certainty of the future is not critical. Strategic and prudent decisions are.

As of this writing, we have seen multiple weeks of extreme correlation between all assets. The problem being, they cannot all be correct. Either inflation is coming or not, but both inflation and deflation cannot occur together. Simply put, Gold, stocks and bonds do not historically go in the same direction for long. They are all telling a different story.

We believe the conclusion will come quick (as in decisive moves, not pending time), thus proper position, allocation and liquidity combined with risk and loss understanding is important. Now is a time to be vigilant not lethargic.

Will the real indicator now step forward!

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