Praise for the Commentariat

The global financial crisis is throwing up some wonderful material from what I like to call the market commentariat - those whose job is to pronounce on the market's movements and advise on what investors should do about it. We are living through a quite remarkable period in financial history, and it is good to see that some commentators are up to the enormity of the issues involved.

Here are three examples that have caught my eye in the last few days.

First up is Don Coxe, now thankfully back in action after a short interregnum with his monthly commentary Basic Points (always required reading). He quotes Robert Reich, Clinton’s Labour Secretary, "one of the nation’s smartest liberals", who described President Obama's stimulus plan with characteristic clarity: “Obama has repealed the Reagan Revolution”. And then added this tart comment: "Problem: the Reagan Revolution was the best thing that has happened to equity investors since World War II”.

"The long Reagan boom that came after the last Mama Bear market so energised the markets and the economy that the S&P trebled in five years, and laid the foundations for 900% returns over fifteen years. We shall not see its like again. The entrepreneurial spirit that Reagan praised and unleashed with tax cuts and deregulation is now the object of Obama's obloquy and Obama's program of huge tax boosts, denial of secret ballots in union organisational efforts and massive costs to fight global warming argue for, not a Thatcherite, but at best a Belgian economic recovery".

Don's current investment conclusions can be summed up like this:

• Gold as a core holding;
• Canadian and Australian dollars for choice amongst currencies;
• Fertiliser, seed and farm equipment stocks by mid-year (watch out for the continuing absence of sunspots, a key Coxe theory to justify investing in grains);
• The debt of good companies rather than the equity (at least for now).

"A wondrous buying opportunity" may emerge in stocks if the S&P 500 index breaks down heavily again, which he seems to think is the most likely outcome.

Someone also passed on to me this concise summary, from the same side of the political spectrum, of comments made by the veteran natural resources investor Doug Casey at a recent conference:

"The US is going to default on its debt through inflation. Obama has a really high IQ but is unable to foresee the consequences of his actions. 9 trillion dollars deficit divided by 300 million, that's about $30,000 per person and all that money is directed to the State. Government is the Predator and you are the Prey. Yes, I pay taxes in this country but it is for the same reason that I give my wallet to the average mugger at gunpoint".

Finally I also enjoyed an excoriating attack on Gordon Brown in The Times of London by Matthew Parris, a onetime centrist Tory MP turned pundit. It is impossible to underestimate the extent of the mess to which policymakers and bankers in harness have brought the UK. George Soros says it is possible we may end up in the arms of the IMF once more, as we did in 1976. Exaggerated? Perhaps -but not, I fear, impossible.