Thursday, August 25, 2011

The Only Bubble Left

The only bubble left to have, besides what will be a precious metals bubble occurring in about ten years, is the fiat bubble.  The Tech bubble was popped as fast as it ballooned, the easy liquidity bubble followed, and now all that is left is fiat currencie.  Once the fiat currencie bubble pops, and only then, will there be a gold bubble.

The fiat bubble may have a year or two left, depending on how fast people wake to it.  If people do not understand it, it could last several more years.  Every country, and every establishment is fine boiling the frog slow.  It means that more control can be leveraged out of the police state, and taking away freedom from the common person is the main goal.

The financiers and oilgarchs are taking their time pushing on the string, allowing both sides of the system to stay in flux.  The economists want easy liquidity, while the other side ask for austerity.  Both sides mean to slowly defile the system that has been set in place.

Tomorrow Bernanke will play his role, if that is by announcing anything or not.  He is already providing liquidity to Europe, and this has dire consequences for fiat currencie.  He will continue to inflate the fiat bubble, until there is only the gold bubble left to inflate.

Wednesday, August 24, 2011

America's Last Day

The markets:  who really cares, right?  Gold and silver have storable value, and everything else is worth the paper it is printed on.  That being said, there will be fire works, if not a fire storm, starting Friday.  Bernanke has his back up against a wall and the walls are closing in.  Bernanke's policy is boxed in, but he thinks he is Houdini.

How will he have ZIRP for the next few years without a stimulus/easing program?  Is China going to stay in the market, along with all the other indirect bidders?  Are the Private Dealers going to be able to afford the debt, without the Fed flipping the bonds for them?  I do not think this will happen, I do not think it is possible.

And Bernanke can not achieve the impossible.  He is not a magician, despite his wishes.  His other alternative is to let rates rise, and then all social programs will get cut due to the interest on the debt outweighing inflows.  If that happens then America is debt in the water, and it will be forced to default, and not for political reasons.  A default in that scenario will prove Keynesian policy and monetary policy does not work.

Gold sold off like I thought it would, albeit at a higher price than I thought.  Gold's bull run moved higher than my target price of $1850, one that I had for 9 months.  Once it got going, it was obvious the reason:  Bernanke needed its price to appreciate so that he could get the highest return possible when he loans it out.  Now he can afford QE 3, because he has his cash from his gold loans.

This is why Bernanke is such a donkey.  He acts like he does not know what gold is used for by the Fed, when gold is loaned out to other Central Banks as a performing loan.  It is, in fact, the only performing loan on his books.  Everytime he has a comment concerning tradition, he lies.

Saturday, August 20, 2011

Panic on the Exchange

There are many factors for the selloff:  prices were overvalued, there was easy money pumped into finance via Central Banks, but the main one was that Major Banking Houses needed liquidity.  Major Banks are insolvent due to toxic collateral from fraudulent loans.  These banks needed needed cash, and fast.

The prop desks of the Major banks, from Europe to America, had to sell stakes in equities among other things to have enough assets to balance their balance sheets.  This was the major cause of the correction.  Some banks, like Bank of America, were forced to liquidate their portfolios.  Some, like JP Morgan, were shorting the market knowing that this move was going to happen.  So while Bank of America sold their equity positions in Exxon and Hess, JP Morgan was selling calls and using the Special Petroleum Release to locate their shorts.

This caused a huge downward move, and since JPM was going to benefit, the President's Working Group did not step in.  I am sure JPM floated some Fed funds loans to Bank of America in exchange for the market making, too.

So now that the cascade has happened, the questions are, where do we go from here?  Does the Federal Reserve step in and monetize the debt, so that Primary Dealers can flip their bonds and use the cash to get back into the corporate market place?  Does the President's Working Group prop up the trades while the scheme begins anew?  Will the Federal Reserves first move be to loan gold out, giving them cash to marginalize assets 100:1 by using fractional reserve lending?

All I know is that a big week lies in store for the markets.

Friday, August 19, 2011

So It Begins

It begins:  the final move into whatever way the financial world crumbles has started.  It could mean hyperinflation of the currencie, it could mean using a gold standard to back currencie, it could mean the Dow falls to Zero, it could mean anything, and it has begun.

I have watched in amazement as the world has revalued gold up and up higher this summer, and until now, I felt like I was dreaming, but waking up and seeing that my all important number of $1850 was broken last night, I realize that this is not a standard move- this is the move that reintroduces the world to gold being monie.

I have written about $1850 so much that I think I was actually numb from  it.  I had $1850 as my target price for last winter's solstice starting the spring before.  When I did not get close I went to the drawing board and became more conservative.  Then I watched gold breakout this summer, something that is very unusual, but still I thought this move would happen in Fall.

So now here we are, the end of summer, and gold is heading home full steam.  This is why JPM called gold to be at $2500 by the end of the year, because gold has nothing stopping it.  There are a few reasons for this.  Central Banks need their gold worth something so to leverage their bad loans, as both sides of the balance sheet need to be balanced (Assets=Liabilities), and also investors will try to catch the wind by throwing their dollars at the metal.

Most investors will buy Barclay's ishares and eventually they will come up empty handed.  Only the five largest shareholders will get payment in physical; everyone else will get paid in cash.  Cash that is likely to be worthless.

So here goes nothing:  Gold to the moon!

Thursday, August 18, 2011

My Dream Last Night

I won't be making this a dream journal, don't worry, but I want to brief one of mine from last night.  I had a momentary dream that the markets were down 1k today.  I also want to add I NEVER dream about finance.  I only dream about my little bubble of a world- my freinds of old.  So imagine my surprise when I awoke this morn, later than usually, to find everything scrapping the bottom of the barrel once again.

The Fed's board said they did not want to be involved in markets yesterday, which is surprising considering that is all they have done for decades now.  Is there a trick going on?  And who benefits?  It will be odd if gold is on par the Dow at $5k, but not out of the ordinary.  I only say odd because that was not the plan of the Working Group on Financial Markets for the last, again, several decades.

If this happens everyone part of the establishment will resign, and pensions will turn negative.  The only saving grace will be oil's price, which will remain cheap after it hit its production peak.  This is not ironic, it was done on purpose by the oilgarchs.  I suppose they figure they would rather not return as many dollars as they would like if that means they can keep the dollar ponzi going that much longer.

Wednesday, August 17, 2011

Unicorns and Moonbeams

The world somehow is still playing imaginary; the dollar and all fiat assets have levitated for the last week.  Real monie- precious metal, has inched up, but there has been no major move since gold topped at $1820.  What is the next move, and what is the world waiting for?

Apparently, people have not figured it out yet.  People are only jealous that gold is appreciating in value, and above all other "assets", whether they are or aren't such.  Oil has come up a little, but has only pared losses.  Fiat is still playing its game of pretend.

People will rather live in fairyland than face reality.  This is the truth.  Of course, reality always makes itself known, and it needs no precedent, but the slightest thing can bring it to the fore.  A flap of a butterflies wings, if you will.

It could be Bernanke at Jackson Hole announcing, or not, QE 3.  It could be Hugo Chavez demanding gold and it being delivered in the form of a cash check.  At this point, anything could set the world of reality in motion, but the funny part, people will go to the ends of the earth to maintain the status quo.

So, we keep pretending.  We pretend until the wheels fall off.  This will be disastrous, like a night blacked out drunk awoken in an unknown place naked.  This is what will happen, it looks like, as the world appears more belligerent than ever.

Sunday, August 14, 2011

The Looming Support

This week's test of support is far and away the most important support test ever seen on US equities.  If Dow 11k fails to hold, the event could trigger a watershed of selling.  It would mean the President's Working Group has a new plan in mind other than holding up the markets.  It would mean the Greatest Depression would be secure in name.

If equities hold on Monday, it would mean support has tested and held three times, which is the number I look for when analyzing support levels.  It will take Tuesday to know, since markets have such a global market and either Asia or Europe could sell it off.  So if equities hold through Tuesday trading, look for consolidation in the 11k range.

This would be perfect for QE 3, for II do not think that QE 3 can be announced as a solution to falling (or rather failing) markets.  If markets continue to slide, then it shows stimuluses and quantitative easings have not worked.  Yet if it holds, then it will be "needed" so as "to keep the recovery on track".

Gold sold off like I thought it would, even though it went way higher than II thought.  Silver has been at the least a safe haven amidst the turmoil.  Oil has traded with equities.

One reason I think prices of these goods will continue to rise is that they, oil and gold, have peaked production.  I think the market follows these goods, and this while fiat fails as a store of wealth.  That is why in the end I think that the rise of precious metals and oil is in the bag, while fiat fails.  And while fiat fails equities become more expensive.  Could the Dow trade even with gold?  Yes, and it will.  But at what price.  Does it matter?  Dow 11k, gold $11k, once again, does it matter?

And this will likely be the end result.  Gold will equal the Dow again like it had until the early '80s.  Oil will rise, but higher gold prices could stem the gains.  Yet silver trades 1:1 with oil, and if gold goes higher so will silver, because both define money.  This is why I see not only higher gold, and silver, but also oil, for the trend together.  Oh, and never forget platinum.  She is there with them, too.

Friday, August 12, 2011

All Tied Up

The markets have been tied together since the Fall of '08, and maybe even just before then.  If gold goes up, equities go up.  When oil goes down, equities go down.  The dollar is at an inverse relationship to equities and oil, and sometimes the dollar- gold leads the strongest of the fiat currencie, whichever that may be at any one time.  Silver trades with this relationship too.  All of the markets are tied together, and they will fall and rise the same.

If there is going to be an announced depression then oil and equities could drop.  It would take a change in monetary policy though, because otherwise the dollar is set to fail.  Gold will win no matter the case, as was seen last week:  even when equities are weak, gold will rise.

The dollar has not followed gold lately though, even with all the market turmoil.  The market has not ran to the dollar as a safe haven, and has now shunned Treasuries.  Hyperinflation of the dollar is looking more and more likely by the day, and with it, all real assets.

Stage Three of the Steady Inflation scenario is only waiting on one more stimulus, or quantitative easing, whichever it may be.  Once the system is juiced again, there really is nothing stopping the wheels from falling off.  Confidence is low so people know the game is over.  The money knows gold for what it is- a store of wealth.  The dominoes have been falling for a long time, and the script is nearly at its climax.

Throw in peak resources and the timeline is becoming.  Oil, gold, and platinum have peaked production.  Once silver does, it is lights out on the fiat ponzi.  That could be a few years out, but the trading channels remain the same.  Resources up in price, fiat currencie down.

Wednesday, August 10, 2011

Monetizing the Debt

Who knew that monetizing the debt was so important to the system?  It was important to the Private Dealers because they needed the cash that they received when the bond's were flipped to the Fed.  It was important to the Fed because it kept their income stream alive.  It was the only thing propping the system, so why have they not continued it?

I think that, more than anything, it was a psychological experiment.  I think they want to make people emotionally attached and thus "dependent" on their investments.  It has made people crazy, from Israel, to London, to America, and people are going insane.  Of course, there is no real action to the people's motive; they steal useless items and get in fights, instead of marching against the system.  This is what the oilgarchs and financiers wanted when they dropped the bottom out of the markets.

Need I say anything about gold?  The sky is the limit, but if QE 3 is trotted out, the first move will be to drop the price of gold.  It will be done two ways:  First the Fed will loan gold out, this will happen during Asian trading.  Then after QE 3 is announced, the President's Working Group on Financial Markets will short gold, and maybe even buy puts.  Yes, they have a margin account.  Anything you can do they can do, and with unlimited liquidity.

This is the reason I think it is a psychological experiment:  the PPT aka Plunge Protection Team (President's Working Group) is mandated to stop these type of routes, yet they are no where to be found.  The G-7 is also staying out, after they said they were coming in, same with Europe and same with China and Russia.  Either they all lied together, or they will conduct policy coordinatedly, but only after the world burns.

This is the most facsist thing I have ever witnissed; and while it happens CEOs like Jaime Dimon smile.  There is a plan, no matter what it is, and it matters naught if we know it, for we know the one thing that matters:  precious metal is a store of wealth, and thus, monie.

Monday, August 8, 2011

The Greatest War

We are in the midst of a great war, one that may end up rivalling alll the other great wars.  So far, this one has been fought economically.As of now, the US oilgarchs think it is in their best intrest to sacrifice their banking housees to lower the price of oil.  They are doing so to have oil cheap while they plan an actual war, because once the real war starts, oil will be extremely expensive. 

This is also China calling the US' bluff.  They love deflation.  Inflation is running rampant in certain sectors of their economy and it does not bode well with them.. They would much rather have inflation, because they can feed their hungry populace easier, and continue to use dollars and euros to buy gold and stuff.

This bodes worst for liberals, for they look insane saying we need more stimulus.  I think this fits in with republicans who are running for office, even though they won't be able to solve these problems, lest the name Paul, and really, even Paul is up a creek without a paddle.  I hope everyone learns to swim.

QE 3 is Certain

I looked at some charts and I figured looking back I nailed the Dow pullback to 11,800.  The next thousand blindsided me.  Luckily I have no stake what so ever in the markets right now.  I might get into Sprott Trust positions if I did not like the metal in my hands so much.  But I think at this point that would be the only stock I could recommend.

Buying right now is like catching falling daggers.  It is either bravely done, or plain stupid.  Soon Bernanke will step in and issue his mandate:  a continuation to "keep the recovery on track".  I am surprised he did not just let it roll, and have a few blow hards mad at him.  Now people should know it does not work.

But rather it appears that Americans will cry for more QE like a baby for a binky.  They know not why they want it, but they think they need it.  Little do they know it is what will keep them naive.  They should grow up, and throw their passafire down the toilet.

Yet people only learn from their mistakes in this day and age, if even then.  The financial system will need to end for anyone to realize they are living a pipe dream.  That day is fast approaching, but Chair Bernanke will keep the show going with one more round.  Three is the Majik number, after all.

Sunday, August 7, 2011

The Two Scenarios

One scenario is absolute deflation where the Dow goes to 2k and meets gold there.  I do not mention that scenario too often because it is unlikely due to Keynsian economic policy.  More than likely, the Central Bankers of the world will issue hundreds of trillions of dollars to keep the ponzi going.  That is why the likely end game is hyperinflation of the currencie.

Word is out that the G-7 will step in where Bernanke left off.  Does this mean Bernanke will not need to mention QE 3?  Can he back door the program through the global banking cartel?  He may still do it, as placating the masses that his plan will work may be in their best interest short term.  The wool is still over the eyes of many, especially the Greatest Generation and Boomers.  These two generations are like dogs on a track; they think they are dependant on a system in which they think they have been part of building.  When one not only thinks one has something at stake, but that one's ego is on the line, one will do almost anything to maintain the status quo.  This is why society is spinning its wheels.

This is why the looming disaster is more than a financial one; the world has its ego at stake.  Yet the ego only resides outside of self:  it is a creation of whits.  Most important to the scenario is that the ego is let go, for it will hold society back from a nirvana that has been at hand since the beginning.

Because the G-7 is stepping in, they will try to spur growth by loaning gold out.  It is the only system of leverage they have, as printing fiat is only like throwing paper in a fire to put the flames out.  This will add supply (albeit it in paper), and quell demand (if only for a minute).  I think gold will pull back similar to how silver did last spring and how oil did recently.

After gold pulls back, there will be no turning back.  The gig will be up as the globe prints to infinity.  Once the Central Bankers make their move, the third and final stage of hyperinflation will set in soon after.  I think it will be apparent by the next winter solstice that something is askew.

Friday, August 5, 2011

The Greatest Depression

The Greatest Depression is now staring the world in the face.  Gone are monetary policy, fiscal policy, and all other quick fixes.  It has been proven that they do not work, and here lays the waste of the economy.

The world's power hungry politicians will continue their maniacal ways, but only to have the system collapse on top of them.  The Central Banks will continue to run monetary policy into the ground, and governments will do the same fiscally.  Yet the world watches passively.  The discourse has ended.

The capitulation of the system has wrecked havoc on growth and wealth.  People are mired in a calamity of finance.  The finance was based on the lies of economics.  Now everything is in ruins.

The collapse has occurred in slow motion over the course of the last few decades.  It has reached an apex.  The world has changed, and the people will change with it.

Wednesday, August 3, 2011

Jobs Program

It could be as early as this week, but before Bernanke utters the words 'continued easing', there will be a proposal put forth by President Obama to have a quote, 'Jobs Program'.  It will outline how we are going to build roads one last time before oil peaks, how we will make plantations of solar energy, and other somewhat dubious industrial feats.  The reason that I say dubious is not because some bridges are in disrepair, or that our State will need to ween itself from oil (how I am not sure), but because it will once again be a corporate bailout, by the government.  It will once again be a fascist decree.

I have been proposing that Obama would do a hands on 'Jobs Program' since the Spring of '10, but to my dismay, America has accepted crumbs and asked for nothing.  Yet now Americans are truly in need of funds, and unless Bernanke really does drop cash from helicopters, then this will be how dollars are put into the mouths of the babes.  I imagine it will be very inustrialish, probably creating jobs that will build things.  They will be contracts to corporations, and the corporations will hire.  New power plants, prisons, bridges, etc.  I do not know how it will go, but it will.

The front will be for jobs, but it will be so that banks can make new performing loans.  The crux of the problem is the banks, and the fascist system wants to fix that.  This will be what will 'save the system', or so they say.  More than likely, this will be how America ends its status as global empire; spending its way into oblivion.

Monday, August 1, 2011

Walled Street Vs. the World

First, the Dow hit 12k on the head.  Now we will see it consolidate for the next few days, before moving back to the top of its range.  Gold looks bullish, silver bounced off of support, and platinum is catching up to her sisters two.  The dollar had a dead "dollar" bounce today, if it fails to rally from here, which I expect it too.  I gave it the benefit of the doubt a few weeks ago, for one last rally, and it failed to move.  The dollar is going lower from here on out.

Everything is in line for QE 3, especially with all of the horrid economic news coming out.  Oh, and it looks like the Muni bond massacre has begun, with a Rhode Island town declaring bankruptcy.

You would think Congress would have listened to America when the people voiced their opposition to the bailouts of '08, but you would have thought that the people would have stayed strong and marched on DC as well.  Walled Street does have the world by the ears, but they have empty threats.  Congress thinks it is at the whim of the oilgarchs, but it is the people of the world that have the strength.  If the people ever turn on the system, it will end quick.

The people, unfortunately, are complacent, and pretend not to know what is happening to finance, although in the back of their minds they know all to well.  Soon the world of finance will spin so that the lower and middle classes become one, and they will be left with little to no power considering what they once had.  It will be a sad day, but one in which people will wake up.  At that point it will take a concerted effort to change things.  The fate of humanity is in its own hands.