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Friday, December 30, 2011

2011 Prediction round up

A fun tradition I have on this blog is making annual predictions and reviewing the outcome.  I say fun guessing  the timeline of reality unfolding does seem to be much more chaotic than I ever though possible.  It is impossible to predict the extreme ways people will delay reality.

Original post 2011 predictions
2 Fail, 6 score, 2 partial score

2011 Predictions

1) Entering 2012, the public won't look at state and township bonds the same as they do today.
The State and City budget crises are here and now. We cannot get into 2012 without some precedents being set. Due to courts and the kick the can, we will have cities and states entering into bankruptcy-type scenarios but likely not resolved in 2011. The exact prediction is multiple cities and states will enter into financial heart-attack type crisis mode. The Municipal bonds will be in turmoil. Due to kick the can, I don't know if the federal government will step in and back everything or let this play out as it must. Because of these crisis, government unions will get attacked on multiple fronts.
Fail - Can kicked.  We have the largest failure in US history unfolding right now, but the crisis in state and towns did not happen in 2011.

2) European Union will enter into crisis mode in 2011. 
The world of international finance smells blood in the water, and they are biting at Ireland, Greece, and eventually Spain. The European union will have to face an all in by Germany and others to stop their collapse in 2011. This of course, will not work. But in 2011, we will have our answer if there is one more big kick the can attempt or not. I don't think the European union will fold in 2011. and the euro will stay in tact. The main reasoning is, there is plenty of options for more can kicking.
SCORE!  2011 played out to a T on above. 

3) China will have some turmoil beyond what is expected.
China's policy of currency manipulation and not allowing their fiat currency to float is already backfiring. This policy allows America to do whatever they want, and China has to buy US debt. The severe inflation pressures China is already facing is starting a put-out-the-fire game, where new fires pop up as the central China planners try to put out old ones. I don't think China will melt down in 2011.
Again, plenty of room to kick the can for them also. The stage will be set in 2011 for the main event in 2012-2013. Prediction: The world view of China as leader into the next decade will get tarnished in 2011 as their massive fraud creates havoc for their financial bubble.
SCORE! China is imploding, and setting the stage for change OR more troubles in 2012-2013.

4) Canada, Australia, and other countries that avoided a real estate blow out in 2008-2009 will now get their turn.
The cracks are already forming. The world will learn that Canada is not different, and is more like other western countries for financial fraud and reckless loans. Australia and Canada will enter 2012 joining the western world financial turmoil, and lose their status as "better than the rest". At least one major bank in each country will have a crisis moment, resulting in their governments following America in socializing the private debt with public debt.
Partial SCORE!  Australia property is bursting along with economy.  Canada hasn't shown clear bursting, but does have clear bubble!

5) Gold, oil, and other resources will see unbelievable turmoil in prices in 2011.The price volatility will be amazing to look back this time next year. Individual commodities will get insane spikes as crisis occurs.
I actually have zero prediction if gold will end higher into 2012. By end of 2012, gold will be significantly higher. But since this is a 2011 prediction, I am going with higher, but I won't say 100% or 1%. The politics of 2011 will determine that.
SCORE!  Look at copper, corn and other commodities, bubbles blown and burst.  Gold started 2011 at about 1350 and is now around 1580

6) Food riots in certain countries will occur in 2011. 
As resource prices destabilize, there will be civil unrest as the masses barely able to keep up with their bills have problems buying basic resources such as food and energy. Again, no global apocalyptic predictions. Just setting the stage for 2012-2013 with destabilization.

7) US bond rates stay within tolerance in 2011 as a guess, but if not all bets are off.
If US bond rates break out of the range established since Volcker in the mid 80's all bets are off. Once the US government loses control of it's credit worthiness, the entire shebang is thrown in the air. Anyone who knows how the politics will play out is fooling themselves or you. 2011 will be defined by the ability for the US government to keep its debt rating in this channel. Click here to view. The optimism comes into play as other countries have issues, making the US situation look less-bad.
SCORE! - US bond rates did heat up a little, but collapsed second half of the year.

8) The best place to be, all things considered, will be commodity stocks or related investments for 2011.But I am not committing to a buy and hold until 2012. Just that as this unfolds, there will be spikes higher before the game changes. The percent gains from now until the "top" in 2011 will be best in commodities.
Fail:  Stocks entered and exited about the same on S&P 500 (flat)  CRB (commodities) ended down.  Safe to say most commodity stocks hammered last two months of 2011.  Fixed income clearly won, congrats John! (Case for USD article)

9) US Dollar and stock market pricing I can't make a prediction on this time. There is so much at stake, so much at risk, so much global tensions building. I can't even guess at how the dollar and the market fares. I can say both will see significant volatility, and the market won't march up back to old highs UNLESS it is accompanied by resource prices soaring. If the market makes new all-time highs, in nominal terms of living standard, it is really a new low.
SPX won't go lower than 500, or higher than 2,000 in 2011. Best I'll do for a prediction. ;)
I'll take a score.  I was wishy washy on this prediction.  2011 stocks and USD ended about flat!

10) More countries will fail or enact protectionist measures, exasperating volatility.

Partial SCORE: China has started just recently protection acts.   Plenty of countries that have changed hands.  But there hasn't been widespread failures or protectionist acts to the degree the line implied.

Thursday, December 29, 2011

Greatest Crimes are publicly known

The greatest crimes in human history are often perpetrated for all to see.  The reason that these crimes are so egregious is they occur in a social environment that permits them by the public. (either overtly or lack of opposition)

Genocide is often committed openly with full knowledge of the population of the country and the world,  as recent as Darfur.

After World War one, Germany openly attempted to pay off it's debts using it's printing presses until it's own currency imploded.  That act eventually lead to Nazi leadership, and yet more genocide and invasions without repercussions from the west. (initially)

And in America, we have widely publicized acts of financial games without any opposition from the public (or world) in significant numbers.

Before my rant runs a muck in this post, let me get to the point.  Don't assume that laws are being enforced, and that America is somehow guaranteed to be land of the free, with fairness to all.  Without strict law enforcement for everyone, the US will slip into anarchy.

I have documented many of these games being played in my series Financial Ground Zero, with additional recent headlines below.

Attempting direct theft of serialized, documented, known property of account holders to pay off bad debts by MF Global. I have yet to see Former Governor Corzine have charges against him in the 10th largest fraudulent corporate default in US history! (or ANYONE! MF video on acts

Enacting laws to effectively shut down news blogging by congress. - Quoting articles can be considered piracy.  I for one will stop quoting articles, as my freedom is more important to me that my free speech.  I suspect vast majority will conform like I will, to remain out of jail to be 'free'.....

Goldman Sachs offering products that on the face of it, should be predatory or fraudulent are OK.

Years after 2008 collapse, there have been ZERO prosecutions against any wrongdoing.  I posted this before, compared to the S&L crisis in the early 90's with 1,000's of prosecutions with far less fraud!

Repeat direct violations of Capital One pursuing funds against lawfully bankrupt citizens without significant legal ramifications.

JPMorgan’s Swaps Occupying Cassino Prove Curse Like World War II

Federal Reserve bank lends 586 Billion to organizations it doesn't know. Illegal if US citizens foot the bill on bad loans!  The US constitution clearly states only congress can appropriate funds.

Allegations by Elliot Spitzer that over 7.7 Trillion in loans given in secret, and uncovered years later thanks to persistence of Bloomberg.  Bloomberg thanks for wasting your time, no one cares.

There is plenty of open evidence that the USA is headed for an unbelievable crisis.  The issues are quite publicized even if no one is paying attention.  When this comes to a head in the future, there is no excuse for Americans to be surprised.  We have plenty of access to information through the internet, and all of these items have been published (not loudly) in the press and TV.  Lack of law enforcement leads to consequences, as we are starting to see from MF Global.

Pay less attention to pop culture, more to what is happening in this country,  and vote for true change, Ron Paul,  before its too late.

This post has been added to  Financial Ground Zero, for the success of Ron Paul may be the final political destiny of the 2013-2017 events.

Wednesday, December 28, 2011

Ron Paul

Since the start of this blog, and before, I have held the conviction that the financial issues of the USA are a result of American politicians.    And the politicians are a reflection of the population.  For the citizens of the USA could choose leadership for true change.
Obama ran on a platform of change, but from my position, I don't see change from George W bush on a political level.  Granted President Obama is more charismatic, well spoken, and does a great job of giving motivational speeches.
But from a financial stance, or law perspective, I haven't seen anything different that GW bush, with exception of a health care bill that doesn't start until past his (first?) term.

So what does this after to do with investing?  Well, my stance that USD will hit problems in 2013-2017, and gold as good long term investment directly rest on the next president.  For my view can completely change if the US elects a president who enforces laws, attempts to curtail spending, and laws affecting the Federal Reserve Bank.

From my perspective, there is only one candidate that could be elected that could provide true change, and that is Ron Paul.  Sure, you can find something I don't like about Ron Paul.  (Ron, gold is NOT MONEY!)
But that is BETTER than a candidate who tries to appease everyone, and doesn't provide true leadership.

So if Ron Paul does get elected, I have hope for the USD, and actually afraid gold collapses.  For if the US becomes more fiscally sound, gold will lose it's fear play.

I'd still be bullish on natural resources, but not nearly as hard core.

I encourage you to watch the "third chapter" in this video, when Ron Paul speaks on the Jay Leno show.
For we the people can change the future, if we truly want change.

As Mish covered, the media is of course slanted against Ron Paul, as he is not the candidate of appeasement.  To read more see Ron Paul Did Not "Walk Out" of CNN Interview; Blatantly Biased Headline by Time Magazine; Six Reasons to Vote for Paul

Further Ron Paul in some polls dominates over other republican candidates, but is marginalized by the republican party.

To donate or find out more about Ron Paul, visit http://www.ronpaul2012.com/

Monday, December 26, 2011

This week in no charts

This week I don't bring any charts.  First, I am being lazy.  Second its the last week of the year, and I suspect charting this next week is pretty much useless.
So lets look forward shall we?
 If gold etf GLD fails to break below 150, there is a very good chance that this is a near term bottom.  Seeing that Oil has not collapsed is not encouraging.
Hedging into gold is not a bad idea here, as 2012 may bring unintended consequences from this money printing party started in 2009.

The worst case for this economy isn't a market drawdown back to SP500 at 800 or so.
The worst case is a rising costs in commodities.

This is the last thing that should happen right now.  China's economy has popped. So has Australia.
And its no secret that Europe hasn't had a good time of it as of late.
Further, the public news media hints at a new recession in the USA.

All of this combined spells falling commodity prices as the major countries contract.
Therefore if the USD starts to fall, and/or commodity prices fail to lower, we could be starting to see some hangover from free money.
Gary of the Smart money tracker is calling for gold to go much higher if this is the case.  I encourage readers to pay for his services to read his thoughts.

I am not so sure.  If Ron Paul actually gets some traction as I previously posted, we may have some USD optimism.
I think the moment Ron Paul is being sidelined in the nomination, we'll have out answer.

Gold up, USD having a hard time keeping its level, and markets mixed or down.
All we need is Peak Oil, USD issues to drive oil higher and that should really put a strangle hold on the USA.

If we d start to see Gold firm up, this will likely be the last reasonable entrypoint, gold thereafter will look crazy to buy at levels at that time.
This is why i encourage everyone to buy some gold (GLD).

Oh, and this week, my best guess is up.  Why? Who could possibly be left to sell going into this not so good outlook for christmas.
if there isn't sellers, by definition, there are more buyers than sellers.

OK...I Lied...here is a chart EVERYONE should pay attention to.  I'll likely reprint this again in another post.
Food for thought about commodities.

From WebSufinMurfs FinancialBlog2

Saturday, December 24, 2011

Mr Bean Merry Christmas

There is plenty of time to resume my doom posts on December 26th. :)
For now happy holidays, a Mr. Bean clip, and a clip of the classic fireplace.

Thursday, December 22, 2011

Buy Low, Sell High

I have mentioned natural gas as a resource that has been beaten up.  Previously I dabbled in buying the ETF UNG. (natural Gas).

Well that didn't work out as planned, granted i didnt buy at 120 a share, closer to 10 bucks a share, but here we are touching 6.75 a share.

Timing is everything of course.   But the question is, how low does this go?   At 6.75 a share, every 50 cents is a major swing, percent wise.  Also it is possible that this ETF is simply broken. (mechanics of the etf).

I see opportunity, at this price I am thinking a bottom has happened or will be seen in the next few months.  Unlike many other resources natural gas flows 24 x 7, and there is no "savings" by producers to not sell.  So amid any demand weakness vs supply the price drops, to sell all production.

It is one commodity I think is pretty hard to manipulate.  If you like the idea of buy low, sell high, well, I think everyone agrees looking at this chart, we are in the low zone.  The only question is, will it ever be high?

I think so, just a matter of time.
Click here for latest UNG chart.

From WebSufinMurfs FinancialBlog2

The End Game

Looking ahead to next year, I see a few big drivers.
First is Europe, can they keep it together to not fall apart until after US elections.
Second is the US economy, China, and Europe, how deep does the next deflationary rabbit hole go?
And last is American politics.

If we get more Obama/Bush, its more huge deficits and a race to the bottom for the US currency.  The only candidate where that is not the outcome is Ron Paul.
Ron Paul is many things, but one thing he is beyond a doubt, pro-fiscal responsibility.
I will ignore the whole "gold is money thing", for I hope that is a complete non-starter if he is elected.
Other than that, him cleaning house means a SOARING USD, also a market collapse as reality is brought back, by restoring fake accounting rules instituted in 2009 under "emergency" conditions.
Apparently the emergency will last forever, unless Ron Paul is elected to re-instate sane accounting.

Either way, I really cant see a soaring market in 2012.  I also can't see a collapsing dollar into the election IF Ron Paul gains legitimate status for president.

And I can't see gold soaring if Ron Paul is a contender, for if there is fiscal discipline, gold is not a required hedge.

Anything could happen, there are so many factors.  But the end game for this entire debacle is with the next president of the USA.  For that president won't be able to kick the can like Obama did "one last time" for 4 years..

The dirty secrets are out, the banks, governments, and financial corporations are under scrutiny.  The people are awaking to what I realized back in August 2006.   And once they get to where I have been for years, the can kicking will be called BS, and reckoning day will finally arrive.

No, we won't die en mass, and there won't be mad max, but there will be an "adjustment" to the realities of the serious topics pressing the world.

For now, CASH is still king, and some gold is OK, until it crosses below the uptrend line.

Sunday, December 18, 2011

Libertarian Presidential Debate

The two candidates in the debate are  Bill Still and Carl Person.   I have posted on Bill Still in the past.  This debate is excellent to hear provoking thought on a wide range of topics.  With that said, I have an issue voting for either candidate, out of concern of being strong enough to lead a nation.  Their brutal honesty and "reasonableness" pretty much make them not leaders of nations.

At marker 26:26, Bill still makes a very fundamental point, that enslaves the US citizens and government.
At around 1 hour and 9 minutes, Bill shows how extreme he is, stating end fractional reserve lending "in a year".  Quite insane thought that fast, and that extreme.
At 1:11, excellent question about people control using fear.

In the end, both are very one dimensional candidates, and too extreme, and I doubt can handle the pressure of leading a nation.  But that does not diminish their ideas that are worth pursuing.

Friday, December 16, 2011

American Manufacturing Revolution

I am of the belief America is kick starting a manufacturing revolution.  Sound crazy?
It is if you think of the mass manufacturing of GM and classic manufacturing.

Those types of large scale manufacturing is likely dead in the USA for the rest of my lifetime.
The kind of manufacturing I am referring to is smaller, agile, cost effective companies.

In affect, the future GM's of today, that start up right here in the USA, and when reaching a point of mass employment, likely off shoring the labor.  Most of these companies likely won't off shore at all, as they won't need more than 50 people to do "huge" business.  There maybe 1,000's if not 100,000's of these businesses springing up over the years ahead.  To some, employment of only millions and not 10's of millions is not revolution, it is to me.  For these businesses will leverage the cutting edge of the internet and technology to start up their businesses with pennies on the dollar of just a decade ago.

In effect, you the reader, can start up your own company, with very little personal investment.

Now that I have set the tone of the manufacturing revolution size, lets look at what is happening.
Below are examples, but by no means is the only examples.  I list enough in each category to show the revolutionary change in the American Landscape for new businesses.

Free Business Software
There is Google docs, that provides spread sheets, word processing, and other tools that can be shared across the world, real time, to collaborate and communicate.  For example, you can create a spreadsheet and work with someone else, real time, seeing each change as it occurs, with the person across the globe.
Did I mention, Free?
You can communicate, using Google Voice, make free phone calls in the USA/Canada, and free calls across the world with other Google-ites.

You can create virtual conference rooms, using Google hangout, share a video conference with anyone.

Also, share desktops, instant messaging, and control each other's pcs using software like Adobe connect now.

Plus find 1,000's of free programs at many hosting sites, including http://sourceforge.net/ .
In a nut shell, for information based tools, free or near free costs, just need a PC for 400 bucks, and an internet connection at your local starbucks.

Cheap  Tools
For manufacturing type work, there is now many open source projects to create physical machines.  The entire blueprints are free, and you can make the device at home.  Or you can buy the device, pre-made from a manufacturer.  The best example of such a devices is a 3d-printer.  You can "print" objects, like a chess piece, using this device.  Such a device is typically 10,000's of dollars.

But you can buy such a  tool at http://www.makerbot.com/ for under 1,000 bucks.
Then you can download pre-made 3d objects to print at http://www.thingiverse.com/.

There are other projects similar,  such as laser cutter at laseraur.  Check out http://www.buildlog.net/blog/ for other tools.

For non-physical products, based on the internet (the Cloud), there are cheap options here too.
You can download a pre-canned server at http://www.turnkeylinux.org/ , and host it at Amazon E2 cloud for 0.09 cents an hour!

Cheap Labor
Need someone to do a specific technical task?  Maybe have someone do some proto-typing woodwork?  Or need an architect?
Just shop for the right person at the right price to do the work you need, freaking dirt cheap.
No need to have employees, if you can bid out the detailed work piecemeal to specialists.

When I see the prices people will do some of this work for, I am stunned.
You may make more money painting walls than doing technical skilled work.
Check out http://www.ifreelance.com/ for all sorts of job bids.
Have a specific techie job needed, try http://www.getacoder.com/ or http://www.project4hire.com/ .
Bid on construction work at http://www.bidclerk.com/ .

Cheap Venture Capital Raising
OK, so you have leveraged Free Software, cheap labor, and cheap tools.  You now have your idea started, enough to seek funds to take it all the way.   What chances do you have a bank will lend you money for your start-up?   Borrow from relatives?  Seek venture capital?

All of these methods are very hard to get money, and involve potentially high consequences for the risk everyone takes on the project.

So, how do you minimize risk? by SPREADING the risk among 100's, or 1,000's of people, each risking 1-100 bucks to fund your project.  To boot, you can give people first run's of your product, for a pre-purchase price.

Just head on over to http://www.kickstarter.com/ for funding.  Create a video, set up your funding requests, and watch the funding come pouring in.
I found several projects that I liked.  I could become a real addict to this web site.  I want to buy stock in this company!
Check these projects out:
Thin iphone wallet / stand
Connect smartphone or tablet to any external storage via wifi
Use a small little device to "interface" the real world to the web, by using built in motion, sound, and heat sensor to gather information and trigger action.

This is an incredible revolution that the media is just simply missing.  I see this as earth shattering as the last industrial revolution, back in the early 1900's.
But the successes will be 100,000's of small companies, with the rare exception of a company growing to fortune 500 status.   The average pay of these new workers will be substantially lower than the Union workers of the last industrial age.  They will need to innovate, work hard, to secure their niche 

Video about Kickstarter

Quick video on makerbot

Thursday, December 15, 2011

China is setting up to be the next world financial leader

China has popped it's own real estate bubble, and has publicly signaled it will continue to allow the bubble to burst.   I am mildly surprised China is NOT fighting the popping of it's own real estate bubble like America did. Sure, China behind the scenes is probably taking steps to prevent an complete freefall.  But to signal that they won't re-inflate the real estate market is very astute.

Further, China is changing leadership next year.  This combination is setting to be one hell of a rocket ship investment.  Bottom I think (to be seen) is second half 2012, or first half 2013.  That will be the time to buy Chinese stocks, and maybe a better investment than gold!

It all depends on politics, if the next regime can convert the Chinese economy to consumption, and take out the US as financial engine.  This unfortunately also supports me looking for USD collapse in 2013-2017.

For more information, and a great summary, see this Mish article titled "China Prepared to Let Housing Prices Sink in Spite of Economic Slowdown; Transition to New Regime Underway; Decoupling in Reverse".

China’s Deserted “Fake Disneyland”; Shanghai Prices Down 40% from Peak, Inventory Clogs Market; Pollyannas Proven Wrong; Implications for US Dollar

Wednesday, December 14, 2011

US Dollar Strong

I have been fairly bullish of the USD in the near term.  In the future, the low of May 2011 for the USD will be a watermark level for future questions of US Dollar as a storage of wealth.
On the index I watch, that is a level of 73 on the index.

So why is the USD gaining strength?
My spin is Europe being exposed as a fragile economic model that arguably is worse off than the US.  And China's well covered Real Estate pyramid scheme has finally been popped.
Japan continues to try to devalue it's currency, and it's economy is not a growth leader.
knocking those countries out as having the strength to drive their currencies higher.

The USD, being the world currency, enjoys the benefit of others failure.
As I have written before, 2013-2017 will be the time period for USD crisis, for now, party on! Cash is King!

Chart of USD advancement since May 2011 below.
A strong USD makes an advancing market problematic.  I am amazed actually how well the US market has held up.  Gold also should suffer some setbacks in a strong USD advancement.

From WebSufinMurfs FinancialBlog2

Monday, December 12, 2011

Market Volitility

Last week, early, I dumped many positions I had that are long.
I fear the worst now, a deflationary collapse is upon us in the next 2 months.

It is of course, impossible to tell exactly what will happen.  It is possible, for example, for the banks across the world to issue more money and cause an currency devaluation.

But it seems like they are pushing on a string.  Meaning, the banks can create as much money as they want, but there is no way to cram it into the system to get used.  The only thing the banks can do with new money is to jackup prices artificially, such as natural resources, stocks, etc.   Items that provide liquidity for hopefully easy exit.

The rub here is if they can't get money flowing through the economy, the injection into resources, stocks, etc could severely hurt the common person.  As the economy stagnates, the costs of items tied to the banks investing rises, amplifying damage of a recession.

I am having a real hard time seeing how the markets overcome these forces now into the election.
Cash is king.

I reserve the right to flake out and flip flop.  For those who want a simple, non-flip-floppy trend, simply read this post and follow it by clicking here.

A GREAT read on the vicious cycle we are in with the world banks can be found by clicking here.

Sunday, December 11, 2011

Police Brutality?

I ran across an older video from early November, showing students being pepper sprayed.
You can watch it here.

On one hand, its easy to say it was unnecessary.  The students are obviously peacefully protesting.  But on the other hand, in the scheme of life, this is not even close to being police brutality.  I don't think American's appreciate the level of police and military abuse that is normal in many countries.

Don't take me wrong, I am not defending the police actions.  But I am saying, lets stop focusing on the minutia, and start focusing on the grand scheme of what is happening.

But I got to love the internet, this spray attack has unleashed tons of pictures to make fun of the cop.
Click here, here, and here for some examples.  Funny stuff.

What I do love about the internet, is it brings large numbers of people attention, and using peer pressure can affect other people's behavior.  I hope this cop gets tons of attention and mocking with these images.   Socialization can bring about change in the minutia, lets not lose focus of the huge corruption that is occurring on a grand scale.   For it is lead by example that should be the focus, no laws for the top will result in chaos at the bottom.

Saturday, December 10, 2011

Hitler's take on Financial Blogging

This video claims making 6 bucks a month, obviously I am not running enough adds, I am lucky if I get 3 bucks a year!

Wednesday, December 7, 2011

Bloomberg takes on Ben Bernanke...

Bloomberg to its credit fought through the courts to uncover the secret 7.7 trillion dollar in secret government loans to banks.  to put into perspective, since the history of the US, the total debt created to date is about 14 trillion.  And it took about 7 to be created in the last 10 years.

Mr. Bernanke doesn't know when to keep his mount shut, and lucky for us, Bloomberg is standing its ground.  I actually have a tiny bit of optimism here.  It's very tiny, but I hope Bloomberg rides this story to it's full conclusion.

See Bloomberg article "Bloomberg News Responds to Bernanke Criticism".
I covered this in post "Eliot Spitzer speaks out about USA Financial Games" and "Daily Show on Free Money"

Go Bloomberg!

Sunday, December 4, 2011

Eliot Spitzer speaks out about USA Financial Games

Eliot Spitzer speaks out in Slate magazine in article titled "Eliot Spitzer: 5 Ways to Make Banks Pay for Their Secret $7 Trillion Free Ride?".

I can't reprint the article, but her is a teaser section, I encourage everyone to read the entire article:

Now to put this into perspective, lets get to the heart of the matter.  All of the money is supposedly repaid.  So what harm is there in above?  Well the institutions benefited by net pocketing 13 billion dollars by keeping money that would have been paid out at normal rates.

So while "net" the entire lending situation was extreme, the net in-their-pocket-profit was 13 billion, what amounts to be a gift from taxpayers to the financial institutions.  Considering the USA is debt spending over 1.7 trillion a year, it isn't that huge comparably.

What IS a big deal is it was all done in secret, and it took years of Bloomberg reporters working the court system to get at the information.  And this one point IS A BIG DEAL.

The precedence is now set.  The government can give huge sums of money to companies it sees needs help, with promise of payback in the future.....in secret....and its OK!   I say OK because I predict zero prosecutions for Bloomberg's efforts.  And without prosecutions , it sends signal, it is fine to do.

Therefore when buying or selling stocks, or participating in anyway in a capitalistic business, be aware that the opponent, or the target business is subject to government sponsorship, secretly.  Hardly the stuff that makes for a fair playing field.   It renders public financial information difficult to matter in assessing corporate distress or competitive edge.  For example, if you bet big on Ford becoming the largest USA car manufacturer back in 2007, the events later prevented that from occurring when the government decided to fund General motors and become part owners.  Every business is now subject to the government deciding how events unfold.  They are in effect, no longer law enforcers, but corporate competitors.

So the trick now is to get the government to view your business as worthy to secret gifts.  This is the road to currency issues, the USD cannot withstand unlimited abuse before it breaks.

This makes this event worthy of my series of Financial Ground Zero events, documenting the events that are leading to a currency crisis. (2013-2017).  Thanks to my brother for the article link

Saturday, December 3, 2011

Two excellent podcast episodes worth a listen

With the failure of the 6th largest bankruptcy in US history, MF Global is one epic disaster.
I won't hold my breath for prosecutions, even though easily a dozen federal laws broken.

One of the people who lost a bundle was none other than Gerald Celente
Click to listen to:
Gerald Celente on the Smoking Gun Behind MF Global

The other is one of the weekly big picture podcasts by Jim Puplava.
What I like about this episode is he covers all the hard core issues the USA faces into 2013.
Yes, overall its a pessimistic spin, but even if you de-spin, there are some serious challenges.

Jim Puplava’s Big Picture: “Eat, Drink and Be Merry, For In 2013 We Die”

Thursday, December 1, 2011

This week in late chart

Been very busy with work, here is the chart update.
Obviously, a nice bounce this week so far.  Jury is out if this lasts.
I give it maybe through mid January before the wheels fall completely off.

There are many variables, the largest is Europe.  To the chart!

From WebSufinMurfs FinancialBlog2

Monday, November 28, 2011

Europe Stick Save

Looks like we got a market near-term bottom Friday, as Germany and France announces a "stick save" for the crisis.  It can't work, but that doesn't matter.  The market has sold off hard, and on any good news, a relief rally should happen.

So I'll hold off this week in charts until the close Monday, to show the "bottom" depicted.

I may move harder into cash in a week or 3, when a relief rally looks ending.

Saturday, November 26, 2011

Media Consolidation

I posted back on November 2nd 2008, on a post on Blame Republicans or Democrats, where I articulate the high level actions that have contributed together to bring the western world into financial stress.
Back then we were voting for a president, and I stated :
As for either president, either one will face what is now looking almost certainly to be a Depression due to the actions being taken now. Either will face huge debt that they can't pay for. I am torn......

Fast forward to November 2011, and it looks to me that we are  in a continual recession/depression since 2008.  (I can make the case since 2000, but it is less apparent to most.) We are on-track for this time period to be relabeled a depression in a few years.

One key aspect of this situation is the media of blame, from my 2008 post is the media.   The media has not been doing a great job of informing the public, or even civil to those who try, as I showed in  Hostile Media on non-mainstream opinions.  The root of this is lack of competition for the eyes and ears of the public through TV, magazines, and newspapers.   In the post Blame Republicans or Democrats, the source of the lack of media variety was born by Ronald Reagan, bringing us to the top 5 giving 80% of the information me and you get.  

Today I have a more current depiction to better illustrate from "Frugal Dad" blog, thanks to my friend Bob.   It depicts this change of information suppliers.  My hope is over the next decade people will shift to bloggers and other news sources like I have.  Although it can present questionable information, to date I don't find it less reliable than the top 6 news providers, and in most cases more insightful.

Source: Frugal dad

Friday, November 25, 2011

Hostile Media on non-mainstream opinions

I watched two videos today that are both worth watching.
First is Ron Paul, and his opinion on a wide variety of topics.

The second is a financial adviser who is not very optimistic of Europe, Japan, and I imagine, the USA.

What struck me when I watched these was the outright hostility of the interviewers.
The one interviewing Ron Paul was very  aggressive in his questioning.  Each one was positioned to make Ron Paul look fringe. (which he is!)  I'd love to see the same interview-er with other candidates to see if the questions are this deep, confrontational, and at times dismissive!

The second the interviewer clearly had an agenda to paint the adviser as profiting from main street losses.
As in my thankful post, this man could have avoided the interview and kept his opinion to himself.
Instead he stood strong to meet in the public eye and stand his ground.

It no wonder its so hard to get the straight scoop when the media is on a mission.  Shut up and conform already!

This woman says there where very few investors that knew the world was heading into financial turmoil.  Why is that? oh, maybe the media isn't questioning what is presenting at face value?  Nah, the media has zero responsibility to keep the masses informed, they should do like I do, read bloggers and watch random videos.

In this clip the interviewer says you can't buy insurance of a house you don't known.  She is actually right.  All DERIVATIVE MARKETS should be killed off or deeply restricted, and minimize leverage.  Just take a look at Israel for a model of what is sane.  It is these exotic Derivatives in an unregulated, opaque market that are a problem.  Don't attack this man for participating in the market!  Go after the construct, and fix it!

Thursday, November 24, 2011


My blog is pretty much all about reporting some very scary stuff, that could be viewed as negative. Today's post is the positive.

I am most thankful for the life me and my wife have built, with our son Joey. She has been everything I could ask for and more. She is understanding, caring, strong, and very hard working to make the home life I enjoy today.

I am very thankful for all the wonderful people that has been my lifelong support system. My immediate and extended family. My friends, who have been there for the good and bad. Of all my friends, especially to the "Friday night" crew, you know who you are. :)

For my work, and more importantly, the absolutely fantastic, smart people it is my pleasure to work with every day. By extension being employed by a multi-national corporation, reasonably well compensated in this rough economic environment that I expect to last 10 years from now.

For where I live, a relatively insulated community surrounded by affluent towns. I hope it provides better for my family in the dark times ahead.

For technology, for my entire life has been permeated by it in every possible aspect. Technology provides for me through my job, finding my wife, for my enjoyment (gaming!), and for the information flow and framework to bring this post.

 I am thankful that even though this country will be shaken to it's very foundation, to date, it remains relatively free.

For my health, and the health of my closest friends and family, with unfortunately a couple of exceptions. 

And finally, for the unsung heroes that are fighting for a better tomorrow, by donating their time for our collective benefit. This includes all that have done so 100's of years leading us to today, and doing so today for a better tomorrow. Of the many people that fit this description, I am especially thankful for the financial bloggers. Mish, Karl Denninger, Gary of Smart Money Tracker, Slope of Hope, the minions on ZeroHedge, and the many financial insightful who voice their opinion on the public court. For without their efforts, we would have zero chance to be aware of the problems that we must collectively face and overcome.

Wednesday, November 23, 2011

Stansberry Investors Video on Political and Macro Economics

This video looks familiar, I believe have already posted it. But I couldn't find the link quickly. So here it is (again?) Video from Standberry Investors on the macro economics and politics, and a possible future. Thanks for my brother for the forward

Wednesday, November 16, 2011

Jim Grant Speaks about global financial insanity

This Jim Grant Interview is great. I love the internet, I get so much real information about reality vs the fantasy or outright void of information provided on mainstream news. At around 3:40 market in the video, Mr. Grant points out that mark to fantasy accounting is bad, but what is worse is the central banks have zero accountability for their own accounting. The New York Fed is leveraged 100 to 1.   MF Global, the 8th largest bankruptcy ever in the US was leverages 80 to 1 as a comparison.

Assuming thats true, why not leverage 1 googloplex to 1?   Mathematically there isn't much of a risk difference, since you can be insolvent in a heartbeat if accounting was accurately measured.  I just don't agree with Jim at all the insinuation that fiat currency isn't good currency.  I really do hate the gold-bug mantra that shiny rocks is money.  Gold as money is more draconian than the current system by a long shot.

Further, the Federal reserve will NOT take mark to market losses, but instead have a direct "running tab" with the treasury.  What is the difference between US currency and Zimbabwe?  Each month there is less of a difference.  Currency deserves respect and STRICT rules to enforce it in spirit.  Nothing less is acceptable.

Tuesday, November 15, 2011

European Crisis ahead

I am continually amazed at how incredibly irresponsible people are at their jobs and responsibilities.  The European situation was obvious to me and many other bloggers years ago that they where sitting on a pile of lies.  A pile that makes the USA lies look not that bad.

And here we are, day after day, month after month of the European political drama of denial and patchwork promises to stabilize the union.   What have Europeans gotten for all this effort? Their (and US) tax dollars thrown at bankrupt countries, banks, and other financial institution with NOTHING done to address the root cause, excessive debt, lack of transparency, and mark to fantasy accounting.

Greece's bond rates I have published before soared.  Now its spreading to Italy, Spain, Portugal, Ireland, Belgium and even France!

The leader for being the next Greece fiasco is Portugal, with soon to follow Ireland, Spain, or Italy.
Once one of these countries become the next Greece, I predict we won't have a 3rd, but a 3rd, 4th, 5th, and 6th at the same time.

Prediction: Europe is incapable of doing the right thing, as America has proven it isn't either.  So we must have a European crisis.  And Germany WILL buckle and print the euro just like America.

Next its a coin toss on who goes down next, China, US, or a long list of other countries.
But for those who think the US is untouchable, your just like most Europeans 1 year ago.

Once those countries buckles, then its time for the global currency crisis.  I still think 2013-2018.  It takes quite a while for this to play out.

How bad off is China?

Jim Chanos, my favorite investor, spoke of a statistic I cannot correlate.
He stated that if you look at the "implicit" debt obligation  is 200% of China's GDP.
Notice Chanos did not provide the same analogy for the US.

Both videos a great watch.

Sunday, November 13, 2011

This week without stock charts

Over the last few months or so I have become a little disturbed about the market.  Europe his dire news all the time, the lack of US job growth, increasing housing defaults, increasing poverty, very large bankruptcies through fraud ( MF Global, top 10 of all time ) and other bad news.

Ignoring the press, the spin, the bloggers, everyone there are a few facts you can't ignore.
Price of gas remains high, price of gold has remained relatively strong, and other natural resource prices are not collapsing.  And through this the US dollar has NOT risen like a rocket.  Sure, it has gone back up compared to other currencies, but not nearly what I would have expected.  After all, the news is focused on destabilization of  the euro.

Throw in the market has shrugged all of this off.....what does it tell you?

My gut is telling me we maybe seeing the initial effects of monetary inflation, in a deflationary economy.  And in such an environment, we'll see very odd stuff.  I can't imagine being short in this environment, nor long, except natural resources.

For now I am continuing to try to sit tight, and wait for Thanksgiving weekend.  Remember, congress has to come to terms with the government budget.  Expect disappointment, and a possible US dollar decline.  If the dollar does decline, we may see a nice market rally, contrary to popular thought.

AVL got some strength earlier in the week.  Gold and silver look good, and of course gold miners.
Good luck, its an impossible scenario no matter what you chose.

Friday, November 11, 2011

David Rosenberg Interview on economy

Mr. Rosenberg is a well known former Merrill strategist gives a great view of the economic conditions, and investment sectors to look at.

I completely agree that a turn around must come from the politicians leading the nation.

Thursday, November 10, 2011

Steve Jobs and Life

I don't believe I even mentioned on this blog the passing of Steve Jobs.
As an IT guy, but not an Apple-ite, Jobs has been a presence in my life, indirectly affecting my daily work.
He is a rare item, a true leader in every sense of the world.

A true leader does NOT mean perfect, nice, or even civil.  It means as a man he can lead others to move heaven and earth, shaping the future out of nothingness.

I read a post on Slope of Hope about Steve Jobs.  It read to me as an honest assessment of Jobs and the impact on all of us.  I am one of those who does not like to mix god-talk with topics.  So ignoring the god references, and the statement Jobs was the best business man ever, the rant reads true.

An entertaining read from Slope of hope,

Steven Paul Jobs and the Meaning of Life

Update: Thanks to bob to a nifty site recanting the experiences of working at Apple as an engineer in the early days, web site called Folklore.org

Wednesday, November 9, 2011

Where is the bull market?

The US stock market has been fairly resilient during the European debt crisis.  The US dollar has risen during this crisis and held it's gains.

But so far, the US stock market has not clearly entered into a bull market, and has been trading in a range.
But there has been one area that has been resilient, price of gold, price of gas at the pump, and the price of food.  The common thread of course is natural resources.  Granted, all have come off their highs, but their prices have not collapsed.  Sure, copper collapsed, and so did corn, but those bubbles are reflections of how strong the overall commodity market is.

I am cautiously optimistic that during the European drama, that gold maintains relative strength.  This is a stark contrast to 2008, when oil hit a high and started to collapse, the entire commodity market swooned AHEAD of the market collapse.

To be clear, gold is not money, and there are no guarantees of it doing well in a Euro collapse, if that transpires.  But in 2008 people looking for safety ran to USD and euro.  Then when US decided to openly devalue it's currency, some  ran to the Euro, driving it up significantly against the USD.

If the Euro does enter a crisis, people that got burned may not be so quick to run back to the USD, but instead into gold.   And I am also following Gary of the Smart Money tracker into Gold Miners (ETF's GDX and GDXJ).

The hope being that money MUST flow somewhere in a crisis.   With the US Dollar not clearly going to soar for years to come, and no one trusting China's currency there isn't many options.

Japanese Yen and USD will continue to do well I believe in the short term.  Many people will flow into them, as they have done for 30 years, when looking for saftey.   But the key is to look at what happens once all the people run from Euro and other currencies into USD and Yen?

Maybe, if we have a global currency collapse.  But I doubt that.  It is more likely when the dust settles in the Euro, the USD will have seen it's final rally, as there are no buyers left.  Similar to what happened in the US stock market in 2009.  But the time the S and P 500 hit 666, there where no more sellers left, only one way left is up.

By the time the USD hits the high at the Euro crisis, whenever that is (next week, next year?), there will be no more surge of buyers.  Then there is only one way, down.

With gold I want a foothold BEFORE the USD hits a high, to be positioned for the finale.
Good luck.

Sunday, November 6, 2011

Where should your money be?

I am not going to endorse or reject this video.  I think it is worth readers to watch, and give thought to the content.  At the very least, it was interesting to see how they used  the movie It's a Wonderful Life to make their point.

At the end, it refers you to the web site Move Your Money for more information.

As food for thought, check out youtube and surf, I found this one, all interesting.

Saturday, November 5, 2011

Lost Power

As some of you have heard, the NJ area was hit hard with an early snow.
I was without power from Tuesday until Thursday.  Between that and being in a wedding Saturday, I didn't have time to post.  I should have time this week.

Tuesday, November 1, 2011

Greece destabilizing fast, time for European meltdown?

Greece is destabilizing fast.  Greek prime minister George Papandreou replaced the top brass in Army, Navy, and Air Force in a surprise move.   This is following another surprise move by announcing holding a public vote on  EU bailout agreements, as soon as next week.

Government Greek 1 year bonds now pay a return of 205%!!!
If you bought 10,000 euros of Greek government 1 year bonds, in 1 year, the bond will be worth 30,000 Euros!

The current proposed plan is to cut bond debt by 50%.  So if the 10,000 euros turned to 5,000 Euros, in 1 year it would be worth 15,000!  Still a 50% gain for 1 year in bonds.

It should be obvious that this is not risk free.  There is a reason why the rates are so high.
Because the government is destabilizing and you may get ZERO return on your bonds.

And if Greece falls, expect Spain, Portugal, Italy, and Ireland to  be not too far behind.
If Europe enters into a classic deflationary collapse, which is once again it is looking to be, the entire market could get a big flush.

Good luck.  We live in truly historic times.

Monday, October 31, 2011

This week in chart

The dollar has bounced, and the market fell, no surprise here.
The question is can the dollar find footing, I suspect not yet.

So today, I bring the market view of the last 6 months, to put 10-31 market trade in context.

From WebSufinMurfs FinancialBlog2

News round up

I haven't done this in a while, but there are multiple news events worthy of your eyes.

MISH'S Global Economic Trend Analysis
Race to Debase Currency Back On - Japan Finance Minister Promises to "Intervene Until I'm Satisfied"
Head of EFSF says Bailout Fund Could One Day Issue Bonds in Yuan - My Spin - this would eventually lead to WW3

Czech PM Considers Referendum to Halt Joining EU - Unintended consequences by EU doing the 'wrong' thing.
Treaty of Debt - An Eye Opening Video on the ESM Bailout Mechanism
Spain's Unemployment "Unexpectedly" Rises to 21.52%
Shanghai Homeowners Smash Showroom in Protest of Falling Prices; Developer Warns on Price Drops; "Twilight Zone" of Phony Accounting and Shadow Money
 The "Most Transparent Administration Ever" Seeks Law to Respond to Freedom of Information Requests with "Information Does Not Exist"

The Market Ticker
Word on the street, Greek bond deal WILL trigger CDS default event

Slope of Hope
Compare the Stock Market in the Great Depression to today (worth a quick look at the charts)

Zero Hedge
Interview with Author about Germany's hyperinflation after WW1

Sunday, October 30, 2011

Savings and loan bubble vs mortgage loan bubble

For those readers who can remember 1989, they will remember that the savings and loan bubble back then was blamed for the early 90's recession.   When the bubble popped, the prosecution began.

Even though I was barely an adult, I do remember the media coverage of the prosecutions.
Below is a street interview of Bill Black, where he recalls his part of the prosecutions in the S&L fraud, and compares it to today.  He also refers people to the blog http://neweconomicperspectives.blogspot.com/ for more information.

Although I agree with the outrage that we have entered in to large, unabated, lawless era.  I don't view it as the same outrage as most.   The protesters, Karl of the Market Ticker, are screaming Stop the looting and start the prosecuting!.

I the lack of the prosecutions, or law enforcement as a reflection of society.  The lack of law enforcement tells me the average person in government, police, and politics, do not have passion for taking the harder road and diligently enforcing the letter of the law.   It is relatively easy to prosecute a man for petty theft, violence, or assault.  It is quite another to work a case involving intricate situations with vague boundaries to make a case and prosecute to the fullest extent of the law.

The country must degrade to the point that the AVERAGE person is ACTING upon this desire.  I don't believe this will change until 51% of Americans are motivated to participate in the system, not just vote.   I fall into this category, so I am not preaching from up high.

Interesting ad-hoc video below, audio interview from earlier this year can be found here.

Thursday, October 27, 2011

When does the other shoe drop

It is quite clear the markets are in rally mode.  Nothing moves in a straight line, but assuming Europe does succeed in advancing its voluntary debt forgiveness but this is not a default according to law plan, markets may levitate for a while.

But there is a fly in the ointment on multiple fronts.  First there is this Christmas sales.  The US Economy is still judged by public consumption.  So if sales are poor, or margins cut deep, companies may not have a good season.

But lets assume that sales do OK, what else is on the horizon?

Think back to August, what news was on every tv, every hour, and had a buzz about on every news program?
Think back.

Wait for it......

The US debt default, end of the world.  How quickly we all forget the end of the western world almost happened in August.  And it was true! right? It wasn't political.....wait....maybe it was overblown slightly.  It was a crisis right?

I am here to tell you there was ZERO crisis.  But it doesn't matter about reality, it is the perception that matters.   And at that time, the debt ceiling increase passed, but under the condition of a special super committe is formed to determine government spending.  That the committee must come up with 1.5 trillion debt reduction over 10 years.

What a freaking joke.  The government will agree to basically cut 150 billion a year on a 3.7 trillion dollar budget for 10 years.  Does anyone at all believe any of this?

Again, it doesn't matter about the reality.  But one thing is for sure, next year is an election year.  That means the Republicans and Democrats are going to be filling the airwaves AGAIN about budget, this time deadline November 23rd.

So before we look to the sky for how far the market will run, consider that the news will once again be financial topics, and being spun loudly for November 23rd.  The market hates uncertainty.

My bet?  I don't want to be long markets into November 25th, right after Thanksgiving.  Between the Christmas sales and newly passed budget cuts, I am not betting on a new market high.

Between now and then, Gold goes up, dollar goes down, markets climb or trade in a range.  I'll stick to gold, gold miners, and silver.
Good luck

UPDATE: 10-28-11 @ 8:50 am  Election worries drive deficit talks

Europe Celebrates Lawlessness

The fiscal problems in America and Europe have driven government sanctioned fraud globally.  In March 2009, with the global crisis hitting lows, the FASB changed accounting rules to allow banks to mark 'assets' at a valuation they determine, rather than what the asset is worth on the open market.  This was called mark to market accounting, instituted back in the Great Depression.

The idea is that assets have value, equivalent to what others are willing to pay for it.  For example, if I state my house is worth the amount I paid for it, but nobody today will buy for that price, then what people will pay for it today would be the 'mark to market' price.

Since then, banks across the world have enjoyed a great run, and why not? Their assets in accounting terms don't lose value.  Its a great gig.

Europe now proposes that Greece will be able to write down their bond debt by fifty percent AND this will not trigger a default on their debt.   The second part is key here.  If the debt write down is not termed a default, it cannot be an event that triggers legal action when defaults happen.

This to me rings of what I see in society often today, avoiding responsibility by changing the rules.  This will have ramifications that I believe will far outweigh the benefits in the years ahead.
How can anyone enter into financial agreements if accounting rules can change, if definitions like debt default are altered to suit the "other side of the tables" needs?

The answer is, if you act responsible with your money, you can't  You will avoid entering into such agreements in an industry that has a track record of avoiding adhering to the construct the agreement was based upon.

If the Greece plan comes to pass, the event will AVOID triggering the debt default agreements (like insurance) called Credit Default Swaps.  In the near term, this is a fantastic thing.  I have covered before how CDS coverage exceeds gobal GDP by multiple times.  If CDS is not triggered, is greatly reduces the change of a financial depression.  Thats the good news.

The bad news if money is not treated with respect, and does not have a rigid enforcement of law, the other result is currency collapse.

While I am not stating that a currency collapse will happen, I am stating there is no free ride for avoiding responsibility, there will be consequences.  For today, time to celebrate, markets will go up.  Watch gold and gold miners, I may buy more.

My Favorite quote during this event is
"The world is watching Europe and Germany; it is watching whether we are ready and able, in the hour of Europe's most serious crisis since the end of World War II, to take responsibility," Merkel told parliament.

The way I see it, above was a twist of words, below I have fixed it.

"The world is watching Europe and Germany; it is watching whether we are ready and able, in the hour of Europe's most serious crisis since the end of World War II, enforce responsibility," what Merkel should have told parliament.

Wednesday, October 26, 2011

Gold explodes upward

Today, Gold exploded up, also silver.  Gold miners had a nice up day also.  Gary of the Smart Money tracker is convinced its time to buy.

I am real nervous.  We are on the cusp of an announcement from Europe.  If your of the belief the Germans will cave and finance the debt of Spain, Greece, Portugal, and Ireland, then buy Gold and miners on the open Wednesday.

If you think the Germans won't go for this, then a deflationary collapse is about to begin.  In such a collapse, I have a hard time believing gold rockets up.

So I am splitting the baby.  I am buying a little bit of GLD (gold) and SLV (silver) .  Why? Because if the metals explode up, it will be very hard to buy.  Each day you will look and say "that has to come back down".  It may not.  I'd rather have a toe hold to use as leverage to buy more as gains amass.

Conversely, if gold and silver are indicating a rise, but instead collapse trapping all of us in those sectors, I want to minimize losses by not taking huge positions.
I cannot day trade, i have no time.  I don't like stop losses since as we saw today, metals can move huge swings in a day.

In addition, probably buy 100 shares of gdxj, the junior gold/silver miners.
Again a toe hold, and each day I wait for the market move of Europe indicating, inflationary or deflationary event in the year ahead.  Also if the Fed announces yet another attempt to break the USD into a death spiral.

One thing is on the side of Gold and silver, no matter what happens fear tends to push up the precious metal sectors, and European fear can only help Gold Silver.

Tuesday, October 25, 2011

Ron Paul Speaks

I am actually scared if Ron Paul becomes president.  I do admire the man for keeping the eye on the ball about reforming the government and pulling back spending.

But he has touted in the past the Gold standard for money.  I am completely against tying money to shiny rocks, dull rocks, or any other natural resource with independent value of work done and work owed.

But Ron Paul is ALWAYS worth listening to.  Where else will you get new ideas, insight into fundamentals, and  ideas on actually reforming the government?   I don't completely agree with Ron Paul, but I agree more than most other candidates.  I had hoped (and still hope) Chris Christie joins and becomes president.  Other than him, I see a wasteland from the top two parties.

Monday, October 24, 2011

European Union, the 20th Deadline to resolve is Wednesday

Wednesday's deadline for the Eurpean union to resolve their sovereign debt, after a string of deadlines for over a year to resolve, is now in focus this week for the markets.

I haven't commented much since I was so confident zero would get done, and I was right.
But this week, there may be a peep, I doubt final answer on the European crisis.   But we may actually get some foothold of the new reality out of Europe this week.

We could hear it Wednesday, but I suspect just one more kick the can into Friday for an announcement.
In any event, this is a crucial decision of Europe that will shape all of western countries next couple of years.   I just don't believe the right thing will be done.  Instead I expect more paper games to cover the crisis, until the crisis gets so big, no European country can avoid the vortex created.

It just boils down to take your medicine now, or wait until Europe is on the hospital operating room with a massive near fatal heart attack to see the outcome.

Market Commentary

If I exclude the possibility of the US Dollar hyper-inflating (which in the next year or two seems highly unlikely), I am now very pessimistic for the market.

I can't stress hard enough that cash is king.
See yesterday's post, and combine that with Gary of the Smart Money Tracker private pay advice (I won't republish, join to read) I am more bearish than ever.

I may be tempted to buy double inverse funds.......to catch the down swoop in a "positive" way.

Good luck.

Sunday, October 23, 2011

The US Market Charts in the BIG picture

Today, I have two grand market valuations to look at over the century.  One is S&P 500 in terms of it's valuation RELATIVE to gold valuation. (in essence, if we used gold as money)   The second is the S&P 500 since 1870 to today.
Regular readers know I do not believe gold is money.  But it does serve as a relative valuation to judge how fiat currencies are valued relative to non-fiat valuation.  I would rather have chart of the US market in relative terms to all commodities (averaged).  In absence of that, the gold chart will do.

The charts deliver one message to me.  In relative or non-relative terms, from a charting perspective, the markets are headed don to 700 range....AGAIN.  This is using historical trends projected into the future.  I DO NOT think this is a required outcome.  Man can change laws, and change "Relative valuations" but doing things such as breaking currencies.  Then the charts are meaningless.

To the charts!

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2