Aggregated Awareness

From Casey Research's Dave Galland comes this thought provoking essay on the temerity of 'the mob' and their latest fixation with 'safe haven' US Treasuries and the likelihood of how this preference will come back to bite them when reality is further revealed over time.

Galland uses the analogy of the S.S. Morrow Castle, the so called 'safe party boat' used to ferry passengers between Florida & Havana in the 1930's, and it's subsequent destruction under heavy seas, and the situation within the current markets, whereby 'investors' are preferring 'safe haven' US Treasuries perhaps under false illusion.

Excerpt: "...With the blaze rapidly spreading, the replacement captain gave the command to abandon ship, but as there had been no lifeboat drills, the scene quickly descended into chaos and death that ended several hours later with the burned-out hulk washing ashore… turning the floating party palace into the ruined remains seen in the photo here, in the proverbial blink of an eye.

The story resonated with me on a number of levels, but first and foremost as a cautionary tale that even when everyone agrees that something is “safe,” events can quickly prove otherwise.

For example, in the current economic context, U.S. Treasuries are considered the safest of harbors for storm-weary investors. But that assumption contains within it the further expectation that the status quo will prevail – that, proverbially speaking, no captains will drop dead, or drunken passengers will set a fire by playing a truly mindless parlor game. Further, should such unexpected events occur, a widespread belief holds that the water pressure will be there when needed, and that the power won’t cut out at the worst possible moment..."

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