If you’ve been a fan of the Slog’s Predictorometer in recent months, then hopefully you’re not too depressed by events. Although Gold keeps yo-yoing up and down with events, and the Sterling/Euro thing has been a tad scary at times, things have pretty much panned out as advertised here.

Thanks to Monsieur Trichet’s spinal atrophy, I’d say currency trading opinion leaders (the sensible few) are now 95% certain that the Euro is heading south for the foreseeable future; and the Pound is climbing quite nicely against it – up a whole cent today. Equally, while daily fluctuations remain a factor, the age-old ‘deficit madness = gold soaring’ equation has proved as sound as ever. The last time I looked, the shiny stuff was back up at $1175 an ounce.

People sometimes find the markets giving contradictory signals. Bourses do this because most of those trading on them are knee-jerkers responding to every signal from the verges – as opposed to the smart few with binoculars trained on the road ahead. But at vital moments in history, even what Joe Kennedy used to call ‘the saps’ can see the twister on the horizon…and this is one of those moments.

The major markets have been busy regaining lost ground since mid 2009, but all along one has felt – as one trader in San Francisco told me late last year – “the whole thing’s kinda running on faith”. The serious money is, however, looking at this as a lengthy holding period during which time the game plan is to look further afield – and accept that the goals have changed.

The decision of PIMCO to eschew European sovereign debt, for example, shows not only caution but also an understanding of how emerging countries can perhaps be trusted more than previously. My own view is that the big lenders are overestimating the amount of trust they can bestow, but you can’t fault the foresight. Far more significant is their withdrawal from Western sovereign lending, because this shows a clear awareness that the old rules are gone forever.

In a holding period, what does a ‘necessity’ investor do? My definition of a necessity investor is one like me who would prefer not to be bothered with any of this crap, but is just too much of a worrier to leave it all to crooked institutions and uninspired fund managers. Certainly, we can’t chase rates, because there aren’t any – at least, not yet. This is an epoch in which we can’t make hay, because the only weather variations are between snow, sleet and rain. Rather, it’s a period of history when defence of what you’ve got is more important than getting rich….and infinitely safer.

The change is primarily one from economic investment in commerce and institutional income derived from capital, to spotting potential capital gains likely to accrue from macro-trends. I apologise if that sounds up itself: the Sun headline is we should distrust Governments and banks, and instead watch commodities, currencies and politics.

It may sound very little different from going down to the betting shop and having a punt; but whereas nags defy form and jockeys fall off, what I’m doing is considerably more scientific. The main science involved is social anthropology, and the other disciplines involved include history, statistics, government studies, commonsense and bladder contents.

My main weapon is caution – taking a weakness with which I was born, and using it as a strength. The downside of listening to The Slog is that I tend to call things too early. The upside is that, in the long run, people like me prosper more slowly, but tend to avoid being caught out by winter. It’s a grasshopper/squirrel thing.