The markets are debt-obsessed once again, I’m afraid — not corporate debt, as they were in 2008 and 2009 when any company with leveraged was thrown out the window, but gummint debt. I don’t know whether this will be a real “reckoning” for the US government, when we really take stock of our obligations and our assets and make them somehow fit together on the same spreadsheet, but somehow I doubt it — the safe answer is always to guess that things tomorrow will be similar to what they are today and that change will come gradually, especially when we’re faced with a constant barrage of doomsday predictions from the newsletter nabobs. I continue to be prepared for inflation rather than deflation, and I don’t hold a lot of cash — I’m still betting that the companies I choose to own shares of will repay me for being an owner, and that most of them will be able to raise their prices as the value of money gradually decreases. And yes, I think it will continue to be gradual — an edifice that everyone in the world has a stake in, the US dollar, won’t just collapse in on itself all of a sudden, it will be taken down brick by brick by brick, steadily but orderly, especially since there isn’t anywhere else for governments to put your money. For my savings I continue to follow roughly the same strategy I wrote to you about a few months ago: a third in foreign currency CDs, a third in a “high yield” savings account, a third in gold and silver (including bullion and Sandstorm Gold shares). I continue to avoid most bonds, but because I want some debt exposure in my portfolio I do use a mutual fund to look for “value” debt offerings.

So that’s what I think — as far as my planning goes, “muddle through” continues. I’ll never make it in the economic forecasting game, but it seems to me like the most likely path is a few years of stagflation, which we’ve seen before, (I might think of that as “most likely” just because that’s the flavor of our most recent real malaise). What eventually takes us out of economic depression and low consumer confidence will almost certainly be something that no one is expecting — but in the meantime, owning companies which already have ...