Despite appearances to the contrary, we at Normandy are deadly serious about what we do. Whether it’s the trades we recommend – which are regularly winners, or our commentary on matters financial, political and social, our research team is constantly digging to discover the latest trends and translate them into the highest quality actionable advice in the newsletter universe.
And we believe we’ve had a modicum of success in that endeavor.
We also, of course, aim to entertain. And in that, too, we’ve had a good run of success, at least according to the feedback we get from you, our dear readers.
That said, we’re going to take something of a less humorous path today.
We want to discuss an issue that requires immediate understanding and, perhaps, some prompt action, too.
For we believe it’s time to prepare.
Prepare? Prepare for what?
Quite simply, for war.
Granted, it’s not a nice thing to say, and we’re certain there are many who are already pooh-poohing the very mention of it, but the time has come, we say, to lay it on the line, regardless of the name-calling that may ensue.
What effect this will have on markets, we’ll get to in a moment. For now, we want to focus on the effects it will engender in our own day-to-day lives.
Let’s begin by saying that what happens in this war will be anything but conventional. Some things you should be prepared for are –
• A loss of power
The electricity grid is a key target of the enemy, and it’s most likely that we’ll see a great many attempts to upend it at various locations across the land. It’s also impractical to defend against an act of local sabotage. So, too, are oil and gas pipelines at risk, as they, too, are indefensible along their entire length and breadth.
• A loss of communications
As the infrastructure takes a hit, look for cell phones to become obsolete and land lines and internet connections to become very difficult to maintain.
• A loss of sanity/civility
Problems communicating make for trouble among a populace overly dependent upon texting, etc. Additional anxiety arises when the general order of life is disrupted. Expect panic, local rioting and a general short-temperedness among all you encounter.
• A loss of supplies (supply lines)
As communications become problematic, so, too, will supply lines suffer – particularly in cities and other locales where a breakdown of the civil order occurs.
• A loss of policing
Look for the blue to be less interested in dealing with anything ‘minor’ in their estimation and to be come, eventually, a political force of their own.
This is by no means an exhaustive list, but it’s also neither naïve nor hysterical. In our view, the majority of high-density population centers will experience some level of breakdown, and we therefore urge all who can to begin their preparations in the coming months.
No one said, “War”
There will be no declaration of war here, friends. Indeed, the game will involve avoiding any such declarations and encouraging everyone that what’s happening is but a passing phenomenon and needn’t be fretted over. The authorities, you’ll be informed, are in control of the matter, and all offending parties will be caught and prosecuted to the full extent of the law.
But reality won’t be like that.
The enemy’s goal is first to create panic and disorder and then exploit that chaos to act freely in a more deadly manner. The process will begin slowly and gather steam. And like the proverbial boiling frog, count on very few noticing before it’s too late.
What to Do?
The most important strategic consideration at this stage is to be part of a broader organized collective. Everyone will have to do his personal share to be prepared with food, water, some means of defense, spare fuel, etc., but organization is crucial.
How to do it? Try showing this letter to family or friends, like-minded neighbors or parishioners, and get talking.
We’ll continue to update you with details and strategies in upcoming letters, but for now, get organized. It may save you in the end.
By the way, it’s unlikely we’ll see foreign troops on our soil (Canadians!? Oh, no! Look out!). But it won’t take an army to pull off what a few dedicated and well-trained terror plotters are capable of.
And the markets?
We’re well aware of the most recent declines in the indexes, but we’re not alarmed.
Have a look at a weekly chart of the Dow –
As you can see, it’s been close to three and a half years since the Dow touched her 137-week moving average (red circles). The bull is not over – there’s still too much cash available that has yet to flow into equities. But it wouldn’t be surprising to a see a dip to 15,500 at this stage. RSI looks like it’s ready to go under, too (blue box).
The Pause that Refereshes!
All interested should consider buying some very cheap, deep-out-of-the-money speculative PUTs using the SPDR Dow Jones Industrial Average ETF (NYSE:DIA).
Give it a few months to play out.
Many happy returns,
Matt McAbby, Senior Analyst, Normandy Research