Connelly says the safest place for assets right now is American corporations with strong balance sheets.

Gold remains attractive because it provides an alternative currency to the yen, euro and dollar. "Gold cannot be printed by a central bank," he says.

Emerging market stocks, particularly in East European companies, are attractive to Connelly. He says Eastern European governments "took their medicine." Austere spending policies recommended by the International Monetary Fund are working.

Muni bonds also provide unexpected value to advisors with good credit analysts. Bonds backed by fiscally responsible state or local governments, or their agencies, offer safety and yield. "It could be a county or a school district," he says.

Connelly says an issuer that is managed responsibly and can pay its debt with some cushion is attractive. If a muni bond shopper evaluates the underlying economy backing an issuer and examines the issuer's revenue coverage and expenses, he can find bargains-because in these troubled times, all muni issuers are being tarred with the same brush.

Connelly, incidentally, neither seeks the limelight nor is comfortable in it. At least three times during a 45-minute call, he recommended others who know much more. Indeed, experts in munis, economic policy and the European Union can be found. But Connelly is great at the worldview-understanding the overall picture and the most likely outcomes.

He says he's not sure what to do about Europe. He thinks Greece is sure to default; it's just a matter of when. Greece, Portugal and Ireland might need to be tossed from the European Union to keep it solvent. Since the Italian government in mid-August passed serious spending cuts, the Spaniards must make a similar effort, and then the EU can close ranks.
Connelly doubts European prospects without this level of commitment, discipline and action. The Italians and Spanish guarantee more than 30% of the recently adopted lending facility currently in place. "That's like lashing the Andrea Doria to the Titanic," he says.

Chris Petruzzi says the Fed and Treasury Department action during the crescendo of the September 2008 crisis altered the course of history by saving the giant banks. "If Obama and Bernanke would have done nothing, a lot of people would have lost their homes," says Petruzzi. "But after a year, it would have been over. We would have hit bottom in 2009 if they had done nothing."

Petruzzi says the economic model described by the Austrian school fits these times well. "The Austrian model begins with monetary authorities making interest rates too low, and investments get made that should not be made, says Petruzzi. "The resulting recession or depression is the correction that sets the economy straight.

"We made interest rates too low, buildings were built that should never have been," he says. "The problem is we stopped the correction from coming."