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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.

Saturday, March 29, 2014

Whats up with Gold and Miners?

As readers know, I have been bullish on gold miners since GDX hit 27 on the way down to 21, and around 21-22, I loaded up on gold miners.

Recently when GDX hit 28 going back up, it topped and toppled quite hard down into this past Friday.

Gary of the Smart Money Tracker is pretty bearish, on the gold mining sector.
To Gary's credit, he keeps nimble and will change in an instant once there is momentum to the contrary to prove his view wrong.  Until proven wrong, Gary is bearish.  Gary has been more right than wrong the last few months, so I do give his opinion weight.

Tim Knight of the Slope of Hope is actually turning bullish.  Tim bought GDX with  a stop of $22.70.  Meaning if GDX violates that level down he will exit his position.   I put a video below to see his opinion on recent miner analysis below.

Also my friend and life-long day-trader Happy John is hanging in there, sticking to miners.

Me? I am concerned, not just because Gary says so, but yes Gary's weight does influence me.  I am concerned because out of a bottom I would have expected miners to be stronger.  The fact they haven't held up with gains is a concern.  However, if oil price drops miners should shoot up like a rocket.  After all miners biggest expense is energy.

The readers out there need to hedge bets, lighten up if GDX pops up to be prepared if GDX is beaten down below 21 ahead of the beat down, to be ready for the final bottom.

Corruption

I have posted that I will avoid posting about corruption because of the future effect it may have on me or family.  But after watching this video, I had to share.
This is clear that there is no law, and above a certain line in society.
If/When US dollar has issues, it has nothing to do with the deficit, although it will be spun that way.
It simply will be because lack of trust.

Crypto currencies backed by anything is not the answer

I published my thoughts on the next money system in post "Ideal form of Money - Power to the people".
Since then, crypto-currencies have become hot items, and a step closer to what I published.  However, it doesn't meet all the ideology I put forth.  But it is a crucial step creating huge investment to evolve the framework to what it will need to be to replace the current system.

This past week Crypto-currencies hit a huge milestone with the US IRS making a ruling on how they are to be treated, as property.  This on the heals of other statements indicating the US government will not impede crypto-currencies.   Crypto-currencies are becoming legitimate with regards to the current system.  As crypto-currencies become interwoven to the current system, a close eye must be kept on a clear separation of the two.

The next currency to replace the current debt-money system must be not be linked to debt, or assets for it to be the liberation of humanity.  Any linking to a central debt/asset class is a mere smoke and mirrors of change, when it will be the same old central control system.

Bill Still created a video on this topic, worth the watch if your interested.



Wednesday, March 26, 2014

Getting Bearish on Gold

Hopefully gold will rebound after the beatdown that has happened since the 14th.
I am really starting to get concerned that there will be a lasting rally out of this latest decline.

My intention is to LIGHTEN my miner positions, if GDX can make its way back to 26 range.
Of course, this is likely a read that we are finally going to rally to 30+, now that I am considering lightening my position.

But if we do have a deflationary collapse in the months ahead, or at best a negative market outlook, I can't see gold miners rallying to new highs.
Thats not to say I will go completely flat, I couldn't stand it if I am wrong.

I encourage subscribing to Gary of Smart Money tracker, his subscriber blog is calling for GDX hitting 22 and below.

Sunday, March 23, 2014

Technical Charting good for gold, good for miners, bad for bonds, bad for stocks

Ran across this video, does a decent job of showing chart technical's on gold, gold miners, bonds,  real estate.

The basic gist is once bonds start having interest rates rise for US bonds, stock market should get hurt and areas considered safe havens should rally.  Of course, we will all have to wait and see how this unfolds.
Below is a quick update of the 40 year trend for US 30 year bond debt.




Tuesday, March 18, 2014

HTM - Alternative Power

I have held HTM since June of 2012, announced in post 'Alternative Power as Investments'.
Today, HTM took off like a rocket ship, delivering impressive gains.

I looked, the only material news is HTM announces profits on March 25th.
So unless some news leaked, this maybe a flash in the pan.

However, figured I'd share the good news for this longer term hold.
I wouldn't be surprised if it cracked through 1 buck tomorrow.


Thursday, March 13, 2014

Tuesday, March 11, 2014

Is US Dollar Under Duress

Its no secret that America's luster has been tarnished since 2001, and arguably since Nixon.
With (Russia) Putin's Hubris, and China's economic duress, either acting aggressively to take down the USA is not out of the question.

USA has had the benefit of being the world's reserve currency since World War 2.  This benefit in the last decade has turned into an albatross.

No matter what the USA has done with it's finances, the world adjusts it's currency valuations to ensure their currency parity is in line with what politicians and economists believe is a health exchange rate.

Even countries, like Russia, who may prefer USD to falter, are compelled to be compared by the US dollar since their trading partners do keep their currencies locked to USD.


The net result is the USD has had it's valuation tied to its trading partners, and in turn countries that don't want USD to be world currency reserve have no choice but to maintain parity.

However, we are starting to see some unusual pressures continue to build.  I posted previously on various countries having local currency problems.  That combined with potential with aggressive countries may look for an opportunity to attack the US dollar standard puts America at risk.

Further, a market PREVENTED to freely trade by suppressing interest rates, changing accounting laws since 2009 in place since the great depression, giving banks 85 billion dollars a month (yes giving) for 2 years, and other aggressive measures will have an unintended consequences.

What I fear is a USD decline that once it hits a certain point, a run for the door will happen.
If/when that happens everyone will be trying to put their money into assets to stabilize their wealth.

Natural resources, and now crypto currencies are good candidates for storage of wealth.
Now to the charts, lets take a first look at the US stock market, S&P 500.  Does anyone believe the economy is stronger than 2000 by a longshot? Than 2007?  If you don't then you must ask, how can the market be valued this high?  Answer is simple, accounting rules changed and various unintended consequences of free money.

 toda

Now lets take at look at US Dollar valuation since 2000.
Hmm, the US dollar was 50% higher in 2000 than now.  At that level, a market at 1500 in 2000 is equivalent of 2,250 today.  So we have not yet broken the highs of 2000 even though the first chart indicates we have.

OK, so we get it, USD is lower, market looks higher, but in real valuation it is not.  Big deal right?  Things move around.

Now lets take a look at US 10 year interest rates, notice we hit a bottom around June 2012, as I posted back then!  It was a golden opportunity to bet against US bond values as we hit.  So far that was a correct call.





Lets take a look at Gold, old school alternate storage of wealth.  Remember I HATE gold = money, but it still needs to be raised here:

Gold has been recently rising since end of December.  Also gold is near its long term up trendline.  Notice the 25/50 weekly SMA lines are starting to turn up, if they cross it usually means the asset is on an upswing.  But we are no there yet.

What about Bitcoin? Despite its original exchange blowing up and going bankrupt, its valuation is holding steady, dropping from 800 to 650 from the scare. Not bad for something that just recently exploded from 20 bucks to 1200, going to 800 before the crisis hit.

So what does this all mean?  The market is going higher but still hasn't surpassed the USA wealth of 2000, not by a long shot.  The USD if it ever crosses below 70, it is a very strong indicator we are in a new world, probably an epic crisis, based on USD valuation over last few decades.
US Interest rates may have bottomed for my entire lifetime in June 2012.  If the rates break out of the range we are in now up, we can see a generational shift from decreasing costs of debt to ever increasing costs.
Gold is still trending higher, relatively stable since before 2006 with a nice steady rise.    Bitcoin for all the shouting about its a crackpot scheme has been fairly well.  No where close the reaction the US economy had with the bankruptcy of Lehman brothers.

One thing should be a takeaway, the market valuation ever higher is an illusion considering how much money is being pumped to prop it up compared to 2000.  The USD value alone tells a story about USA wealth.  With rates seemingly past the least costly in 60 years, Gold and Bitcoin holding well, the USD may be headed for troubled waters from its enemies.

Good luck

Tuesday, March 4, 2014

Gold, Bitcoin, US Dollar, and the Ruble

Below is a summary of stores of value that is in the news, gold, Bitcoin, USD, and Russia's ruble.
The moral of this story is all storage of wealth is relative.
To the charts!

Gold Miners

Back on January 26th I posted Gold at a Crossroad. As readers know, I don't buy gold or gold paper, but gold miner stock. Since that date, GDX has risen from about 23 to 26, a little over 10%, at best 15% from low to high in that period. So while 10% is not that big in the scheme of life, its pretty big for a sector beaten to a pulp since 2011. Of course, the magic question is, will it continue.

Bitcoin

Bitcoin ran into major issues when gtmox started to fail a couple of weeks back, with bitcoin spiraling from 820 to about 540 a coin.  Bitcoin shaken to the core has held up pretty well, considering it is not even a currency!
I should have my first bitcoin tomorrow, already up 20% in a few days.  Reports of bitcoins death is insane, its here to stay.  Overstock predicts before years end, $20M in sales through bitcoin.

US Dollar

The US dollar is under constant attack from arm-chair economists, I see nothing of concern according to the charts.

Ruble

Well, the Ruble is not having a fun time, there is active intervention just publicly announced to stop (yea, right)  to hold the ruble's value.
Who could have seen there may be issues?  Well lets look back to my post Global Currencies Showing Strain.  Granted, the Ukraine issues have accelerated Ruble problems, but its no shock to me there is an issue here.  Lets look at the Ruble value over last 10 years, there is no question the Ruble is under strain vs USD, hitting lows not seen 2008 crisis.