Maybe Hoarding Gold and Canned Beans Isn't Such a Bad Idea

It only takes a small pinprick to deflate a balloon

Mon, Apr 24, 2017 | 2862 Comments
World economic outlook: Less than stellar
World economic outlook: Less than stellar

The first course of the French election has been served, and I think it safe to say that it went entirely as expected.

Gold bulls snatched their little ingots off the table and equities traders plowed back in to the markets with vigor…. Same old, same old, so nice to be back in the ‘comfort zone’. Now all the markets need is for Macron to be elected president of France and the EU can breathe easier with a new oxygen bottle plugged into its ICU.

There should be no further misadventures — just ask Hillary.

Personally, and as a sometimes risk manager in my business life, this may be a case of information overload, and a certain human unwillingness to contemplate and factor into our investing profile the ‘what if’s’ of our world.

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It is Monday night and the surprisingly unremarked U.S. debt ceiling issue will be taking center stage this coming Friday. Let us not forget that a U.S. battlegroup is steaming to North Korea for real this time. If we lived in Japan today, we might notice that all manner of purification medicines and respiratory protection have disappeared from retail shelves. The UN, even with Russia’s prodding, seems stymied and unable to commit to sending an investigative team to physically sample the soil and objects in the region of the “gas attack” in Syria.

Meanwhile, Ukrainian government forces are using more intense means to beat down civil opposition in the rebelling DNR and LNR.

Equities now on both dollar and Euro bourses are fully valued and the dollar is weakening.

Some non-market types have even noticed how, incredibly, many shops like the following already closed or will close their doors and lay off employees this calendar year:

bebe – all 180 stores, Rue21 – 400 stores, JCPenney – 138 stores, Macy’s – 68 stores, Sears & Kmart – 150 stores, Abercrombie & Fitch – 60 stores, Guess – 60 stores, Crocs – 160 stores, The Limited – 250 stores, Wet Seal – 171 stores, American Apparel – 110 stores, BCBG – 120 stores, Payless ShoeSource – 400 stores, hhgregg – 220 stores, GameStop – 150+ stores, RadioShack – 552 stores, Staples – 70 stores, CVS – 70 stores, Gander Mountain – 32 stores, Family Christian – 240 stores. Overall, that is over 3,000 known name emporiums already closed or closing down in the US for this 2017. I have not been able to get numbers for single store stand-alones yet. While I don’t know if there is an index for Malls, it seems to me that is where the rubber meets the road in the reality of the day to day. The wider effect of these closures near these retailers will also no doubt be felt. Some may say that this is a pedestrian example of simply changing economic drivers, but I think it is indicative of a more serious and potentially violent evolution.

Seems a bit early to cash in those Canadian Maple Leafs, Krugerrands, and ingotlettes, no?

Just saying: It only takes a small pinprick to deflate a balloon.


Paul Goncharoff is Chairman, Disciplinary Committee, National Association of Corporate Directors, Russia.


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