Negative Feedback

Here is some feedback a republished post of mine (Market Summary; Saturday Morning Cartoons) got at a leading gold website from a reader.

“The other support has been the very real economic recovery in the US…”

This is so completely wrong, its scary.

Anyone who makes this claim has absolutely no credibility, and no one should listen to them, and definitely don’t base any investment decisions on their advice or analysis.

The reader cherry picked something positive I wrote about the US economy and left out mitigating information that was right in the same segment…

Deflationary and economic growth troubles across the globe are blamed for the recent strength in the US dollar and to a degree that holds merit.  The other support has been the very real economic recovery in the US (beginning with the Semiconductor sector, which NFTRH 312 looked into in depth last weekend) born of very unreal (i.e. unnatural and unsustainable) policy inputs (ref. the chart in this post showing the S&P 500 tended all the way by supportive policy).

Naturally, it stands to reason that if dollar compromising policy is promoted to keep assets aloft, then a strong dollar is unwelcome because not only would it begin to eat away at exporting sectors like manufacturing, but it would also make assets less expensive.  But that should be a good thing, no?  Declining prices in things like oil, food and services?  Not on the one-way street that is our current system of Inflation onDemand.

By the way, I received an email yesterday from a biiwii reader who has grown tired of the gold websites and “the same old arguments”.  He also notes his boots on the ground information that is very similar to mine with respect to the booming Semiconductor industry.  I am in Massachusetts and he is in California.  These are the hotbeds of the Semiconductor equipment sector.

He notes that his scrap metal vendor (hey, those guys are right there in real time in the manufacturing cycle) “has never seen the kind of rapid growth that he is seeing now” and that rents, traffic and commercial property are booming and that the scrap vendor’s customers (major Semi and machining companies) advise him to keep the bins coming for the next 4 years.  He also notes that this is exactly the kind of talk he heard in 2006, as the last cycle began the process of topping out.

But my point with this post is not to cry over some negative feedback.  It is to sort of shake my head publicly about how some people refuse to open their eyes while digging in to a failed view point no matter how long its failure persists.

I understand that this commenter could be from a depressed region not seeing the boom as opposed to putting his fingers in his ears and going “la la la la la…” every time someone puts forth contrary information to his world view, but here are some facts…

  1. We noted in real time that the Semiconductor equipment industry was ramping up nearly 2 years ago and that its implication would be coming strength in US manufacturing.
  2. A long streak of uninterrupted manufacturing strength followed.
  3. Improvement in employment data followed that.
  4. Every step of the way we have noted that the economy is strong, the stock market was not over valued (until recently) and that it was all built on unsustainable fundamentals (i.e. policy inputs)

I mean, right there in the very same paragraph that the commenter cherry picked was the mitigating discussion about lack of sustainability.  I truly believe that something about human nature makes many people wholly unequipped to deal with financial markets in a rational manner.