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Financial news I consider important, with my opinion, which is worth as much as you paid for it.
Please click HERE to read a synopsis of my view of the financial situation.

Wednesday, March 30, 2011

AVL

AVL is a company that is targeting opening a new rare earth mining operation latter half of 2011. Since that operation has not yet opened, significant risks are present as an investment.

Originally mentioned this stock when it was placed into S&P 500 mining index (click) and have mentioned it numerous times, including Monday. (click)

AVL Chart below, my advice is worthless, since I am not a financial advisor, so seek professional advisor before making any investment. This is not a solicitation, but it is a document of my observations from my (not all) perspective.

Tuesday, March 29, 2011

Syrian government dismantled, Libya mis-information everywhere

Syria


What I don't understand is how the Syrian government can be dismantled, but keep the leader? I don't see how true change can occur. My prediction is Syria will have another crisis in years to come.

Libya
I saw flash on the news today that Gaddafi is planning for his own exit......when I search the internet I find nothing about such an action. I see news about other governments PLANNING on what to do once Gaddafi is gone. Perhaps the internet is behind the TV? I doubt it.

It does seem that the rebel forces are not making as much progress as the media is touting. Perhaps the way Gadaffi eventually falls is when he can't pay his mercenary army money.

In any event, Libya won't ever be the same, whether Gaddafi recognizes this or not, its only a matter of time, money, and lives lost.

Once this comes to pass, the world can resume focusing on Portugal, Greece, and Ireland as next to possibly fall.




Japan, generation of nuclear radiation and USD nuclear bomb?

Back when the Japan tragedy occurred, I posted about the event with videos and pontificated, quote:



Well, here comes Karl of the Market Ticker calling for the same thing, but expanding it as possibly the trigger for massive sell off of USD in the future. Seems like great (or just paranoid) minds think alike, video below.

But I wonder if this does come to pass will EVERYTHING collapse across the board? All resources too? Such a deflationary collapse may be like air being sucked out of a building on fire. Dare I say, this time around big money may be ready to go to Gold as a safe haven, a temporary one. For gold is NOT MONEY (in my opinion), but it may be the last man standing in a collapse of such magnitude that it has never been experienced.

I hope, and think odds are against it happening, but something will happen once Japan sells, and China may, if so inclined, kick the USA while it's down.

Monday, March 28, 2011

This Week in Charts

First, let me start off with a stock I have extreme interest in, AVL.
Part of my interest is a bought a few shares at 3 bucks, and it hit over 8 bucks.
The other part is I have good faith this stock does well in the years to come.
Right now I am hoping it pulls back a little so I can add more with less risk.

Other than AVL chart, the rest is usual suspects. Nothing really exciting except looking to see if S&P500 can manage to go above 1330 range. Keep in mind the Supreme Court ruled AGAINST the Federal Reserve bank on keeping secrecy on their tax payer money games. I am not sure when they must report, but I believe its any day now.

To the charts!

Sunday, March 27, 2011

Demonizing, avoiding meaningful debate

Somehow, somewhere America discourse has lost it's ability to compromise or to focus on basics that matter. To me, a basic that is lost is concept of keeping government spending LESS than the taxes taken in. I don't think that has happened in the USA or state of NJ for 20 years.

Many like to focus on people and discuss their opinion on them. They spend effort trying to categorize and demonize people they disagree with, rather than spending time focusing on critical topics for the long term health of all US citizens.

A friend of mine directed me to a salon article (click) that does a pretty good job of illustrating how the Billionaire Koch brothers discuss their views. The Koch brothers apparently use their wealth actively in politics.

Quote below from article, I recommend going to Salon for the full read. The author does a great job of discrediting the Koch brothers depiction of Obama. As a side note, one that the article isn't explicit on, is the problems in the government IS what Obama, Bush, and others have been doing, appointing insiders in the industry they are supposed to regulate.

Ask Charles Koch what he thinks about Obama and he looks like he’s just bit into a lemon. "He's a dedicated egalitarian," Charles said. "I'm not saying he's a Marxist, but he's internalized some Marxist models -- that is, that business tends to be successful by exploiting its customers and workers."

David agreed. "He's the most radical president we’ve ever had as a nation," he said, "and has done more damage to the free enterprise system and long-term prosperity than any president we’ve ever had." David suggested the president’s radicalism was tied to his upbringing. "His father was a hard core economic socialist in Kenya," he said. "Obama didn’t really interact with his father face-to-face very much, but was apparently from what I read a great admirer of his father’s points of view. So he had sort of antibusiness, anti-free enterprise influences affecting him almost all his life. It just shows you what a person with a silver tongue can achieve."

So Barack Obama is a "dedicated egalitarian" who has "internalized Marxist" ideas in the Kenyan socialist tradition. Just compare that to actual facts. From The Huffington Post today:

Despite high unemployment and a largely languishing real estate market, U.S. businesses are more profitable than ever, according to federal figures released on Friday.

U.S. corporate profits hit an all-time high at the end of 2010, with financial firms showing some of the biggest gains, data from the federal Bureau of Economic Analysis show. Corporations reported an annualized $1.68 trillion in profit in the fourth quarter. The previous record, without being adjusted for inflation, was $1.65 trillion in the third quarter of 2006.

Many of the nation's preeminent companies have posted massive increases in profits this year. General Electric posted worldwide profits of $14.2 billion, while profits at JPMorgan Chase were up 47 percent to $4.8 billion.

Since Obama was inaugurated, the Dow Jones has increased more than 50% -- from 8,000 to more than 12,000; the wealthiest recieved a massive tax cut; the top marginal tax rate was three times less than during the Eisenhower years and substantially lower than during the Reagan years; income and wealth inequality are so vast and rising that it is easily at Third World levels; meanwhile, "the share of U.S. taxes paid by corporations has fallen from 30 percent of federal revenue in the 1950s to 6.6 percent in 2009." During this same time period, the unemployment rate has increased from 7.7% to 8.9%; millions of Americans have had their homes foreclosed; and the number of Americans living below the poverty line increased by many millions, the largest number since the statistic has been recorded. Can you smell Obama's radical egalitarianism and Marxist anti-business hatred yet?

Then there are those whom Obama has empowered. His first chief of staff, Rahm Emanuel, is a business-revering corporatist who made close to $20 million in 3 short years as an investment banker, while his second, Bill Daley, served for years as JP Morgan's Midwest Chairman. His Treasury Secretary is undoubtedly the most loyal and dedicated servant Wall Street has ever had in that position, while Goldman Sachs officials occupy so many key positions in his administration that a former IMF and Salomon Brothers executive condemned what he called "Goldman Sachs's seeming lock on high-level U.S. Treasury jobs." Obama's former OMB Director recently left to take a multi-million-dollar position with Citigroup. From the start, Obama's economic policies were shaped by the Wall Street-revering neo-liberal Rubinites who did so much to serve corporate America during the Clinton years. Meanwhile, the President's choice to head his Council on Jobs and Competitiveness -- General Electric CEO Jeffrey Immelt -- heads a corporation that "despite $14.2 billion in worldwide profits - including more than $5 billion from U.S. operations - [] did not owe taxes in 2010": an appointment the White House still defends.

Dateline report of China

I am surprised to learn China just passed America for manufacturing.
I would have thought this happened years ago.

This is a dateline from Australia, available on youtube. I recommend watching the video below, pictures are viewable by clicking here.

Or go visit these China ghost cities virtually, by using Google maps, click here. Very nice looking empty cities. I recommend when on google maps, hover over "map" icon, and enable photos.

Good info on China's empty cities, I have featured this many times before.
Good to see its hitting maintstream media finally.

Saturday, March 26, 2011

Marc Faber on Global Outlook

Two videos from Marc Faber on his latest view of global economic conditions



Mr. Faber states US dollar should face complete collapse by 2018, I am thinking by 2015-2016, but who knows.



Marc painfully dissects the problems of America.

Friday, March 25, 2011

Stock market trend

Between now and Monday, the US stock market will have some very interesting event unfold. We have the Supreme court ruling, the IMF tapping 1/2 trillion dollar emergency fund.

From a chart perspective, we are at a trend resistance, net stop is recent high.
I have to imagine the markets start to fail.....but by this time its pretty pathetic to even say this, since it hasn't materially since March 2009. 2 years of basically moving up is hard to call for a change.

To the charts.

Precious metals explode up Thursday, then fall....

So what happened? In an international market place, probably not able to blame anyone event.

However Thursday the CME raised margin requirements for Silver and many other commodities Thursday. And when you raise margin requirements certainly, the item will fall as people must sell their "max leveraged" positions to gain compliance.

This trick will continue to occur until there is no margin allowed, at that time, there will be no stopping the commodity bull.

But all you commodity bugs, don't worry, the IMF is here to pump prices much higher. Apparently the Federal Reserve Bank has noticed the USD is headed towards all time lows, and doesn't want to race THAT quickly to the bottom. So the IMF has stepped in and announced "activating crisis fund next week" to the tune of 1/2 trillion dollars. Reason, expected "Threat To International Monetary System". Co-incidentally, the Federal Reserve Bank lost a case in the Supreme Court and must release information about "secret" funding with banks since 2008. Throw on top of that problems with Ireland, Greece, Portugal, other insolvent countries, Japan's woes and we have a party!


I really have nothing to say about investing except some natural resources, 25-50%. I am in neck deep, but thats not for everyone. I may hit some out a bit in advance of the weekend, seems a bit risky at this point.


I have been reading a wack-job recently, still trying to figure out genius or crackpot. Most likely crackpot. He claims to have predicted currency issues in 1985 would happen in 2011. This same guy says June will be a critical point for precious metals, and gold will hit 5,000 an ounce no problem by 2016. To read up on him, Martin. A. Armstrong. He has the dubious award of one of the longest US held prisoners with no trial, makes him more interesting to read with such an honor.

Thursday, March 24, 2011

Market Volatility Likely within Days

The US Supreme court earlier this week rejected the Federal Reserve Banks request for secrecy on their "special" lending programs with banks.

The activity since the 2008 financial crisis has been performed without public transparency, under the logic that banks who sought help from the Federal Reserve Bank would be damaged by release of such information.


On the other side is the American People. The US government must operate transparently, as all taxpayer spending, to justify it's expenditures. Since the Federal Reserve Bank, a PRIVATE institution, is operating with the implicit/explicit guarantee the US government will back it's debts, they too must operate transparently.

The ruling is correct, and a little optimism springs forth for me.

However the release of this information is likely to produce volatility as the public absorbs the information. It is also possible it may be "yesterday's news" so who cares, and a registers for 5 minutes in the market as it moves on.

After all the market barely has budged even though Japan is badly damaged, Portugal's government is about to dissolve, and Ireland/Greece may spell the end of the Euro and those countries solvency.

Since none of this matters, it is quite possible the Federal Reserve release won't matter. But I felt it prudent to make readers aware that information is days away from release. My guess is this weekend, after market close, but thats only a guess.

It is likely no matter what is released, its good for gold as those who despise the fiat currency system find justification for buying more precious metals. I am 75% invested right now in precious metal miners. (GDX, GDXJ, GLD, many small miners, SLV, SLW, and rare earth stock AVL)


NOTE: I do not despise FIAT currencies, and do not believe gold is money. I do think Fiat system is closer to being a correct system over gold. But there is no question in my mind, current FIAT system is broken.

Wednesday, March 23, 2011

Chris Martenson


Chris Martenson has put together an EXCELLENT video series that I recently re-discovered and watched. It is in my new reader link as a crash course of critical topics.

I urge everyone to watch this series from video 1 to 10 before giving up if you cant keep your attention span.

Tuesday, March 22, 2011

Zero Hedge Roundup

The blog Zero Hedge can sometimes be a bit....extreme in some of its posts.
But I found a few good articles recently worth sharing.

Citi Recommends Buying Irish CDS In Advance Of "Nightmare On Kildare Street" - Basically Irish debt is going parabolic which equals, another government collapse. We'll see what Europe does.

Chris Martenson Straight Talk With John Rubino: The Damage Is Already Done - I don't highlight Mr. Martenson much on the blog, but I do feature in my "new reader" link his videos and link to his web site. Interesting read, highly recommend it.

JPMorgan: "The Likelihood That The Portuguese Government Will Fall This Week Looks High" - Hopefully if we have enough governments collapse, eventually the USD will reverse and gain value! Come on Libya, Ireland. Portugal, Greece, and a dozen more. Get busy failing!. The question is, once all the small players fail.....what then for the USD?

US Inflation On Track To Hit 8.3% In 2011 - To all retire's, fat chance you'll see an increase in your social security check to adjust standard of living. Get used to it.

OPEC Says Perfectly Happy With $120 Oil, Does Not Think It Will Impair Growth - Funny how 120 dollar oil was panic time in 2008...but now, eh, its fine! What has changed? Are global citizens more wealthy can can spend more for fuel (and all things that need fuel)? Or maybe...just maybe...Peak oil is real. Nah, common folk are clearly richer than spring 2008, so 5 bucks a gallon gas here we come. Alternately, maybe this is the first crack of OPEC with using USD as a benchmark, and expects US to continue to pay higher prices.


Monday, March 21, 2011

This Week in Charts - US Dollar to test new lows

If you have been reading my blog, you know that my concern of the US Dollar is high right now.
The USD has broken all sorts of support levels, and now its time to take the express train to the all time low. Once we break through that level, its really time for a US crisis.

Best thing to have is plenty of food, resources at hand, and to be invested in Gold, Silver, or related investments. This week in charts I highlight USD chart looking grim, at same time 30 year bond rates are resuming a climb, and gold is resuming it's climb.

This is not good folks, the worst thing for this country is loss of faith in USD. We are a country that lives off of everyone else through debt. I really don't think its time for the USD to fail, that is years off. But each new low will bring new panic, and new reactions, to staff off the decline.

Over this time period, being pure cash will be a loser. This can change on a dime, the solution is simple, stop spending 1.6 trillion in debt per year. how about....only 600 billion in debt? That would make the USD soar. (ya think 600 billion in debt would be bad, but its all relative).

Think of what has transpired this year, countries failing, Japan badly injured, China having inflation rates at about 5% PER MONTH (and China underestimates!).
With all the chaos, you would think the USD will rise....imagine if everything in the world was fine! How fast would the dollar fall then?

I think what we will see is a break, possibly USD down from 74 to 64, or 60. Then with some sort of knee jerk reaction, something will be done to stop the slide....and in a few months we'll revisit the lows, and make new lows. This will repeat until its all over or we get serious as Americans to cut the funny business out.

NOTE: I am not advocating buying gold bars, or go 100% into precious metals. For most people, 25% to 50%, depending on your risk tolerance, into Gold, Silver, Energy (oil), Food, and other commodities. Rest *SHOULD* be cash. Why? Because most people's debts is in cash terms (such as a mortgage). So even if cash goes down in value in commodity/international terms, it can still be used at face value to pay of existing Debt. PLUS Government entities will be watching USD valuation and intervene at some point to reverse (probably suddenly) the slide by taking action.
So cash, even if it is losing value, is low-risk in these terms.

To the charts! USD - breaking down, 30 year treasury rates, breaking up, and gold, resuming it's 10 th year of a continuous, non-stop bull run.

Sunday, March 20, 2011

Financial Sense Podcasts

Financial Sense news hour is by far the best economic pod cast I have listened to.
I flatly disagree with any concept that gold is money, but other than this one difference in opinion I have with the podcast, it is a great podcast to listen to.

I have put together a link to their recent great podcasts.

Jim interviews Stratfor’s George Freidman, discussing his dynamic new book, “The Next Decade: where we’ve been…and where we’re going”

In Rollback: Repealing Big Government Before the Coming Fiscal Collapse, Thomas E. Woods, Jr. explains that we may still have a chance to avert total economic disaster—but only by completely changing our understanding of government. With bracing candor, he dissects just how the political class has nearly destroyed America’s economy.

Bill Powers, editor of Powers Energy Investor, previously published the Canadian Energy Viewpoint and US Energy Investor. Bill has studied all aspects of the energy sector with an eye towards uncovering outstanding investment opportunities. He completes both primary and secondary research to identify small to mid-sized exploration and production (E&P) firms with strong value propositions, experienced management, strong balance sheets and growing production. With alternative energy becoming an increasingly important part of the world’s energy supply, Bill also considers established and early stage alternative energy companies worldwide.

Saturday, March 19, 2011

Austrian Economic view

Great videos I ran across when looking at the people who made the cleaver video about Ben Bernanke/Keysian economics vs Austrian. If you have seen it, SKIP the first video below.
If you haven't seen it, watch it, it will help keep attention to the economists interviews.

All videos are good, they do a good job trying to keep a dry topic interesting.






Keynsian view, GREAT video to understand the "religion" of Ben Bernanke

Friday, March 18, 2011

I broke my blog

I logged onto Google analytics to see how this blog has been doing.
To my surprise, not one visitor since Feb 20th. Not one!
I found this a bit surprising, since I have on occasion loaded this blog from work (talking to someone, show them a link, etc).

I realized, of course, I must have broke my link...sure enough, Feb 19th post titled "Modified Blog Layout".

Well, it should be fixed now, but for 30 days I lost all data about blog hits.

I am sure in a couple of day's I'll discover 1,000's of avid readers... :)
Moral of the story....Changing ANYTHING in technology needs to be tested. I work in software development, it amazes me that even I don't think to double check all things that could go wrong when you make changes.
Oh well, back to the financial blog.

USD breaks trend line

USD broke the trend line, even though Japan is buying USD by the boatload to prop up the yen.

In the last few months, countries have fallen, Japan has undergone a nuclear disaster and tsunami, and the USD STILL falls.

Imagine once there is no fear from other countries and things settle down in the world.....who will be running to USD then? The chart.

Round Two...Time to short?

2008 I still contend was an opening act, for a 5 to 20 year bout of economic turmoil facing the world, particular the western economies.

If the accounting rules in place since the Great Depression weren't suspended back in 2009, by now the markets would have bottomed, and we could start rebuilding.

Instead the markets are manipulated by changing the gauge used to measure health of companies. Further, the Central Banks have changed every conceivable rule to benefit the insolvent banks, to the point of purchasing directly the worst debt instruments to the tune of 1.4 trillion dollars, all someday to fall onto the US taxpayer to pay off.

The only wildcard now is, how does the problems play out? Another market collapse worse than 2008? Or maybe a collapse of the dollar, with resources flying high? Or something else?

I reflected today on the "momo" stocks. These are stocks that have flown high the last 2-3 years.
Maybe its time for the reversion to the mean. By no means am I suggesting shorting these stocks. If you do, put in an order HIGHER than the current price, and short only "gifts". I'd buy puts but of course, for this ride down, there will be no free lunches. the VIX is doubled in the last couple of months, so options are expensive.

For now, I am still long natural resources.....nervously watching the momos for a sign that the dam may break. I do have shorts in DECK, but thats it.

If you are long any stock that has superb gains, recommend putting in stop-loss orders in to protect gains NOW. Make sure to give "room" for wiggling, pick a level that you think today it won't get to.....so if it does your out.

To the charts!

Thursday, March 17, 2011

What happens if USD collapses

When I talk about USD devaluation, I get looks from people "that can't happen", "I don't understand", or more likely a change of topic.

A coworker even talked like I am expecting mass death of US citizens. I corrected him, many countries implode over the history of mankind. Greece used to default and become insolvent on a regular basis before allowed to join the EU. Argentina is a modern day example of having a countries currency reset multiple times.


I am not of the mindset that a collapse in the USD equals mad-max. America will reinvent itself, maybe for worse, but not be wiped off the face of the earth.
So my side obsession is placing what money I do have into investments that will retain value, such as commodities. The problem is, I have a hard time believing this year the USD will hit a true crisis. I do think its 2013-2017. So I am trying to be nimble, and I am not against cash investments.

Problem is, when cash is obvious to be bad, by that time gold, and other safe havens will be so expensive, level headed people will not buy, due to it looks like an extreme bubble.

I ran across a video that tries to illustrate an example of how the USD collapse may come to pass. I do agree with the video that China will be the key ingrediant to make it happen. As of now, China is "stuck" and cannot implode the US for fear of mass unemployment in China. Also, China's bubble makes USA bubble look immaterial. So they are hardly in a position to go popping bubbles.

But all of this will eventually get rectified in China, one way or another, and then they won't have any reason to NOT pop the USA bubble.

Or I can see a nice, orderly decline for US over the next 8 years with never a USD crisis.

In any event, fyi video, grain of salt, interesting.

Wednesday, March 16, 2011

USD Dollar heading lower?

My main concerns since 2008 hasn't been stock market valuations, but rather valuation of USD, interest rates for US long term bonds, and valuation of commodities relative to USD.

2011, we have seen several arab countries fall, and unrest increase in oil producers such as Iran and Saudi Arabia. Japan has been severely injured, calling into question their future GDP as a percent of global GDP, changing the economic landscape.
Japan has significant US Treasury holdings, and I am concerned as part of the rebuild in the years to come, they will accelerate their US Bond selling.

Today, the USD is at a crossroads, if it breaks down further, there is no chart resistance (historical level of valuation) except at the all time low set a couple years back at 74.

Once we break through 74, in my mind, the USD is NOT a good storage of wealth. I do have hope that the USD will break 74 and make a huge comeback. But as a friend once told me, best not put yourself in an investment position "hoping for a comeback".

Recently all commodity prices have come down. Gold did, but just barely, it is already firming up chart wise.

Here is the chart of USD valuation against a basket of other fiat currencies.
Notice, a breakdown from here will likely accelerate down to 74 quite quickly (chart wise). If we reach there, thats when I'll be panicking about USD, and holding tight my resource positions.

From WebSufinMurfs FinancialBlog2

Monday, March 14, 2011

This Week in Charts

Well, Friday's bounce was a surprise to me. In any event, it doesn't change the fact the market looks shaky to me. Everything looks shaky to me really, even natural resources.

But if you want to be in the market, I still contend food, Gold, Silver, and energy are best places to be. If I had to cut that down to top two, it would be gold and silver. Oil will continue to be very volatile between mid east and japan issues.

Why? Because in times of panic, I expect Gold and silver to climb. In 2008, the collapsed, I think this time around it may be the exact opposite. But really, who knows.

So hold onto a core position of Gold, Silver, both direct metal ETF's and miners. Keep an half an eye to either double up, or cut to the core position. But never, NEVER lose your core position.

The KEY thing to remember when looking at these charts is the USD, it is not gaining strength. That is a real problem, for what USD has had going for it is "everyone else in the world stinks, so US is better" doesn't seem to matter. Once that ace in the hole goes, watch out!

Anyway, to the charts!

Sunday, March 13, 2011

In honor of Stock Crack Addicts

Ben Bernanke and Charlie sheen seem amazingly similar to me.
Both talk with a core religious belief in what they say.

Talking about drugs and prostitutes in some sort of way to twist your a winner, and Mr. Bernanke taking credit for (artificially) inflating asset markets while ignoring natural resource prices is brazen.

I really find this Charlie sheen video funny. Nothing to do with investing, just fun, enjoy.


Saturday, March 12, 2011

Chinese Inflation and growth

Mish has quite a few good posts on China, his most recent is titled "Bloodstained Property Map and Trampled Rights; China's Population: 1.3 Billion; Construction Underway: 43 Billion Square Feet"
I recommend reading it and the links he provides.

I ran across a video from a news agency outside the US of some basic discussions of Chinese economy. China had apparently a 4.9% inflation in January. Rest assured if thats the Chinese published number, it has to be much higher.

Friday, March 11, 2011

Powerful Earthquake devastates Japan, Hawaii evacuation ordered

Powerful earthquake hits Japan, Hawaii evacuation ordered, other countries being hit by effects.

I really have zero clue how the markets react, I doubt the US market soars to new highs based upon this devastation. Japan is one of the largest holders of US bonds, the effect I have to imagine will be massive spending by Japan to rebuild in the years to come. I hate to think in these terms, but for investing, the effects must be thought of.

Because of such uncertainty, I put stop loss orders on many positions, for only 1/2 the position. I want to keep 1/2 as my core position. My rationale is risk of markets going lower is greater than soaring. But anything is possible.

Videos below of Japan. Let's hope American TV treats Japan with respect in the weeks to come, and not turn this into a 3 ring media circus. They will need much help, at a time when the US has thrown away it's capacity to borrow.

As I say this, here I go posting images. Ugh. Some videos below, and click here for a link of pictures as google records them.

Time to go pure cash?


Markets have made significant declines, and the overall trend from a chart perspective does not look good. We may even have a market crash due to recent events.

I'm still holding on, but with a twitchy finger. A key indicator to me is if the USD can press higher from here. The instability in the world makes it a likely yes.

Gold has taken it on the chin, again, any significant losses from here I may cut positions by 50%.
See recent USD movements, notice its at an interesting point. Good luck.

Thursday, March 10, 2011

Trouble in Saudi Arabia

Things may get interesting REAL quick. Saudi Arabia has long been known as a strategic ally with the US. Saudi Arabia has been credited with having oil production capacity to temper oil markets.

With countries in the middle east falling, by far the worst for the US to fall would be Saudi Arabia. Saudi Arabia warned it's citizens it would not tolerate protests.

So when the citizen's protested anyway...what does the police do? Why open fire on it's citizens.
This is NOT good. If Saudi Arabia falls, it will get interesting.

Some videos


Wednesday, March 9, 2011

Market topping indicator

A frequent call for tops and bottoms of the market is when the average person hates stocks or loves to buy them. Well, recently the markets are seeing people who where jittery about buying into the market since 2008 returning recently.

Once the average guy gets in, that is the exit indicator for big money. For once the average person gets in, it by definition is a top. There will be no one else left to buy.



Tuesday, March 8, 2011

Wall Street pay vs Teacher Pay

Very funny video, link from friend Paul Lomba.

The point being missed is the PRIVATE sector middle class has already been routed, and this is driving the debate by the public. I assume the start of momentum we have seen will result in significant change for public unions. But to what level is still debatable. I agree with Mish on his post, debate is a good thing, and status quo will not stand. Hopefully a complete decimation is not the result, but a sane middle ground is.

Monday, March 7, 2011

Charles Biderman of TrimTab

Why is the USD suffering weakness and why is the market climbing ever higher?

Good summary on CNBC from Charles Biderman of TrimTab.
Warning, Charles Biderman does seem like a perpetual bear since 2008, but so I have been.
And like Mr. Biderman, I have switched to going long, due to government fraud on the marketplace. For me, natural resources are a slightly better edge over other investments.


Different interview

This Week in Charts - US Dollar Showdown!

Well, it looks like the US Dollar is continuing to lose value.
What is utterly amazing is the middle east is destabilizing, you would think there would be a flight to safety, traditionally US treasuries.

But instead US dollar is losing value compared to a basket of other currencies. Further, US long term interest rates are rising. I wonder how bad it would be if there was peace in the middle east for the USD?

Well, chart wise, we better have a really big crisis, or else the dollar will start breaking through support from 2008, and once below 70, making all time lows. The chart below doesn't have a timeline, the last US peak shown was June 2010, as a frame of reference.

Got resources? Good! You will need them to keep your purchasing power.

Sunday, March 6, 2011

States in fiscal crisis

I stated this in fall of 2008, it is taken quite a while to become a public debate.
On the show This week, they featured a round table with state governors, a good watch.


Friday, March 4, 2011

Once again, technology to break inefficient systems

The advent of the internet, and computer based systems that provide efficient virtual stores and delivery processes are creating ways for companies to avoid state taxes.

Amazon.com for example, avoids taxation by states by not being located in the state is ships to. States with budgetary problems are trying to come after companies for sales taxes.

Kudos for Amazon to respond by leaving the state of any shred of presence in the states that challenge it. Recently Texas came after Amazon, so Amazon is shutting down it's distribution system in that state.

The net effect is people working at that location will be unemployed, and shipping rates to people in Texas are likely to go up if they buy from Amazon. The state seems to think because Amazon is efficient, it is "taking away sales" from local Texas businesses.

How IRONIC we have "Free trade" agreements with China, but not similar agreement between the US states.

Kudos for Amazon to lead the charge in breaking the states of relying on inefficiency to justify the cost of sales tax. Technology over time will break these systems, and state funding will have to come from different sources.

Thursday, March 3, 2011

imminent US Dollar crisis?

The US dollar has been building strength/support from a chart perspective since 2008, with the lower trend line illustrated in the first chart. From a chart perspective, if the USD breaks this trend line ,there is very little resistance from US dollar falling further. The crisis point will be 70.70.

Evidence of this is the PREVIOUS trend break, back in 2007, where the USD for the first time since 1971 (ever?), broke below 78.19, a low set back in 1992. In 2007, the US broke this level and entered a free-fall until a new low was made in March 2008.

During 2007, the US stock market made new highs, as valued in US dollars. Once the market made new highs, Oil continued to climb even after the USD dollar bottom was put in March 2008, until markets crashed in September 2008.

The USD valuation in my opinion as a key component in driving assets to extreme levels, both US stock market and resources. Notice that the USD rose rapidly mid 2008, and Oil still spiked to extreme levels, soon after the markets crashed.

The USD is currently at a level that is a critical indicator for the next crisis. Assuming the USD breaks the recent trend line, it will likely spark yet another run-away asset valuation somewhere. And USD will enter into a true crisis if it breaks the low of 70.70 set in 2008.

This is a very likely scenario in 2011. If this comes to pass, any economic recovery that is occurring in the US should be badly hurt.

It is quite likely Oil will rise with US dollar falling, but also quite likely that Gold and silver will rise much more rapidly. For in 2007-2008, speculators on overheating economies and tight supply of oil drove oil to new highs. In 2011, mid east crisis and currency crisis will drive likely both oil and gold/silver.

There is a second indicator, in the second chart, US 30 year bonds. The trend line dating back to 1985 is in jeopardy. I had previously posted that we broke this trend line, I was wrong. The tools I have don't go back to 1985 on a daily basis. The Chart Store has charts updated periodically, going back decades. From this latest long term chart, it looks like we are pressing on the downward trend line since 1985.

A combination of breaking cheaper bond rates combined with USD driving to new lows will provide a super-charged cocktail mix that should drive some asset classes to new highs. My bet is gold and silver will benefit based on previous posts. See "Time to play parabolic chicken" for investments I am interested in.

Losers will be those invested in longer term bonds, mostly over 5 year maturity. Also pure cash storage will be damaged ASSUMING the USD never returns to current levels. I think that this is quite unlikely, and instead what will occur is after a crisis occurs the USD will regain value.

This is the moment of truth, what I have been concerned over since the start of this blog, and more so since the fall of 2008, when I switched to gold and natural resources. Those invested in pure cash will need to count on USA doing the right thing to generate a sharp turn around in asset classes. I will be making the same decision, but only after gold, silver, oil, food, etc explodes upwards. The decision will be to get off the bullet train before a crash in resources......or not and keep resources to retain wealth in a spiral of USD failure.

I truly have no idea how this plays out, but this is why it is prudent to diversify into 25% resource based investments (or more).

I may be blogging in a month, crisis averted, from a chart perspective, and we have returned to the historical range. But March is likely to bring interesting events.

From a cycle perspective, Gary of the Smart Money Tracker also believes there is a high chance gold/silver and possibly other resources explode upward. Gary's view PRIMARILY uses broader market trend view of gold is in a bull run, where we are in a cycle for a commodity, and other factors.

The fact that my view of USD valuation and interest rates will drive a new USD crisis like we had in 2007-2008 is inline with Gary's method of timing markets makes for a very compelling story.

Good luck, and here are the charts, from The Chart Store.com

Wednesday, March 2, 2011

Gary Savage of Smart Money Tracker

Over the years, I have tried various stock market advisor services. I have pretty much given up on most of them. The one paid advice that I still pay attention to is Gary of the Smart Money Tracker.

I do have Elliot Wave International, McHugh, and I used to have Tim Wood of Cyclesman among other trade advice. I do listen to several free services still.

But for paid investing advice, I am really down to Gary. While I don't always agree with Gary, I agree most with Gary out of all of the services.

Gary was interviewed, and it's well worth a listen to what he has to say about Precious Metals.
I am a little surprised that he is down on energy, I see Peak Oil combined with Asia demand driving prices higher.

Click here to go to the Contrary Investor Cafe and listen.

Tuesday, March 1, 2011

China's Fraud economy and US Dollar valuation

Mish of the Global Economic Trend Analysis blog has recently posted a series of articles about China and US Dollar valuation. Mish frequently posts about these topics, but the recent series of articles together does a great job of framing a global complex system to the heart of what drives the China economy and US debt machine.

I highly recommend reading for everyone, since the US and the world are in a twisted economic death grip with China. Please keep in mind Mish tends to present that gold is money, and for this reason, I try to keep skeptical of Mish's analysis. Such a fundamental wrong viewpoint (in my opinion) runs the risk he mis-analyses global currency stress.

Articles to read, in order





And to my surprise, China is facing possible civil unrest?