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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.

Thursday, February 28, 2013

Economic Disruption 3d printing

I have posted before about a collection of new capabilities that are emerging that I believe is a funamental shift in small business and manufacturing.

You can read the post here titled American Manufacturing Revolution

This video does an excellent job to tease your mind about the disruption that is ahead.
Don't believe the hype? Look at all the industries that have been dwarfed by technology in the last 20 years.
Enjoy the video

Tuesday, February 19, 2013

The Building of an Epic Rally

When a sector of stocks plummet, they have two destinies.

One is the sector has shifted, one to a long term lull that will wiggle around at a level substantially lower than   before their decline.  This is a common pattern.  Think of gogo 90's for tech, and after the bubble burst, although some tech has done very well, few from before the boom recovered their all time highs.

The second is selling exhaustion.  One has to look back to March 2009, when the S &P index hit 666.  Around that day, I did a post called Preparing for Anarchy, and a post only a couple of weeks later The Bull is here.

In Preparing for Anarchy post, it was a bit of tongue in cheek that the market was very unlikely to continue downward.  Reflecting back, it is obvious what happened that month.

Whoever sold at S&P 500 hitting 1000, then 900, then 800, then 700, well, anyone who could hold onto their longs are the same people who would hold on if S&P 500 hit 600.
Basically, overall the market ran out of sellers.  There was left only the people who hold and those who bought on the way down.

Looking back, I wish I really dumped my entire life savings and borrowed money to buy the stocks from my post just one day before to preparing for anarchy post, called "time for lottery tickets".

So what does this have to do with today's market?  In 2008 crash, the gold miners crashed WITH the market.  Now, they are taking, rather hard core, (GDX at 39.37) when the market is rallying.  This is very unusual.  The market sentiment of the gold miners after watching for years it do really poorly, now doing extra poorly.
Frankly, this is the time when the sellers are running for the door.

What I am expecting is the same thing with miners, at some point the sellers will be few, and that will build a base for a multi-year rally.  

There are two very unfortunate realities around this statement.
First, it may not happen, precious metal mining sector in its entirety could go the way of long term lull.  I don't think so, but it is very possible.

The second is we maybe in for a CRUSHING sell off, one with a market decline.  This would mirror what happened in late 2008.  The miners got crushed, and then started to rally AS the overall market got CRUSHED worse into March 2009.  

So its easy to look back and say, boy I wish I bought those lottery tickets, or bought options 3 years out to make a killing.  At the time of the crushing sell off, there are three kinds of people.  Those not in the sector, those holding blindly, and those trying to trade and find a bottom.

Any of those 3 options may be the best strategy, depending entirely on the next two years for the sector.
Your guess is as good as mine, I think hold is better than dump.  I don't see this sector as dead, I still believe in my post The Big Picture.

Ps. Special thanks to Gary for a similar post, for sparking my own twist.

Wednesday, February 13, 2013

Saving Money in Shopping

There are several steps that my family takes to cut costs for supplies for the home.
We buy primary supplies from wide variety of places.
Cheap is good, but quality for food is more important.  I'd rather eat meat from a better supplier than from the most factory treated cattle.

Taking this into consideration, below is where shopping is done.
I may post a page on each store on what is primary purchase to find lowest price.
After all, a 10% (or more savings) is huge compared to interest you will get on savings (often 1%)

I'll update with links on good deals at each by enabling links. (Amazon only currently)

Barths Market- In my home town, highest quality meats, combined with AMEX blue card, 6% cash back
Shoprite   - Primary food, combined with AMEX blue card, 6% cash back
Target      - House supplies, combined with Target 5% cashback Credit Card.
BJ's          - Bulk supplies, combined with AMEX Fidelity card, 2% cash back
Amazon    - Subscribe & Save, combined with AMEX Fidelity card, 2% cash back

Also, look for good deals and make occasional purchases that take precedence.
Look for deals at Woot.com, Dealnews.com. Coupons at Dealcoupon and Wow-Coupons.

Amazon Shopping

This post is part of Saving Money in Shopping Series.
I am continually looking to increase my purchases from Amazon.com.  Amazon has many items at rock bottom prices that beat or at least match lowest prices available.

To maximize savings, we buy items under the subscribe and save program.
Any item bought on subscribe and save automatically gives a 5% discount AND automatically free shipping.
As of February 2013, if you ship 5 or more items under subscribe and save for a given month, you get 15% discount on all items. (some items excluded).  For additional savings, use Fidelity Amex card and get 2% cash back!

I have a list of many of the items that we purchase from Amazon under this program.  The prices listed ASSUME the 15% discount applied.   Feel free to post in the comments of this post to call out cheaper alternatives.  However, some of the items are more costly due to higher quality.  For example, instead of imitation vanilla extract, we want real vanilla.

I'll try to update this post periodically.  Subscribe and Save isn't as easy as I'd like, prices and product aspects can change, so you must keep on top of your shopping list. Some below I may be grandfathered into an offering that isn't available today.

Saturday, February 9, 2013

The New US Economic unReality

Many may pontificate about the market direction, hard resource valuations, the effect of debt, health of nations, or any aspect of the financial reality since 2008 crash.

There are many things that make a marked difference between 1980's until March 2009 and from March 2009 to today.

First, the accounting system using fair market valuations was dismantled in 2009.  The REALITY is the measuring stick between 1980's until 2009 is not the same as we use today. Therefore if Mark to Market accounting has been suspended, we are valuing financial institutions on what those institutions say assets are worth - not what they are worth if they where sold.  This alone distorts the reality of corporate health, and there is no hard-date to ever return to the gold standard of accounting - recording asset values for what people would pay for them if sold.

Add to this, that US Government statistics are being distorted, the very basis for many financial decisions and financial guidelines.  For example, official inflation alters the income of disability, and social security payments. (and many other social programs).    I already covered how inflation is being routinely changed, in effect changing the measuring stick.  Also, it is widely covered how unemployment numbers are continually being adjusted, distorting any reality of the unemployment rate.

Throw on top of all this the recent scandals of the global interest rate (LIBOR) used to determine most loans has been discovered to have been gamed for years.  This affected literally trillions of dollars of credit.

Throw on top of that the Federal Reserve Bank is making routine purchases of debt, and lending (giving) money to foreign banks to the tune over 230 Billion dollars in the last four weeks alone.

Looking into the private sector, we have Nobel Laureates such as Paul Krugman who have only one drum beat, ignore today for a better tomorrow.  I hope the most ardent fans of such approach are starting to question the one-way mantra for decades.

Throw on top of that nations like Japan having their government directly taking over direction of central banks to promote monetary policy for the government direct benefit, is an outright attempt to shape their own reality.

All of this speaks to how we are in a new reality, the unreality from my life experience.  Under such a new reality, any market musings are futile.  The sticks to measure at every fundamental level are not reliable.  The will of the private and government sector is to promote distortion.  The one reality that does exist, is we are divorced from reasonable capitalistic controls.

May this bring a bright future, well, atleast for the people who this new reality is their reality.  For those who resist believing and take the red pill, I continue to be concerned.
The one item that cannot be forever manipulated is resources.  An example of how governments cannot control those valuations is seen repeatedly in history.  Every government that has tried, has failed.  That is an impressive failure rate.  For the latest attempt, one has to watch as Argentina implodes in 2013.  My only glimmer of hope is a privatization of money, which should bring on a new prosperity  for the next millenia.

Wednesday, February 6, 2013

Anonymous, Extremists against the FRB

There is an extremist technology based terrorist group out there called Anonymous.  This group has launched  various small attacks against the Federal Reserve Bank to give visibility to their agenda.   While I agree that the current global fiat currency system has issues, I do NOT view this as a conspiracy to oppress the world.

In reality, centralized systems weakest link is, they are centralized.   Centralization stifles innovation, in effect evolution.  Centralization magnifies mistakes they make, as the people part of the central authority will over time, align with like-minded approach.  In the current Federal Reserve Bank, there is no question that overall the entire establishment believes in the mantra of Keynesian economics.  When a body of people follow a methodology, a religious like belief system, their decisions become extremely prejudice.  They are responding to a problem with 'What they know'.   That is what we are witnessing.  I am NOT a believer of Conspiracy theories.

Anonymous launched an attack and breached the Federal Reserve System, announcing it on SuperBowl Sunday.  I am of the belief while a black eye on the Fed, I really doubt there is any information they retrieved that has any remote effect on the security of the country banking system.

Anonymous, assuming they believe what they say, are unfortunately, misguided in their approach.  I believe they are likely young, under 30 years old, and view themselves as helping save the future for themselves and others.   What they don't realize is their attacks will have the exact opposite effect.  The Federal Reserve Bank are the established, lawful, and community supporting entities, and Anonymous are the rogue terrorists.

And I actually believe that this view, is a correct one.  Anonymous is the problem.

If their acts moved away from concerning of the current framework, and focused on a better framework, as I describe in my post Ideal form of Money - Power to the People, then they could help provide a solution to a system that will fail to competition of a better system.

If they actually triggered a situation by their acts, a run on the banks, they will create kaos and much death.  I'd like to not see that please.  I'd rather transition  like people did with Music, Video, Software services, tablets, smartphone, and other tech-era revolutions.  Some can stay on old, some will move to new, and eventually the new takes over, replacing the old.  That is a transition I'd rather face.

Same goes for the protest group called  Occupy WallstreetStop protesting, and get on with a solution.

So if you follow these guys, this time, don't root for the under-dog.  Root for the old system, The Federal Reserve Bank, until something better is obvious.
Notice in video below how they combine what I see, Commodity Costs increasing, currency crisisbut their root is the evil conspiracy people while my view is, the world is evolving.  Its nice and simple to view bad guys are holding back paradise.  The reality is people do what they think is net best for them and others (in that order), given the construct they have to work with.  Notice they want to punish selfish people, supporting this is supporting global extinction.  Humans are selfish, its called self-preservation.

Tuesday, February 5, 2013

Amazon to issue currency

The title is overstating the reality somewhat, but Amazon is taking its first baby step to have it's own virtual unit of value, in the form of Amazon Coins.

I welcome this huge milestone, where I hope a swarm of competitors enter the arena.  Through heavy competition a new, trusted value system may emerge, one that could compete with traditional government fiat currencies.

The current incarnation is not remotely in the same league as a government fiat currency.  I am sure its goal is to play some shell games to drive sales and usage of Amazon services.   

In January 2011, in post Ideal form of Money - Power to the People , I describe my ideal of what Money should be.   I quote:
I think what is required is to allow any company to create a system, using open review and process, to be a viable storage of wealth.

Amazon, thank you for putting your toe in the water.  If we do see tech starting to create their own version of bitcoins (the current premier outside currency experiment), this will be the weapon that will bring down gold, silver, and precious metals as an option for currency.  By the way, bitcoins seems to be getting traction, and it's virtual currency is up about 50% since January 1st alone.  However, this is likely heaver speculation and hoarders appearing.

What we will see is a movement from Precious metals ( 1930's and earlier), to leveraged precious metals (mixed fiat and precious metal ratios), to pure government fiat currencies (Nixon), to community based-trust currencies. (social/technology driven)

If this can happen the transition will be very painful, but on the other side I believe rampant economic growth to take hold, globally, as a trusted, controlled, transparent, competitive currency system gives business the confidence to move ahead.

I am getting waaay ahead of my self here, any electronic money system to gain traction is likely to occur after the global currency crisis that looms ahead.. (2017?).

I am putting this in my Financial Ground Zero series.  This is not contributing the the future crisis ahead, but will offer a solution to the crisis.

Monday, February 4, 2013

Canary in the Coal Mine - Japan

My friend John said years ago that Japan is the Canary in the Coal mine to watch.   Japan's demographics and extreme deficit spending makes it worth while to watch.  They are in effect ahead of the US trajectory.

Unfortunately, I believe if Japan enters currency crisis, a vortex over the year following will take with it other countries not too far behind it. I am not predicting that Japan enters a crisis, (2014-15?) merely stating that if Japan hits a currency crisis, this will be the beginning of what I feared all the way back in March 2009. (about the bottom of the market)

The decision to transfer all risk from private to public, put the public financial system at risk.  Since money IS about trust (work done today, will be paid back tomorrow), once trust in the system hits a tipping point, it will get ugly.

Japan recently announced basically an all out currency war, pledging to break the yen.  While the yen is not yet broken, it has had a nice decline rather rapidly.  It has lost valuation, wiping out 2.5 years of gains in months.   If Yen reaches below 0.0083, in my mind, its game on for currency crisis.

US Dollar to Yen Exchange Rate Graph - Feb 6, 2003 to Feb 1, 2013

Safe havens for a possible currency crisis are going to get severely slapped around.  As tensions mount, I expect safe havens to fall, not rise at first.   Even once the worst has past, the safe-heavens should remain under brutal assault throughout the currency crisis.  There is no free lunch, and no easy way out.  A currency crisis will shake the very foundation of everything, and bring on an era not seen since the 1930's.

The last great depression got started the same way, loosely speaking.   A huge credit bubble, credit burst, currency war, then depression and world war 2.  I obviously hope we will avoid WW 3, and at this time don't expect it.

I do have optimism overall.  I believe we are seeing a massive redistribution of capability starting, preparing for the new economy after the worst has past.  I am re-iterating my doom and gloom call for USD until 2015-2017 time period, more likely in 2017.

Gary of the Smart Money Tracker has more to say on this topic, recommend subscribing to his service.

Sunday, February 3, 2013

Future Tech - The Double Edged Sword

I have written about the perils we are facing with bigdata and new technologies that will result in having your online history follow you, and held against you.

In the future, law enforcement will have Google-Glass type technology merged with face recognition and instantly see verbs about you.  For the first time ever, your decades of data will be instantly available to anyone with the technology on you.  Instantly see who are your friends, relatives.  And not too far away, to see who is the closest person (proximity) to you that you are connected to.

I recently ran across the video I saw years ago that brought this technology to my attention.  Since I haven't seen it years, I wanted to post this video and the Google glass video for your viewing.