Is it a U or a V or a W or what?  That is the question being debated across the country and particularly on Wall Street and in Washington.  You hear terms like "green shoots" and "mustard seeds" of good things to come and if you dissect the data being released, you can indeed find a piece of good news here and there mixed in with the awful.  So, which is it?

I am starting to get emails from friends asking me if I am still as negative on the economy as I have been.  After all, there are those green shoots like improved business purchasing of capital equipment in the last quarter of 2009 and a slowing of job losses.  Aren't these things auguring good things to come they ask me hopefully?

Here is what I see; look at the credit markets.  They are just humming along and look fully repaired.  So, doesn't this presage a recovery?  Well, maybe, but what I see is the smart money meaning those guys who don't give interviews but bet with their money moving to safe vehicles and hedges getting ready for the next disaster.  Oh sure, Greece has averted crisis and Ireland is moving toward austerity and the United States is having no trouble selling its bonds but that is pretty much how things looked in 2003-2006, while the forces of disaster lined up.  And I think that the next drop will be worse than the last, because of the despair that will result from this stimulus globally failing.  In 2008 there was a classic strategy of printing money and priming credit markets coupled with government stimulus.  What happens when all of that fails?

Look, I am a happy guy and a natural optimist but I'm not a fool.  Things now are just a mirage.

The worst is yet to come and so you have two choices; live on hope or make smart moves now to protect yourself.  Hope is not a strategy but it is how fools operate.  You need to build cash and convert it to gold and silver, ignore debt and push it off or discharge it, secure your job and if that looks shaky make plans to augment your income through a second job or starting a home business, and move any investments you now have out of dollars and into either stronger currencies like the Australian or Canadian dollar or gold and silver or preferably all three.  Don't be fooled.