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Tuesday, October 19, 2010

In Sync with Gary of Smart Money Tracker

I have been following Gary of the Smart Money tracker for quite a while. Since August, I have been in 100% agreement with his private newsletter. I strongly recommend everyone subscribe.

In any event, I posted late August Ditto Head, basically announcing that from that point forward, I am a Gary convert. Last week I posted I'd likely sell on Friday, in expectation of a gold pullback, and I did sell. Today was the day gold started correcting.

I am also in agreement with Gary on how this is going to play out. The markets will fall as the dollar rises. If the government was to behave itself, my friend John would be correct, the dollar would be best place to invest. I am in the camp with Gary, Bernanke will not sit on his hands and allow the markets to behave as they should.

Instead he and the US government are going to meddle in something they have no business meddling in. I have no idea what form that will take, maybe as discussed "QE 2", or some other program to basically destroy the US dollar's value.

And this is the heart of where I believe all of this speculation on US dollar future value. The question is, will people change the law, ignore the law, and or actively gain support to destroy the US dollar. In the world I live in, this most certainly can and will happen.

I have ZERO faith that those who have brought us here will change the behavior that they have since college. It is a RELIGION to Mr. Bernanke that he is right, based upon NON-THINKING, one dimensional, belief system. Therefore he and others that support him will continue to operate on that one dimensional path until outside forces physically stop them.

An interesting excerpt from Wikipedia on Bernanke:
The Bernankes have two children. They refinanced their Capitol Hill home in late 2009 because they "had an adjustable-rate mortgage and it exploded." Now they have a 30-year fixed rate mortgage at a rate of a little over 5%. Bernanke and his wife own one car, a Ford Focus.[24]
This to me shows he is an academic and not a realist. And quite possibly by changing to a fixed rate recently, maybe he now HAS a clue on what he is going to do to us and the world. But I digress.......

Therefore to change course it is quite likely we must have an all out US dollar crisis. He is not capable of material change to alter course. (click to read)

I don't blame Bernanke. He is a person who's destiny in life is to speak keynsian economics. It's like blaming the pope for worshiping a false god. It isn't reasonable to expect anything different than their life's work.

Of course, with all my negative view of what we have in store for us, I can't say there is NO chance to change course. It is quite possible that this time, the Federal Reserve Bank won't take us and the world down to the next level into the abyss. I do mean it, it is possible they will stop themselves.

But I must keep my opinion based on fact. The fact is Bernanke has had one mode of operation, started by Greenspan in the 1980's. That is loose economic policy and abuse the US dollar as status of world currency. This is not a crisis that has been built since 2008, this has been in effect since 1987 when Alan Greenspan took office.

And until I see a new side if Bernanke, I must do what is logical, assume the same approach as what has been taken since 1987. To do what they know, and not what is right.

Gold chart below, I am not worried until Gold crosses below 112. If it goes that low, I am willing to rethink my opinion. And no matter what your view, place some sort of warning level that you promise yourself, if it crosses that threshold, you too will re-examine your opinion.

God help us all if I am right, and god help my son and the future generation. We will owe them a big apology.

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