August 18, 2008 -- balance, change -- I've been writing Dow Theory Letters continuously (without ever taking so much as a one-week vacation) for 50 years. Over the last nine years, I've been writing on the Internet every week-day. Recently, I've had the feeling that I can't keep this up, that I've allowed my business to take over my life.
Then last Friday, a frightening incident occurred that is forcing me to make some changes. I was talking to the women at my office, and suddenly I couldn't talk, my words were slurring. I was frightened and frustrated, this had never happened before. They were also frightened, "What's happening to you?" they asked. I suddenly realized that something was drastically wrong. I called Faye, my wife. She listened to what I told her and immediately called 911. A few minutes later an ambulance arrived and a crew of paramedics came into the house, heard the story and immediately realized that I was having a minor stroke.
They put me on a gurney and drove me to the hospital. I went through a series of tests, an MRI, cat-scan, numerous sonograms, interviews with two neurologists and my "hospitalist." The neurologists told me that I had had a series of TIAs, Transient Ischemic Attacks, mini-strokes. The hospitalist, a former New Yorker, advised me to seek balance in my life, and he prescribed a number of drugs that I should be on to try to get some of my cholesterol factors under better control. My physical balance is impaired. I may have to walk with a cane until my balance gets better.
Later I realized that I may have done this to myself, in order to give me an excuse to change my life. The doctor told me that if I didn't change my life-schedule, reduce my stress and bring better work-life balance into my daily routine, I was headed for certain disaster. That decided me. The mini-strokes gave me the urgent reason (excuse) to change my life (even though I hate to look like "an old guy"). I took the whole incident as a message from above.
Here's what I have decided I must do. I can't keep writing my daily sites every day. It's too much for me. The strain of daily writing is wrecking my brain. My body is revolting via the mini-strokes. From now on I will write only when the actual markets are telling me that it's time to write; up to now I've been telling myself that every day was time to write, regardless of what the market was doing. My goal is to write a full site only every other week.
To give you a hint of what I think the combined markets are now telling us -- I believe we are on the eve of world deflation. I pulled out a headline from the August 5 Wall Street Journal headline -- "INFLATION PACE IS FASTEST IN 17 YEARS."
Forget it, this is history -- this is not what's happening in the market. From what I see, the markets are telling us to prepare for hard times, and a global spate of the worst deflation to be seen in generations. This is why gold has been sinking, this is why stocks have been falling -- big money, sophisticated money, is cashing out, raising cash, preparing for world deflation. This is probably why Lowry's Selling Pressure stays at its high, smart money is selling into the stock market, day after day. They're raising cash in preparation for the hard times when deflation is in the saddle. Deflation is ushering in the new strong dollar. Big money sees deflation and the lower rates that go with deflation. Look, if you have five million dollars and you are only receiving 2% in interest on your money, that's only an income of hundred thousand dollars on your five million. Big money realizes that in a deflation you need a mountain of cash to keep up your lifestyle.
What I see is a coming world deflation, and I believe that's the message the markets are sending. What's the best stance in a deflationary situation? Lots of cash, and safe, solid, investments. Two areas that fit that requirement -- US dollars and US Treasury paper. What happens to stocks during deflationary times? They're sold to raise cash. What happens to business in deflationary times? It's crushed by ever-lower prices. What happens to the average citizen who's loaded with debt during deflationary times? They're battered unmercifully, as income buys less and less and as debt crushes them. What happens to assets during deflationary times? They're worth less and less and their sale brings in fewer and fewer dollars. Isn't the price of gold and oil already telling us that?
I just finished reading The New York Times, Los Angeles Times and Barron's and there isn't a hint of what I'm writing about above in any of these publications. Unfortunately, these coming deflationary times will come as a complete surprise to most people.
So to summarize -- instead of my daily sites which have dealt with the daily action of the market, the above is the sort of thing I'll be writing about every two weeks, bigger trends that will affect your life and investments. Please don't expect any postings on a daily basis -- I'll try to put something on this website around August 29. I also will plan to post my PTI readings every Friday.
I plan to take the next several weeks healing and recovering from this traumatic incident. In the interim, I won't be able to respond to any emails or phone messages even though I'll be sure to read all e-mails carefully. I hope all my subscribers will understand.
