“You take the blue pill… the story ends, you wake up in your bed and believe whatever you want to believe. You take the red pill… you stay in Wonderland, and I show you how deep the rabbit hole goes.” -Morpheus
A ‘blended’ orientation to markets and life…
I took a red pill, dropped into a rabbit hole and entered Wonderland in 2003 and lived down that hole for 2 years before I decided, ‘eh… not for me’. Paranoia 24/7 while trying to raise kids and keep a healthy marriage was not the way to go (though positives like an understanding of the value of gold, real gold, alternative heating sources (wood stoves), a generator and the means for the physical protection of my family came out of that phase.
Then, very much against the grain of my nature, I took a blue pill to take the edge off of my consciousness about what’s really going on out there in the monetary policy world. This allowed me to function well in the normal world that most people inhabit. You know, it’s okay to have a few friends and not be the guy grossing everyone out at cocktail parties (trick wording, I avoid cocktail parties, whatever those are, like a plague).
But a funny thing happened with the mixed pills; I actually retained the capacity to see (and factor) certain alarming items that I consider to a degree that they are an existential threat to the markets, the economy and by painful extension, society in general. This synthesized pill actually helps me be a better tin foil hate wearing lunatic, a better everyday citizen, and certainly a better investor/risk manager. The mixed pill is purple.
The blue pill helped me function within a society that, to overwhelming degree, is still asleep. The public wakes up in its comfy bed every morning, argues with itself about one morally bankrupt political party vs. the other, and to the degree it invests, depends on its certified financial adviser to do the dirty work of understanding complex and officially manipulated (or regulated, if you will) markets.
Well, some people near and dear to me are under the care of such advisers and it causes me a lot of concern when I observe how much these financial guides don’t know. Proof you ask? Well, look over the financial adviser herd’s traditional all-weather allocation of 60% stocks, 40% bonds and effectively, ZERO% cash. How’s that worked out in 2022, boyz and girlz? If they retreated 100% to the ‘safety’ of ‘risk off’ bonds, it’s been just as bad.
But there were simple ways to sit out 2022’s pain if you’d bothered to look for them. They became apparent to those of us who’d projected what the bond market was telling the Fed and how said manipulative, err, regulatory agency would react.
The point being, if you don’t go full frontal tin foil lunatic (e.g. Gary circa 2003-2004) or fall totally asleep again, you can have the red pill’s benefits and the blue pills benefits all at once. You can be an adult and realize that there are grave problems with not only the US, but the entire global macro. But also that time is an old man that does not lend itself conveniently to this dogma or that. For example, today is a time of pain but for an extended period from mid-2020 it was a time of gain. Why not participate in both times.
For example, had one been tied up by personal (or worse, some promoter’s) dogma and been ‘invested’ in ‘paper’ gold/silver or gold stocks they would not be ready today to capitalize on what I think is directly ahead, which is a big opportunity to buy not just a quick trade, but a longer phase of rising prices in the PM complex, if not a new bull market. As to the latter, a lot will depend on the state of the cyclical world per analysis that is beyond the scope of this article. Meanwhile, it is time to be effectively managing – or trying to manage – a dynamic macro with some pretty intense contrarian aspects in play.
While I’ve been blocked and/or contended with on Twitter by various promoters and dogmatists pumping single minded ideology, I have not lost any of the critical fundamental views that were birthed and nurtured in the rabbit hole. There is something wrong out there. But for decades now policy makers have been trying to paper it over with new and expanding debt. If you are beholden to your red pill only, you may turn out to be right… posthumously. I prefer being right and still breathing. If you are hopped on a pure blue pill well, you are the majority and I would not want to be you.
Consider checking dogma at the door in favor of a rational, sound and sober approach. It’s known as risk management in service to opportunity.
The idea for this article came after I responded to someone on Twitter, thusly…
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