All Is Still Not Right

Aug. 18 2008 Hans Lysglimt
Let us hope and pray that the Georgia situation does not escalate. The Russians are sending new signals, this seems to surprise the West. It should not be surprising, Russia is doing what is best for Russia. It seems many in the West have illusions about Russia behaving they way the west want it to behave, and not as it it self perceives as it’s own best interest. We have have warned repeatedly about Russia, one should keep arm lengths distance to it. We where against letting Poland and the other former soviet satellite states into NATO. It seemed like a free ride at the moment it happened, but that was because Russia was temporarily down. Any student of history will instinctively know that the trouble in Poland has not ended forever. Tanks will again roll over the fertile plains of Poland, heading west or heading right. This is only a matter of time. The smart move now would be to somehow soften the absolute defense pledge of NATO, something that will de facto be clear once the next round of serious trouble begins, whenever that is.

Apple has overtaken Google in market cap. We don’t share the public enthusiasm about either company. Having lived in the Bay Area ourselves we know first hand the liberal “Democrat” environment in that area, it is basically unsound. Google is to powerful, it knows way to much about us, it needs more sound critical analysis and views. Apple is not what it seems, Steve Jobs casual look is so carefully manicured in every minute detail that calling it casual is  a gross misrepresentation. This attitude wears off to the entire company. The biggest problem with Apple is having Al Gore on the board, a lier, cheater and worse.
We think Google is a bubble, that will blow in due time. Apple overtaking it leads us to think Apple bubble as well. The combination of Google and Apple gives us the shills and the creeps, 1984 anyone?

We keep looking for good news. And we do find some. The Olympics are not everywhere, you can actually avoid it quite easily. The Olympics means nothing, and should therefore be treated as such. The Olympics seems to get less total absorbing attention that it got when I was younger. This is probably because we can choose out media. This can be only good. The Olympics is part of the bread and circus spectacle the global governments need to put people in place.

London real estate prices are plunging. People are being fired. This should come as a multiple strike blow to many in the city who have bought apartments with no money down. First you loose your 150 000 pound job, along goes the 200 000 pound bonus, become the badmouthed scapegoat among the rest of people at the company, then your 1.3 million pound apartment falls 20%, interest rates pop up on the loan, your AmEx platinum is withdrawn, your 200 000 pound savings in the stock market falls 30% and to top it off your equally hardworking finance and heiress to be gets downsized, leaves you and moves out. Before you know it you have a real setback from where you thought you “where” 12 months ago.

Who is to blame? As our good friend Henrik Alexandersson points out, “There is no plan” (it is in Swedish, highly recommended for anyone who can read Swedish). There is no conspiracy, you can only blame yourself. Educate yourself in Austrian Economics and take protective measures, it is the only way to be on top. Or just ride the waves as they take you.

We have told you to sit in cash since November 2007. To sell it all, stock, apartment, it all. Where has this lead you? You do not have any more money than you did, you sit in cash, but your cash will buy you more capital goods now and even more going forward. So you are ahead. But inflation is on the rise, so your savings will be eaten up. At some time you will need to reenter into capital goods and investment, just not now.

The dollar has risen 10% since the bottom, a remarkable dollar rally. As we have told you to sit in diversified cash you will have had some dollars, and profited from that. Diversification pays.

Stay in cash.
Sit tight.
Educate yourself.

Until tomorrow.
August 18. 2008
Hans Lysglimt, Oslo Norway.

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