Sean’s Rant

I just talked about this here, but I want to go over one portion of what Buffett said again. He said that there is a guarantee of inflation. There is not a guarantee of the economy turning around soon, although he is betting long term. So here’s my play and why I picked the investment class ratios I did. 

If the economy continues to go down and the market goes down, the equity play is a big loss in the mid term (6 months – year), and could leave inflation or deflation. In the case of either it is always followed by inflation especially with all of the moved by the FED recently. In this scenario, Gold, and Silver are safe (short term unrealized loss in the case of deflation, or buy more). This results in a gain in the mid term after the inflation kicks in. 

If the economy goes up and the market with it, equities win and may outpace Gold & Silver. But the risk is much higher because there is still the bet on the economy. The inflation still occurs and the Gold & Silver still go up. So this is why I maintain that the majority of my portfolio will be best placed in Gold & Silver, and today is a great day to do just that. But if you notice I still have a bit placed in equities and thats because I think there are still some good buys, like Google was yesterday.

Related posts:

1. I’ve said it before and I’ll say it again. The decline still isn’t over and heres why I’m short the DJIA.
2. Mark To Market accounting Relaxed…has anything really changed?
3. China finally declares that the US should no longer be the reserve currency of the world
4. Crude Oil and Housing