I DO believe we’re closer to the “end of the end” for all of the gloom and doom, and that opportunties will become massive for those willing to venture out into the cold in search for them. However, there still continue to be major risks and a lot of unknowns still to surface that could move the markets and sentiment much further into the abyss than they are now. I’m spending Halloween this year in Vancouver with my wife Raylene, and our son Cooper who’s growing like crazy. We’re here primarily because of a huge surprise I sprung on Raylene – front row tickets to the Madonna concert that was in town last night. It was an incredible show, and while I can’t say going to a Madonna concert ranks on my personal top 10 list of things I wanted to do before I died, I have to admit it was fun — and definitely achieved one of Raylene’s top 10 things, which for me, is almost as good as achieving one of my own. In any case, Halloween seems an appropriate day to viewing the world economy because it really is scary out there. A lot of theories about where we’re headed are floating around. Some say we’re about to embark on a huge rally and growth spurt, while others are calling for the collapse of the U.S. dollar, and a new currency to be brought in. There is still a great deal of irrationality in the markets right now, witnessed by some of the disconnections of usual activity. For example, my business partner Kourosh and I have recently been in the process of acquiring physical gold (primarily as insurance against hyper-inflation and potential unexepected events in the markets) and it has been a huge chore – because it’s almost impossible to get your hands on physical gold right now. The demand is simply outstripping supply. However, we’re still seeing the price of gold fall — and this doesn’t make much sense. How can something that’s almost impossible to buy go down in price? Well, I do believe this is a temporary phenomenon, in part brought on by the U.S. dollar’s current strength. I believe that will be short-lived, and the US dollar will dive going into 2009. As this happens, I expect gold’s place in the economic chain will right itself, and we’ll see gold go into the $1,500 range and beyond. I think there’s some manipulation in the market, and there are forces at work right now in the crisis that we’re not aware of, and that have not presented themselves — almost like devilish ghouls, working behind the scenes to cause fear and suffering among investors. There continue to be a lot of BAD decisions being made by investors, making foolish decisions based purely on emotion and panic. I remain steadfast that in today’s world, the best place you can be is in CASH — mostly, because it’s hard to lose it when it’s in a cash position. Yes, inflation takes a toll, but inflation is NOT our enemy right now. It is the destruction of capital and net worth that occurs when you hold assets that plummet in value. Being in cash is not a LONG term strategy, but only in the short term – in the next couple or few months. I think we’ll see a short-term period of deflation, followed by significant inflation starting in early-to-mid 2009. In deflationary times, cash gains value and that’s why I believe it’s a reasonable strategy until more rationality makes its way into the markets. What I see as good signs is that the massive swings in the market are becoming less common on a daily basis, and there appears to be a little more order taking hold of the markets. However, I want to see more consistent stability before we can begin to believe that the worst is behind us. Hopefully, with the passing of Halloween, some of these fearful enemies will sink back into the night and allow us to return to a world where economic fundmentals actually mean something! So Happy Halloween, and don’t let the market ghouls gore you!]]>