Moving into Natural Resources

I exited my Federal US bond fund inplace since January 2007 today.
I am moving into natural resources over the next few weeks.

I am convinced that Europe will print, USA will print, China will print, and the rest of the world will follow.
I am not calling for hamburgers hitting 100 dollars each.  I am calling for a rebalancing of a more equal distribution of the world resources, away from the west and more to the east.

Oil, Gold, Silver, select food, etc will all rise relative to USA past experience.

Even if I am right, the move I am making will NOT properly compensate for the future world, but it will help.
This isn't a mad-max prediction, world war 3, or fall of US government.


Simply put, China and India will get net richer 2.4 billion people, and US citizens will get poorer, 300 million, relative to each population.  Natural resources are one component to gauge the new reality.

Also Gary of the Smart Money tracker is bullish now, I strongly recommend signing up for his service.

Good luck!

Commodity Market - Is the bull back?

Back on March 24th 2009, I declared the Commodity Market bull is back.  We may be close if not already at the next bottom poised for the next leg up.  The upward exponential drawing below of course may be materially wrong, but it should correct quickly whenever bottom hits.

Timing of course is IMPOSSIBLE!  Catching falling knives is very painful.

Investing in this sector will only marginally help offset the cost of living crunch everyone will continue to face once the bull resumes.  This is inline with my 2008 post of global consumption squeezing the American consumption.

Back in 2009, the graph I showed was the standard CRB index.  What I didn't realize at the time, like most indexes, it is changed over time to re-prioritize weighting of the underlying components.   The previous revision to this index was more evenly distributed across all resources.

Although weighting differently may be more meaningful, it does skew the graph unfairly.  When an ETF composition is changed to be "fair" the entire index should be recomputed back to the start of the index to reflect a graph that has the same underlying funds consistently.

That however is not done.  I found an index where the composition was NOT changed with the last revision,  called Reuters Continuous Commodity Index (CCI).   The chart looks materially different than the current CRB index.

I believe that keeping the same mix of items is more realistic to show the impact of commodity prices.
Look at the chart below to see how even in 2008 crash, the bottom BARELY touched the high in 1980!
This graph shows what I believe is a more parabolic price change that we are experiencing.  Some deem it inflation but wages are not rising.   I deem it simply what it is, commodity prices are rising.  This is NOT about strictly US dollar debasement.  It is about poorer countries buying more commodities driving prices up for Americans.  Countries like China and India simply did not compete with Americans for resources 30 years ago as percent of purchasing.  Also consider watching Chris Martenson on exponential growth and commodity issues.

The only question is, how far does it go down before the trend of up up up resumes.  Strap on, for whenever the next leg up starts, it won't be fun.  High unemployment AND rising costs.

Usual suspects to invest in.  OIH  , DBA, GLD, GDX, etc.  The ETF GCC tries to mirror the blend that the CCI presents.
(UPDATE: 6-28, end prices.  GDX-43.30, GDXJ 18.20, OIH 34.30, DBA 27.77, GCC - 27.55, TAN - 17.74)

Europe failure could trigger global depression

The Euro is not a true currency, but is a currency peg.

The euro was doomed to fail in it's current state the moment it was created.

Will Germany agree to debase the Euro and therefore Germany helps pay the tab.

A great video with Chris Martenson making the call Europe will print and Germany forced into this path.

The only question is will this happen before a true global crisis or will 2008 repeat?
Chris Martenson is author of crash course I have featured before.

Well worth the watch, first 15 minutes of each video,

Martenson on Fiat Currencies, exponential functions, and energy crisis

Solar, buy low sell high

We are likely about to enter a recognized recession, that may last months or years.
If years, buying anything right now in the market is not a great idea, markets can go much lower.

However, many industries are already slammed hard, like solar.
The ETF TAN reflects 25 solar companies, and FSLR has been brutalized.
For longer haul, if you think solar has a future, TAN is pretty cheap at 17.90 compared to 300.

And of course, I still love OIH (oil ETF) at this range.
Time to start nibbling OR we may have a deflationary collapse bringing all stocks much lower. (well worth the WATCH!)
But if we don't here is pretty cheap.

Don't forget my disclaimer!  I am throwing darts on a dartboard, any trading is up to you.

Europe is a Giant Ponzi Scheme

Good watch on Euro is not a proper currency, and the government debt bomb.




I am starting to think pure fiat and no bonds is the only way out....but of course it wont be done right and will lead to worse things.

Giving opinion, is it worth it?

I have posted before about some concerns about blogging some of the political aspects of the topics before. What I find most disconcerting in the years ahead, police will be able to sweep a room and using face recognition technology to associate me with things I posted....anywhere.....ever.
In effect the posting on the net will put me into different categories, one of which may plop me into "anti-XXX" or "radical", etc.  That future cop will likely be WAY less open minded than I'd like.

I could delete this entire blog today, and it would make zero difference.  Everything is backed up, archived, and indexed.  I could even change as a person to the core, heck, I could be one of the worst people I rant against today someday. But the internet scan will not take this into account.  

I used to hear in high school behave or "it will go on your permanent record".  Like anyone looks at such a thing.....  But the internet EVERYONE looks at it!  Even a future employer.
A simple search on WebSurfinMurf reveals WAY too much about me that the random public should not have.  Its a pretty small jump to find out my real name from there.

I had a super tiny altercation via email on an opinion with a friend today.  It amplified to me that if a friend has such a radical reaction to relegate me to crazy.....what about people who find offense about my postings on Goldman Sachs? Financial Companies? US government? Current or Future employer?  Worse yet, for my son's future college or employer!

I am in effect, playing with fire posting ANYTHING that could offend against my future self.

Therefore, I am going to try to roll back severely my rhetoric.  I did a notch back in 2009 when I realized above, but I didn't turn it down enough.    I want to cut this blog back to more dry facts and avoid calling out opinions on corruption, or specific companies issues like Goldman Sachs, etc.

I'll continue to report on Money, USD, Fiat Currencies, bonds, and some other topics along these lines that are controversial.  These topics are  the next crisis and it  too important to not contribute to the social discussion.

I am adding this post to my corruption tag, so it can show when I tried to tone it back.
I urge people to read Mish and Market Ticker, for they do not pull any punches.
 10-24-2014 - see update 2013 Giving opinion is NOT worth it

Sports News vs Financial news...whats the difference?

I watched this video of a football player, Mark Cuban, chewing out ESPN news casters on the lack of depth of coverage.
Much of what he calls out is exactly the same across all US news.

No depth, all fluff and spin, a great mini-tirade.

Social Media Comes to Stock trading

Absolute brilliant idea from the Slope of Hope, creating of a social site, akin to facebook and other social sites, for stock trading.   As for how helpful the platform is, not sure yet, but well worth a look.

To learn more about Social Trade, watch the video below.

Chart state of Gold, Silver, Oil. Time to buy?

Lets recap from my view on the events around natural resource pricing in the last year or so.
On August 1st 2011, posted that a market crash may be around the corner, this was based on the long term weekly trend lines, in post This Week in Charts.  S&P was about 1300, just off the high of 1350.
Then August 8th posted about not panicking about US debt downgrade. The market low was the very next day and the market hasn't returned to that level since.

I started to get nervous on August 18th, sold longs 9-1-11 in post know when to hold them, know when to walk away. Then made it official with my 9-11-11 post down market ahead in charts, 9-15-11 posted about gold down ahead in Gold Break Trendlines.  Then added a bear icon added to the top of this blog on 9-18-11 in post the Bear is Back.

Since then I have been very nervous about going long just about anything.  A few times posted nibbles on natural resources.
Little bit on gold and silver on 10-26-11, in hindsight way to optimistic.
Little bit of GDX on January 26 at 55, with stop of 49 (triggered)
Little bit of GDX and GDXJ at 46 and 21 respectively on April 26 12.
Finally a timid (should have been more aggressive) in post Decent entry for miners.  GDX at 40, GDXJ at 18.50.
So here we sit with GDX at 47.73 and GDXJ at 21.13.
To date all buys since April 26th have been vindicated as good buys.  Lets try again at future telling charts.
I look at these charts and see building blocks for movements higher.
I am cautiously moving from my natural resource timid attitude as of 9-1-11 to a resource bull now.

Don't forget my disclaimer, I am an idiot throwing darts on a dartboard, invest at your own risk.

To the charts!

Very funny if it wasn't so sad.

The Colbert Report
Get More: Colbert Report Full Episodes,Political Humor & Satire Blog,Video Archive

Discussions on true financial reform

Ran across this former Goldman Sachs employee talking about true financial reform.
Refreshing to talk frank about there is a true issue here.
Wish some solutions are offered, but recognition is a great first step.

Quick 15 minute watch.

Time to buy more resources

We have seen one answer in in the last 20 years by central banks to resolve all issues....print print print!
Europe is on verge of falling apart, deflationary pressures are all around.

Do you think that the central banks will wait like 2008 and react after massive collapse?
Would they RISK another 2008 by waiting too long?

Yep its possible, the only question is it more probable?

Hedging on the probable, good time to follow up on my May 20th post to buy more miners.   At the time GDX was at 41.50 and GDXJ at 18.50.  Now they are at 46.93 and 20.71 respectively.

Others to consider is SLV (silver) GLD (gold) and OIH (Oil companies.

Good luck!

New Jersey bucking recession

I don't know the details of the numbers, but apparently New Jersey in May added 25% of the TOTAL new jobs created in the country, at 17,600.  I am not sure if that is a slap on the country low job creation, or a huge plus to living in New Jersey.   Of course, out the 17600 jobs, quite possible 17,000 pay less than 10 bucks an hour, so the devil is in the details.

Gov Christie gets to crow in his speech about NJ.  Christie maybe a thug, but got to give credit when due.  Question is, what will the numbers look like after the Federal government revises numbers like it always does a month or two later?

Pending European Union Failure

The European Union in it's current state was doom to fail the moment it was created for one simple reason.
The Euro which it is based on, is NOT a fiat currency.  It is a fiat currency tied to economic shackles on countries.  I say shackles for countries like Greece could simply print more money to pay their debts.  Granted, their currency would devalue, and their interest rates to borrow abroad rise.  But that would be the 'gentle' and to force Greece to improve their economic imbalances.   One way that would happen is in a currency devaluation is to NOT increase the salaries and payments to bankrupt social services.

They would in effect re-balance their budget through currency debasement.  Granted it is a very ugly way to do so. The right way would to get some adults in the room and balance a budget.  But since that is no longer possible, then currency debasement is next way to get there.

Spain, Greece, Ireland, Portugal, and others are all insolvent, unable to keep their debt ratio in line to belong to the Euro currency PEG.

A great rant by Nigel Farage once again about the reality and pending failure of the Euro.   There is an out, give up on balanced budgets and print print print.  But Germany in effect will be looted, the question is, are the German citizens going to allow it to happen?

Bernie Sanders Quote

I don't really know much about Senator Bernie Sanders.  I ran across the image below and wanted to share.  What infuriates me about this nice sentiment he has is the lack of accountability for financing wants, as well as portraying his constituents as victims.

The first two sections wage a moral and political war against billionaires.....against the gross wealth and income inequity
Lets NOT wage a war from rich to poor, that solves nothing.
Lets simply ENFORCE EXISTING LAW, and have HONEST ACCOUNTING.  Do those two items, and equality will result.  No venom required, no draconian retaliatory laws.   Bernie, the only victims here are the same masses that you want to defend don't mandate immediately for law enforcement.
 Watch this video to understand the drastic nature of lawlessness we live in today.

Let us wage a moral and political war against  a dysfunctional health care system and fight for a medicare-for-all-single-payer-system.
Are we saying everyone in america deserves unlimited free health care no matter what the cost?  We have baby boomers in droves going into retirement.  The ratio of non-workers to workers is soaring.  As Bernie also mentions the rich and the poor divide is widening, making the pool of payers narrowing.  In a DEBT based system we cannot do this, it is fiscal insanity.   This may be doable if we move AWAY from a DEBT based system and go to a pure fiat system.  Problem there is the usual outcome is currency implosion, but it doesn't make it impossible, just difficult.   Nice thought Bernie, but so is free cars, houses , food, and energy for every citizen.  This desire is impossible in the current monetary system.  Also, has ANY government sponsored program become the model for fiscal responsibility?

Understand that we stand together....
That happens only at the end of a depression, when the masses are suffering to the point of near revolt.  That is when we will see people unite, and not a moment before.  Only hope I do have is social network evolution, if we start seeing it used for political debate than who will win American Idol, we may have a shot at avoiding that fate.

Money being re-invented

There are various experiments going on right now for new form, or alternate forms of money.
There is BitCoin, also ebay like service for 'credits'.

I am seeing a rise in barter.  Barter is the death knell for fiat currencies and government, as it is the ultimate black market.  Barter makes it near impossible for governments to collect taxation, the lifeblood of operations.

I ran across such an experiment today, called Trade School.

It is very interesting where this all goes.

It is all about Oil

I may blog on a wide variety of financial topics, including gold, currencies, government debt, investing.
But the only one that REALLY matters is Oil.  For without cheap energy, the world financial dance stops.

I believe peak oil is here, and may have already hit the top, we are on the down slope.
One way to realize the reality of this is the current price of gas.  Europe markets are in a full recession collapse, so is Australia, and to some degree, China.   The USA isn't exactly leading economically either.

But here we sit, with gas prices much higher than second half of 2008 prices.  Some of it is explainable by the 3rd world markets growing, their demand is driving prices higher.  But the USA gas consumption is down to 2002 levels....and retreating!   So as the US retreats the rest of the worlds consumption rages on.

Overall this doesn't explain the price of gas today.  It is peak oil, in action.  Peak oil does NOT mean the world runs out of oil.  It basically means all the cheap oil is gone (% to consumption, new cheap well here and there immaterial).  The only oil left is costly and hard to get to, and will continue to get harder and costlier.

Think off-shore oil rigs costing billions to construct.  They are built because there isn't cheaper ways to get oil, we are tapped.

If you want to read a really in depth rant on oil, check out the Burning Platform by clicking here.  While I agree it is a dire situation, that blog does tend to get a little dramatic.   My take is next few years, everyone should spend money to focus on reducing monthly costs.  Buy solar panels, electric car, improve house inefficiencies.  Basically focus on reducing monthly costs to zero.

For once the masses want to do the same, it will cost you...big time.

Are we in a Bull Market...year end rally?

Charts are limiting in effectiveness to help judge future direction.   Past performance has zero for future performance.  However, I do find them interesting to try to give context to where things stand from a historical perspective.

Back on September 11, 11, I posted how the bear market is back.  That judgement was based upon long term indicators that have historically been good indicators of future market performance.  Since the upturn from 2009 however, the indicators have not been as clean as previous downturns.   The indicators have flip-flopped in short timeframes.   The September 11 downturn has already been reversed, around February 2012.   However, I did not change my bear image at the top of my blog.  Why? China turning down, Europe in turmoil, Australia real estate bursting, etc.   Because of all of this I am still nervous that we are going to see a deflationary collapse in the markets at any time.

However, I need to try to remain impartial and not emotionally attached to a future outcome.   Using this long term trading indicator as a guide, the 20 SMA is starting to top out, possibly curve down, indicating bear market once it crosses by a significant amount.  (1-2%)    If in the weeks ahead we can manage to turn 20 sma up, I will change my bear to a bull on the top of my blog, referring to this post.

There is nothing to stop the markets from immediately nose diving after i switch to the bull image.  But given all the facts, the market may buck the bear into elections.

Alternate Power as Investments

European economy is under fire, so is China, and to a lesser extent, the USA.

Yet gas prices are stubbornly high.  Every new well is MORE expensive to drill, as it gets harder to find new resources.  That drives fuel prices up, as well as energy demand from BRICK countries rise.

I still like two stocks for decade+ play, HTM and MGMXF, both in renewable energy.  Both their stocks trade at 40 cents, not something I advise dumping huge amounts into.  But a nibble here for the long haul to me seems like a winner.   As fuel prices go up, renewable energy from thermal simply increases profit margin.  These plants last 50-100 years at constant cost structure.  Check them out.

10 Year US Government bond at new low...ever!

We are close to ringing the bell......the bell that signifies we are hitting the lowest yield EVER to be seen on US treasuries.  The 10 Year US bond yield is at 1.47% on 6-1-12.
Chart below can be found at clicking here:
Also notice that Black Monday in the 1980s was PRECEDED by a rate decline....possibly indicator in near term market fall?

How can this be? Isn't the US government issuing debt at a staggering rate? 1.5 Trillion+ per year, AND the 15  trillion of debt is rotating at some percent per month?    Why yes, it is.

Four years after the 2008 market crash, there is still a high demand for fixed interest, basically avoid risk.   There are many factors, including baby boomer demographics.  In droves baby boomers are moving into less risk as they enter retirement.  Also, there is the US as still the global currency, with countries around the world buying US bonds in an attempt to keep their currencies from rising.  China is the most obvious country who buys US treasuries in droves to peg their currency.  There is also the safe-haven play as Europe destabilizes and China deflates.

All of this results in a trading opportunity.  We are close to, if not already at, a golden opportunity to trade.  To bet AGAINST US Bond rates.  This play has been around for a while, and it has been a huge loser.  Those betting against US Bond rates have lost their shirts.    But here we sit, at 1.47 interest rates.  Will 10 year hit 1 percent? Maybe.  Zero percent, although possible, hardly likely.  At some point, when the rates are this low, you are better off in short term treasuries such as 3 months, or 1 year.  The difference is hardly worth a 10 year commitment.  At 1.47 we are close, if not at a bottom.  At 1 percent, there are plenty of other low risk investments that can compete for a 10 year commitment.

What does this mean for trading?  Well buying US bonds as a commitment right here is risky, if rates do start to rise, then your bond values bought at these levels will fall.  After all, if you have 10 year bond at 1.47 percent, who will buy it if brand, new, fresh from US government pays 1.55 percent?

The play here is to purchase instruments that gain value as interest rates rise.  I wouldn't recommend any large purchasing, just tiny amounts, and build the position as the rates decline, such as TNX (10 year US bond rate).  1.47 may be the 200 year low we will never see again, or maybe, it will hit 1 percent or lower in a panic.  But rest assured, these rates cannot stay here for 100 years, or even 10 years.  There are few bets in the market as lopsided as this.  It is true that we are in unprecedented times, and there is no guarantee that rates will rise in the near term, but time and history is on your side, if you have the patience.