Saturday, January 28, 2012

Facebook IPO

No one can predict the future exactly, but when one gets close, it sure feels good!  Maybe my best call during the last few years was that I thought Facebook would be bought by a bigger firm.  I thought it would be by another tech company, but it was bought.  Here is the post:

Facebook to be Bought by a Tech Giant:

So it was bought, and the day after I wrote the article, but by banks who wanted it for an IPO.  Now that IPO is about to happen.  What does that mean?

Well, it will be large, maybe $100 billion.  There has been rumors that Facebook users will get shares.  I don't know about that.  But there will be a lot of money put into it.

This is also the last move by the chess players at the banks.  This is really all they have left; all other IPOs have gone before Facebook, and so now all that is left is money printing.  This could lead to the last stage of hyperinflation, as money is being created, and made, based on things that do not promote real growth.

Friday, January 27, 2012

Nothing Correlates

I am glad that I am not day trading this market, and that I am long PM and that is it.  Nothing is correlating the way it has previously, or the way one would imagine.  FX is extremely volatile, but volatility by the VIX is low.  Stocks keep ramping higher, and the euro's moves have not exactly matched the news lately.  The dollar ramped with stocks, but now is receding.  Of course, the one simple play, investing in PM, has done fine.

Oil stayed high on a high dollar, which was weird, and as the dollar recedes, it still stays where it was.  Bonds remain high, even while foreign investment flee USTs.  The PWG must have a lot of cash from frontrunning every stock bubble and bust over the last three years to juggle the stock and bond markets.

What this all means of course is that we are at a turning point.  Who knows how the macro news will translate, but we know Europe is in trouble, the Federal Reserve will continue to unleash credit for the Treasurie's debt, and geo-politics remains on pins and needles as the Middle East to Persia to Asia continue to question the motives of the Western Powers.  It is likely that any swan that descends on the lake of the real world will not be black, as we will see it coming from afar, but that does not mean it won't land.

Thursday, January 26, 2012

The Camel

I was not surprised of gold's move after the Fed mandated low rates for eternity, but I wouldn't have been surprised if gold hadn't made such an impressive move either.  The game is getting long, so I expected a big move soon.  Part of my thought that there was a little room for the shorts to hit, but it may be past that now.  It may be time for the great collapse of the Fiat Ponzi.

The amount that the Fed and the ECB need to anti up is trillions more and soon.  February is important to understand where Europe is going, and March is the end date.  And no data has changed concerning housing, employment, and the like.

Yet the closer we get to the end game, the further away it seems.  When I started blogging it felt like the system would collapse soon.  It still feels that way.  Two years ago when I started I said the system had 1-3 years.  Technically I have one year left until I was too soon to predict our fate, but how is the system going to hold up?  Debt/GDP is over 100% now, and once again, no data has improved.  Sure they can continue to print, and gold can go to $7500, but somewhere along the line there will be a straw and the camel will fall. 

Friday, January 20, 2012

Market Moves: A PWG Tale

Today was a huge day for silver.  Long term this is bullish, but due to the way stocks have been ramped coupled with economic weakness, I think it might have been a pump to gain same leverage.  The President's Working Group is the largest hedge fund there is, and they go about their business front running big moves.  I like to think almost every bankruptcy lately has been front run by the PWG.  They have the insider information to know which corporations are weak, and they can make good money front running theses moves.

The same goes for PMs.  They can game these markets, earn a buck, and then use the revenue to go back into the market and lower the price.  This is why silver appreciated to $50 so rapidly.  The PWG lifted their shorts, went long, and then put the shorts back on the top.  There are other market fundamentals that matter, but my point is that this Group does front run big market moves.

Considering there is still a lot of shorts on silver at $25, I would think that there would be one more dip to that number.  Yet the game is getting long in the tooth.  Miners have under performed (due to the same manipulation) and I imagine that on gold's next rise retail investors will finally move in.  I think that the average investor is beginning to think about investing in gold.

Another reason I think that silver may test $25, gold may test $1550, and the Dow may test 11,500, is that the Fed wants another official QE program.  We do have POMO, OT2, and FX swaps, and I consider all of them forms of monetizing debt, but the Fed wants a bigger program.  I don't think it will be next week, I do think it will be the next month or the next.

So we are approaching an inflection point, and silver pointed to that move today, but I don't think it will be for at least a few weeks.

Sunday, January 15, 2012

Friday the 13th

Friday the 13th is an unlucky number because that is the day the Templars were destroyed by the Church.  At least that is how history reads.  We could also sumise that the Templars had become as powerful but wanted to stay on the sideline so they faked there death and went underground.  This is most likely, as the Church and the Templars had always been friendly.

In the last post I said it was too quite.  Well right on cue came the downgrades, and on a date no one can forget.  It is symbolic; much of what the Illuminatti does is symbolic.  This is warning sign, and one to us.  It reads, "The 13th is unlucky, but not for the Illuminatti, not for the Knights."

The downgrade is very serious.  It came late, but it came, and now it sets in motion a collapse of Europe of epic proportions.  I imagine yields will spread wider.  I imagine it will be to the benefit for the US markets (bonds and equity).  Yet it strikes a blow in the Fiat Ponzi, and soon what has happened in Europe will come home to the US, as it is the underlying foundation of the said Ponzi, due to the dollar.

I think that things will start out slow, but by February Europe will be in a death spiral.  Then a few weeks later the US will be affected.  Bernanke will issue more QE, and then Iran will blow up.  This will likely happen before March 21st, or will it?

The alternative is that somehow the Ponzi stays together for another year.  I don't know how it does but it could due to central planning.  I can't put it past the policy makers to have a plan that will do this, but at the same time, I am reminded of a Bob Marley song:

Why boasteth yourself

Oh evil man

Playing smart

And not being clever?

Small Axe- Bob Marley

The reason I think of this lyric is because the policy makers, they have done an immaculate job setting this up (this being creating economic chaos), but there are two things I do not think they have totally planned out?  How are the going to pull the chord and unleash the end game, and when will they do it?

Pulling the chord could happen at any time, but QE would need to be unleashed to give the US a financial cushion from the fallout.  How do they know Iran wouldn't start it right now?  My guess is as good as anyone's, but I do have the pieces to the puzzle here.  I will encourage you to think about how we can put it together, in hope that we can spread the word and maybe mitigate disaster.  After all, that is what our community is about.

Thursday, January 12, 2012

How Long

I keep asking myself this week, "How long can this go on?"  There are so many problems in finance and economics, yet everything is tip top!  This is why I believe we are at another turning point.  How can the numbers look so good when reality is so bad?  The thing is is there needs to be a trigger on this inflection.  What will it be?

The Iran situation is dire.  The millitaries of the world, from the UK to Russia, to the US, to France, from Israel to Venezuela, and all over, have painted themselves into a corner.  The flexing has them so that no one can back down.  Interestingly though Europe did give way a little today.  I don't know why, but it was a weak move.  I don't think the US will like it much. 

The banking system has not improved, in fact, it has gotten much worse.  The Fiat Ponzi is in full monetization mode now.  All are compared to Japan, but please note, Japan had the public buying the debt.  Now, with the Fed and the ECB, the debt is monetized as soon as it is issued.  This is alchemy at its best!

There could be a variety of problems happening.  Who knows what could trigger the next event.  We could be at a point where the Fed decides to issue QE X, but at this time there is little need to publicly announce it.  They have OT2, POMO, and FX Swaps holding the line.  Yet if there is to be an event like Iran then the Fed will want to frontrun it.

My gold call yesterday caught a whiff of what is to come.  I called for $50 today in gold but only got half of it, but now that we see volatility coming into the market from both sides, and this is very bullish.  It is bullish because the downdraft is more a dip to allow big money to come in.  The reason behind this thought is that both Europe and the US are issuing massive dent and monetizing it, and they are doing this on the back of leasing gold, as it is their only performing collateral. 

When gold is loaned, it suppresses demand, but it reduces supply.  The demand makes the first move and equilibrium finds itself with price lower.  But supply is the main driver, and it forces equilibrium higher.  When this is done day after day, it creates volatility.  This is why the swings are getting bigger, and will get bigger.  The price action of the New Year will continue until a huge move to resistance.  That move will happen soon.

Wednesday, January 11, 2012


The market seems to be in the eye of the storm.  Stocks are up, rates are low, and the world turns.  Gold has blasted up above its 200 MDA and this has given the system some leverage.  Still, I am amazed at how the economy appears in the eyes of the many.  It is as if there isn't a pressing issue around.

Europe has a huge debt rollover tomorrow, one that should roil the markets.  I expect gold to climb tomorrow, if not for a few days.  I think a swift move to $1700 is not out of the possibility.

The Iran war scenario is making waves.  There are a bunch of carriers amassed around the State and it appears trouble is brewing.  Iran is having a currencie crisis of epic proportions, which is the worst thing that can happen to a country.  Basically the top of the mountain is about to blow and the ash will spread from Persia around the world, blotting the sun in the sky.

Yet it appears to not trouble anyone.  It is as if everyone is in a daze and a spell has been cast among all.  The trance could last for some time.  Until that time....  

Saturday, January 7, 2012

Tehran's Bank Run

Yesterday there was a piece by Art Cashin that described an ongoing bank run out of Iran.  This is the main reason for the embrago.  If oil was the concern, then the Banking Establishment would have lowered US stock markets and inflated the dollar that way, instead of inflating the dollar by the embargo. 

Iran is in a catch 22.  Higher oil means more revenue, but less sales (especially considering the embargo).  Lower oil prices would have meant less revenue, but the would have had more sales.  The kicker lies that people are pulling their money out of the local currencie, and seeking dollars (and rubles, yuan, etc).  This is how the US wants to make Iran be the aggressor.

The people of Iran will panic, then the government will as well, and then they will retaliate.  Or there will be a false flag.  Either way, Iran is scapegoated and after being bled.

Look for the devaluation of the currencie to continue.  Look for it to have lost 40% of its value by the end of January, at which point Iran will be in a state of turmoil.  February will be a hard month for Iran, and by the Spring equinox they will be about spent. 

The most interesting correlation last weak was the strong dollar correlation across the board.  I was wondering why there was a strong dollar against all currencie, and how the equity market stayed flat.  It was money coming in from the embargo.  It will be interesting if China and Russia go along with it, or fight it.  You would think, because of the SCO, they would go against it, but geo-politics is a tricky thing to guess about.  All I know is the world will be inflames in a couple months, I don't know who will take who's side.

Monday, January 2, 2012

More Predictions

Today I was thinking about just how leveraged the system is.  It is beyond fathomable.  It is exquisitely leveraged.  It is leveraged beyond reason.  Let's compare!

Rome leveraged their system by never telling the commons the real amount of bullion in the Treasurie.  Their system collapsed soon after.  China tried to use paper as monie and their system collapse very quickly.  The US banking system has lasted forty years off of paper, and we should be amazed.  We should.  That is an accomplishment.  But it won't last.  Lies don't.  Not ever.

I spoke with a Russian the other day who lived through that collapse.  He said this system has until 2015/  He couldn't quantify it, but gave comparisons.  The way I look at it, this thing could sink any day, but I have thought that for a little over one year.

The people will go on not knowing, and that gives slack to the Fiat Ponzi.  But when reality has precedent, which it always does, how can we just pretend?  We can't.  The real issue is oil production coupled with debt; debt equals gold reserves as gold is the underlying collateral.  We will either see a huge deflationary collapse or a huge spike in gold.

If we see a huge collapse in gdp (etc) Ron Paul will become President.  I will not pretend to know what the guys in the back room want, because they may want Paul to austerisize America, who knows.  But I doubt that.  What is likely is that Obama and Bernankje will unleash inflation sooner rather than later and 2012 will see gold rise along it's long term projectory. 

Economics would say this is true, as Central Banks everywhere should come clamoring for the shiny stuff.  Silver and platinum should follow, as they are real monie as well.  Oil is needed for any economy, and its demand should stay high enough for it not to be bid to low, but there is that damn PPT and ESF, so who knows what the short term action will be.  Long term, I think we know where the trend lies.

Sunday, January 1, 2012

PM Predictions

After a lot of thought I wasn't sure if I ever wanted to try to guess price action publicly again.  The first reason is it doesn't matter, and the second reason is it is becoming extremely hard for me to do.  But it is in my nature to chart, and watch the fundamentals, so I will put out some predictions, but tentatively.

So my prediction for the end of 2011 was $3300 gold.  My end of year for 2010 was $1900.  So guess what my end of year for 2012 is?  $3300.

My prediction for 2011 silver was $100.  2010 was $50.  So guess what 2012 is?  $100.

As far as platinum goes it will follow its sister metals.

That is a rough picture and it has to do with the price action.  As it all correlates with fiat, and considering that I do not think fiat has any value, I don't really care about price.  I will be buying silver as much as possible below $30, and I would buy gold at this price if I were you, but the best thing to do is dollar cost average into physical metal until the wheels fall off of the Fiat Ponzi.

Those wheels could come off this year.  Debt/credit has been releveraged due to the FX swaps, the Iran war looms, and the world is still in the middle of the Greatest Depression.  That and PM is monie by definition.  So do as Faber says and be your own banker, and hold physical.