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« Weighing the Week Ahead: The Dual Theme Continues | Main | ETF Update: Still Waiting and Employment Preview »

June 01, 2010



A good way to predict the government's response is to read Murray N. Rothbard's "Economic Depressions: Their Cause and Cure." When I read this a few years ago, I was completely shocked because everything he stated in the book was what was going in government and markets.

Austrian Theory has it all written down before it even happens.

Also, when governments release figures like this, always assume it's deflated, or inflated, and expect the worst. Don't trust government!


Fred - You are free to deploy your savings as you see fit. You can choose from a wide range of asset allocations.

You can invest in line with what you think policymakers should do -- or --

You can invest in line with what you think they will do.

That is your choice, and you have no basis for criticizing leaders or the market if you choose incorrectly.

I strongly recommend this (agnostic) perspective.

Best of luck with your investments!



Mike C -- Thanks for noting that I chose to respond to your excellent question with a general article.

It is not that I question Ray Dalio's credentials. His methods, as publicly reported, square well with what I recommend.

Having said this, I know many, many top traders. They are better at predicting the immediate market reaction (each other) than the eventual policy. That is good for a trade and a profit if your timing is right.

It may not help most individual investors.

Thanks for helping to point me in this direction.



Then it is a matter of well considered policy that interest rates remain low based on the concept that someone else deserves the benefit of my savings more than I do.

Who am I to complain like some whiny little Austrian economist?

Mike C

Thanks for addressing my question. This was an excellent post.

If you are correct on monetary policy and fiscal policy going forward, and you have me convinced, that is very bullish for gold.

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