“My Two Cents”
By Andy Sutton

6/2/2006

It has often been said that the only difference between an optimist and a pessimist was how they viewed a half glass of water. The optimist would say half full, the pessimist would say half empty. Therefore, we postulate. Does it really matter? Your glass is neither full nor empty. As usual, your author has found a way to trash yet another one of life's fine cliches in the never-ending quest to understand the current state of affairs.

Such is the case in the US Economy today. If you'll permit me the analogy, we've got a half glass of water. Some of the folks are telling you by the time you spend your HELOC and go for another one the glass will be fuller than when you started, the other half are telling you to dump the HELOC and the SUV and be a little more responsible before the aforementioned glass is empty.

For once (and this rarely happens) I'm going to take a middle of the road approach and suggest moderation for readers. Don't go nuts in the doomsday direction and likewise don't go all out and party like its 1929. Either way could get you in a serious amount of trouble. Personally, it is my belief that our money system is broken, corrupt and over-manipulated, but does that automatically mean the end is near? Maybe. Maybe not. One thing that has become very obvious to me over the past few years is that the manipulators are very good at what they do. They control the news, the information, the data and way the data are presented. Another thing that is obvious is that the markets react to that data in a pro forma fashion, which is to say that they buy it hook, line and sinker.

I'm sure that this does not constitute a shocking revelation to anyone. We've known this for a long time, so where am I going with it ? Moderation, that's where. No matter what your predisposition, always ask 'what if'. If you're a half full sort of person, then ask 'what if my house doesn't continue to appreciate 30%/year?" "Should I really take out another HELOC and put myself another $50K under water?" On the contrary, if you're in the half empty camp, you should say, "What if the price of gold is artificially suppressed?" "What if the manipulators can keep this thing going for another 100 years?" If you're in the middle, not matter what happens, you're going to have half good and half bad, but at least you'll be prepared.

My intuition tells me if things do go rotten, that it will happen quickly and there will be little or no time to reposition. The time to prepare is now, but in moderation.

Andy Sutton holds an MBA in Economics from Moravian College and is a member of Omicron Delta Epsilon International Honor Society in Economics.

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