Dear Friends,

The “greek debt crisis” which morphed into the European Debt Crisis gave us an insight as to what is to come in the next 3 to 5 years.

The world is awash with massive and excessive fiscal and monetary imbalances. The piper will be paid and the stresses will eventually play out across all countries. Currency turbulence, I suspect will be more pronounced.

The market wills (in the end) impose discipline on politicians and bureaucrats (i.e. Central Bankers). Do not make the mistake of assuming this is your “run of the mill” crisis. The explosion of derivatives and leverage within the system has created a much more fragile (Yes Alan, nothing was dispersed) system.

Markets and economies are dynamic. They will adjust to the new reality. The question is where will the opportunities arise? To understand the problem is to understand how to position yourself. If you think you can just “buy the market” and all is good from here, you are making a big mistake. Be much more discerning (as you should always be).

It is no co-incidence that GOLD is making all time highs during this period. The average investor still laughs when you raise the topic - oh, you are one of those guys?

Ask the question, who do you think has been buying the gold to raise the price from $260/oz(USD) 10 years ago, to the price is it today? Not joe average! Only those with serious money. Phase 2 of gold has commenced, where the legendary fund managers buy it (not gold-bugs). They can see what is coming.

The children of the bull market (ie 1980s onwards) are missing the full picture.

The system (mainly in the west) needs to be cleaned out. The only solution available to the officials is inflation! The ONLY palatable one. Debt destruction through re-structuring is not considered feasible by the politicoans and bureaucrats.

Thematically, it makes sense to own some or all of the following:

-        Gold & Precious metal shares

-        Agri-commodities

-        Energy

-        Companies with clean balance sheets and quality dividends

-        For Australian Investors quality global companies