Dennis Gartman’s Latest Outlook: Bearish on Gold, and More

Dennis Gartman’s Latest Outlook: Bearish on Gold, and More

It’s been a little bit since we checked in on what Dennis Gartman has to say about the economy and markets – so let’s get his outlook.

Here’s a 5 minute CNBC clip of Gartman weighing in on the taxation policies in Europe and the US.  He subscribes to Art Laffer’s supply side tax theory that lower taxes lead to higher tax revenues.  Hence, he doesn’t like the European decision to raise taxes one bit:

Tough to argue with a guy clamoring for lower taxes.  Though I subscribe to the Murray Rothbard school of thought that public sector spending should also be minimized (in tandem with taxation), if not eliminated altogether, for optimal economic growth.  But that’s a libertarian discussion for another day :).

Also Gartman’s weighed in on gold recently – and he’s no longer a bull.  Just a few weeks after calling for a “parabolic rise” in the barbaric relic, Gartman is changing his stance – Benzinga reports:

Dennis Gartman said on CNBC’s Fast Money that he made a bad call when he said that gold is going to make a parabolic move higher.

He explained that gold is making new lows, and the up trend looks like it’s broken. Gold is also falling relatively to euro and British pound. He added that it looks like the game has changed and people are worried about deflation. Inflation is not an issue any more, and there are signs of the slowing of the economy and the non-growth of the monetary base.

I’ve subscribed to The Gartman Letter on a couple of previous occasions.  I very much enjoy his writing and trading insights – but you can also get turned around with the frequency with which he’ll change his positions and stances.  It is the hallmark of a good trader though – having the mental flexibility and openness to turn on a dime if the facts change.

I agree with Gartman that inflation is no longer an issue – in fact, in my opinion, it’s never been an issue at all.  The M1 multiplier is in the tank.  CPI prices are languishing, and heading lower – and that’s from a trailing indicator to boot.

More deflation jollies:

Finally, here’s a parting Gartman shot for you – on the latest earnings season, he says “buy stuff that, if you dropped it on your foot, it would hurt.”  He thinks China may slow, but doesn’t think it will slow by that much.