I also think now is the time to be in cash. I believe the solution to this quagmire we find ourselves in, which took a long time to create, will also take a long time to unwind. It will be accomplished through a balancing act of slowly raising interest rates (to give folks time to accomodate) on the one hand and an attempt through other measures to soften the fall of real estate on the other.
I think we will have a soft landing but on a very long and slippery runway and it will seem like an eternity until we finally stop skidding. And all the while the passengers will be wondering: Are we going off the runway? Is the plane going to explode? Are we all going to die?
I once read that the folks who survive plane crashes are the ones who go over all the possible scenarios they can think in their minds of before they even take off. People who do that are prepared, people who don’t just freeze when tragedy strikes and sit in a daze for several seconds because their minds have nothing to grab onto to create a solution to the problem before them. And it’s those few seconds of non action that is their demise.
None of us knows what’s going to happen but as long as we continue to discuss as many possible scenarios as we can along with solutions, we will be prepared and will survive whatever befalls us – whether it be a crash, a hard landing or some other unknown scenario.
Whatever happens, I believe it will happen slowly at first and then pick up momentum but hopefully at some point, a trend (a way out) will emerge that we all can take advantage of. Right now there is still a lot of uncertainty in the air and where there is doubt, I say just get out (of the stock market, commodities and real estate).
Cash is king because the solution to our dilemma isn’t clear…yet. But continuing to discuss the various scenarios and rehearsing what we would do in any given situation, is the best way to survive until something clearly starts to unfold.
