Today's commentary entitled "Hitmen Contracts To Bust COMEX," by Jim Willie says to "give credit to the USGovt statrats in their busy laboratories. They decided to ramp up the Q2 Gross Domestic Product by including all USGovt rescue funds for the big banks, including the diverse funds from the many liquidity facilities. All those funds will go directly into the GDP for Q2 as a special line item. Expect a miraculous economic recovery in the second quarter, based in vapor. The stock rally since March was based in accounting fraud. These are true American innovations, but too bad they are not exportable! They are not, since they have no value."
Translated, what he is saying is that the government bailout money given to the banks was included in Gross Domestic Product statistics making it seem as though the economy is more robust than it actually is.
This is the equivalent of me taking out a loan of $50,000 from a bank and then including that $50,000 as income on my loan application. Sure makes me look a heck of a lot better than I really am!
And it is based on this type of accounting that investors are jumping back into the stock market thinking the worst is over. As soon as this myth is exposed, look for the next down leg of the market to be a real doozie.
Got gold?
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Close Call For US Banks
Mutual Fund Manager Performance
Making money in a bull market is easy. Not so in a bear market.
Take a look at the performance of the leading fund managers since the market peak in 2007.
And the worst is still yet to come.
This is just one more reason why gold belongs in every investor's portfolio at present, as there is no one between you and your investment to mess it up.
Take a look at the performance of the leading fund managers since the market peak in 2007.
And the worst is still yet to come.
This is just one more reason why gold belongs in every investor's portfolio at present, as there is no one between you and your investment to mess it up.
The Hidden Tax
Bloomberg recently commented that the total estimated bailout spending at this point is $12.8 trillion. That is $36,5000 for every man, woman and child in the US.
This is the hidden tax that the politicians don't tell you about. They don't have to raise taxes to spend money, no, they just print more out of thin air. They then funnel that money back to their home districts, make the voters happy, and get reelected for another term. Sweet deal, huh?
Income taxes are NOTHING compared to the hidden tax of deficit spending. We need to remember that this debt is owed to the rest of the world by each of us, NOT our government. They are borrowing money and signing our names on the loan agreement.
The "loan contract" that the rest of the world holds is our dollars, and they all know that at some point we will default on our loan, at which point the dollar/loan contract becomes worthless.
Then, every person or institution in the US that has stored their wealth in cash, banks, insurance companies, mutual funds, pensions, 401(k)s, IRAs and/or government bonds will lose that wealth.
Foreign governments know this as well, and are already secretly unloading dollars for gold in preparation for that day of reckoning. This day may still be a few years in the coming, or it may be tomorrow, but it WILL come. It is inevitable.
This is why our government continues to tell our citizens that "all is well," because if the sheeple ever find out the truth, the dollar is doomed. People will rush to gold, the govenment's funny money game will be over, and the politicians will have to go find real jobs. That is assuming they aren't lynched first.
So, don't forget the Golden Rule ..... He who has the "gold" makes the "rules."
Got gold?
This is the hidden tax that the politicians don't tell you about. They don't have to raise taxes to spend money, no, they just print more out of thin air. They then funnel that money back to their home districts, make the voters happy, and get reelected for another term. Sweet deal, huh?
Income taxes are NOTHING compared to the hidden tax of deficit spending. We need to remember that this debt is owed to the rest of the world by each of us, NOT our government. They are borrowing money and signing our names on the loan agreement.
The "loan contract" that the rest of the world holds is our dollars, and they all know that at some point we will default on our loan, at which point the dollar/loan contract becomes worthless.
Then, every person or institution in the US that has stored their wealth in cash, banks, insurance companies, mutual funds, pensions, 401(k)s, IRAs and/or government bonds will lose that wealth.
Foreign governments know this as well, and are already secretly unloading dollars for gold in preparation for that day of reckoning. This day may still be a few years in the coming, or it may be tomorrow, but it WILL come. It is inevitable.
This is why our government continues to tell our citizens that "all is well," because if the sheeple ever find out the truth, the dollar is doomed. People will rush to gold, the govenment's funny money game will be over, and the politicians will have to go find real jobs. That is assuming they aren't lynched first.
So, don't forget the Golden Rule ..... He who has the "gold" makes the "rules."
Got gold?
Gold: Best Days Still Ahead
Often, when I suggest adding gold to a client's portfolio, they will complain that the price is "too high" and that they should have bought it back when it was "low."
I try to explain to them that there is a difference between "low" and "lower."
Ten years ago, when gold was at $350 an ounce, it was certainly "lower" than it is today. But does that imply that prices today are "high," or simply "higher?"
I submit that prices are not "high," only "higher." Said another way, in the grand scheme of things, prices are still "low." Here's why.
The following is an article from Rick Ackerman regarding the lack of frenzy surrounding gold right now. When the public discovers gold and it is the talk of cocktail parties, and the price goes through the roof, THEN it will be "high." Read the article and I will continue afterwards.
NYC Gold Expo Blissfully Subdued
by Rick Ackerman on May 13, 2009 12:01 am
The scene at the Hard Assets Investment Conference in New York City looks pretty subdued this year — an encouraging sign, since it will be time to exit precious metals when this annual event reaches the frothy stage. For now, though, frothy it is not. I’m told that there are only half as many exhibitors this year as last, continuing a pattern of decline that began a couple of years ago (when, need I remind you, gold quotes were nearly 40 percent lower). Mining and energy companies with booths at the show were oh-so-eager to chat up anyone who walked by, and at times there were more company reps in the aisles than there were visitors. I don’t mean to suggest that this event was a dud – only that it reflects the bland consensus on bullion that obtains outside of hard-money circles.
Let me repeat myself: This is quite bullish, to the extent that multitudes of investors yet to be persuaded and who stayed away in droves represent potential demand for nuggets yet to be mined and ingots to be fabricated. I should also say that the conference itself, at the Marriott Marquis, was first-rate in all of its details. The line-up of speakers represents a who’s who of the precious metals world, as well as newsmakers from other walks of life. Harry Markopolos, the guy who tried so hard to rat out Bernie Madoff to the SEC, gave the “Insider’s Story.” Jay Taylor, the expert’s expert on mining shares, shared his considerable expertise. And Bob Prechter delivered Monday’s keynote: “Using the Wave Principle to Forecast Gold and Silver Prices”. Peter Schiff spoke on the collapse of the U.S. bubble economy and what it means for investors, and Amity Shlaes, author of a superb new book about the Great Depression, shed light on the government’s efforts to repair the financial crisis.
HUI Near a Breakout
There were also presentations by companies both big and small from the world of mining, energy and natural resources, including some favorites of ours such as Pelangio Exploration and Esperanza. Ironically, while speakers from these companies were working hard to convince the audience that now is the time for hard-asset investors to go all-in, the Gold Bugs Index (HUI) was stealing up on a technical threshold that some chartists might view as breakout territory. Mining-share aficionados should be smacking their lips over the fact that this could happen so quietly. We can’t say exactly when the mining sector is going to blast off for outer space, but there is no mistaking the evidence that they are fixing to do so. Let’s hope that when it finally happens, few take notice.
Investors are very familiar with the Bell Curve. It represents the rise and fall of trends, cycles and/or investments. Everything in life goes through cycles, and investments are no different.
Here is a Bell Curve for a hot technology fund back in the late 90's when everyone was invested in internet and technology stocks and mutual funds.
The share price of the fund in the late 80s was about $4. By the mid 90s it had tripled to $12.
"Too high to get in now, you would have said."
Wrong. Look what you would have missed. Another tripling of your money!
Notice how it gradually went up and then when everyone got on the bandwagon in 1998 and 1999, it went ballistic. All you heard on TV, cocktail parties and family reunions was how much money everyone was making in tech stocks.
THAT'S the time to get out.....when it looks like the sky is the limit.
Sure enough, as the tech boom illustrated, prices dropped off the cliff shortly thereafter.
Well, here we are with gold prices up three-fold in the last 10 years, AND NOBODY IS NOTICING! Which is good for us buyers, because the longer the buying pressure is suppressed, once it is let go, gold will go ballistic.
I recently heard a statistic that said if gold were backing our money as it was in the 20's, based on the amount of paper money out there, gold would be at $25,000 per ounce right now.
That day is coming. It is inevitable as the Asians and Arabs have already started dumping dollars for gold. When this cat gets out of the bag, and the public finally understands what is going on, I don't think $25,000 is out of the realm of possibility.
So. You tell me. Is gold high?
I try to explain to them that there is a difference between "low" and "lower."
Ten years ago, when gold was at $350 an ounce, it was certainly "lower" than it is today. But does that imply that prices today are "high," or simply "higher?"
I submit that prices are not "high," only "higher." Said another way, in the grand scheme of things, prices are still "low." Here's why.
The following is an article from Rick Ackerman regarding the lack of frenzy surrounding gold right now. When the public discovers gold and it is the talk of cocktail parties, and the price goes through the roof, THEN it will be "high." Read the article and I will continue afterwards.
NYC Gold Expo Blissfully Subdued
by Rick Ackerman on May 13, 2009 12:01 am
The scene at the Hard Assets Investment Conference in New York City looks pretty subdued this year — an encouraging sign, since it will be time to exit precious metals when this annual event reaches the frothy stage. For now, though, frothy it is not. I’m told that there are only half as many exhibitors this year as last, continuing a pattern of decline that began a couple of years ago (when, need I remind you, gold quotes were nearly 40 percent lower). Mining and energy companies with booths at the show were oh-so-eager to chat up anyone who walked by, and at times there were more company reps in the aisles than there were visitors. I don’t mean to suggest that this event was a dud – only that it reflects the bland consensus on bullion that obtains outside of hard-money circles.
Let me repeat myself: This is quite bullish, to the extent that multitudes of investors yet to be persuaded and who stayed away in droves represent potential demand for nuggets yet to be mined and ingots to be fabricated. I should also say that the conference itself, at the Marriott Marquis, was first-rate in all of its details. The line-up of speakers represents a who’s who of the precious metals world, as well as newsmakers from other walks of life. Harry Markopolos, the guy who tried so hard to rat out Bernie Madoff to the SEC, gave the “Insider’s Story.” Jay Taylor, the expert’s expert on mining shares, shared his considerable expertise. And Bob Prechter delivered Monday’s keynote: “Using the Wave Principle to Forecast Gold and Silver Prices”. Peter Schiff spoke on the collapse of the U.S. bubble economy and what it means for investors, and Amity Shlaes, author of a superb new book about the Great Depression, shed light on the government’s efforts to repair the financial crisis.
HUI Near a Breakout
There were also presentations by companies both big and small from the world of mining, energy and natural resources, including some favorites of ours such as Pelangio Exploration and Esperanza. Ironically, while speakers from these companies were working hard to convince the audience that now is the time for hard-asset investors to go all-in, the Gold Bugs Index (HUI) was stealing up on a technical threshold that some chartists might view as breakout territory. Mining-share aficionados should be smacking their lips over the fact that this could happen so quietly. We can’t say exactly when the mining sector is going to blast off for outer space, but there is no mistaking the evidence that they are fixing to do so. Let’s hope that when it finally happens, few take notice.
Investors are very familiar with the Bell Curve. It represents the rise and fall of trends, cycles and/or investments. Everything in life goes through cycles, and investments are no different.
Here is a Bell Curve for a hot technology fund back in the late 90's when everyone was invested in internet and technology stocks and mutual funds.
The share price of the fund in the late 80s was about $4. By the mid 90s it had tripled to $12.
"Too high to get in now, you would have said."
Wrong. Look what you would have missed. Another tripling of your money!
Notice how it gradually went up and then when everyone got on the bandwagon in 1998 and 1999, it went ballistic. All you heard on TV, cocktail parties and family reunions was how much money everyone was making in tech stocks.
THAT'S the time to get out.....when it looks like the sky is the limit.
Sure enough, as the tech boom illustrated, prices dropped off the cliff shortly thereafter.
Well, here we are with gold prices up three-fold in the last 10 years, AND NOBODY IS NOTICING! Which is good for us buyers, because the longer the buying pressure is suppressed, once it is let go, gold will go ballistic.
I recently heard a statistic that said if gold were backing our money as it was in the 20's, based on the amount of paper money out there, gold would be at $25,000 per ounce right now.
That day is coming. It is inevitable as the Asians and Arabs have already started dumping dollars for gold. When this cat gets out of the bag, and the public finally understands what is going on, I don't think $25,000 is out of the realm of possibility.
So. You tell me. Is gold high?
Unrest, Unemployment and the Unraveling of the Dollar
an excerpt from
Sea Change In Bond Prices Gold Positive
By Roger Wiegand
May 8, 2009
http://www.webeatthestreet.com/
"Taking your own advice to get away from a potential combat zone would be a prudent action. One cannot rely on the local police to keep everyone safe once they get into an overload mode. Conventional protections will likely become overwhelmed in a worse case scenario.”
“When time is available, I surf dozens of blog web sites, and these aren't the radical, wacko sites, either. There is a troubling tone in the blog comments that has surfaced in the last few months. It goes beyond the usual (complaints) about the economy, politics, and overall bad mood. There is a sense of apprehension and even fear of the unstable third world direction for the USSA…”
“Worry about increasing crime and hints of outright insurrection top the list. The talk of revolution is scary, because there is no way to know exactly the real motivation and agenda of these bloggers. The armed Bubbas and the rest of the radicals may be gaining support in their effort to simply resist change in any manner they can. (The President) and the rest of the 'inside the beltway' political powers don't have their finger on this pulse...they are clueless.” –(This from an impeccable source who’s job it was to watch this kind of stuff and shall remain unidentified).
Our markets’ forecasts remains the same: We see continuing deflationary signals for the overall big picture. Our forecast is for national unemployment to peak at 33% in three years with some worse cases like Michigan at 40%. The news reports will exaggerate on the far low side to prevent scaring the Sheeple. Normally, you will see published numbers one-half of actual reality.
Some time down the road in this cycle, we think perhaps this fall, inflation and potential hyper-inflation pop-up and create more mayhem. This portion of the longer view could last 6-18 months and more probably shorter in term rather than longer term. After this unexpected cycle episode, we return to deflation, continuing for years, similar to Japan’s experience since 1989. We are then stuck in the mud with no growth and little, or no economic advancement. Ultimately, this mess leads to world war as it always has in history.
Traders and investors world-wide can read the hand writing on the wall. The US and other central banks of the world are in a race to see who can debase their respective currencies the quickest.
Due to the overbearing size of US bonds and US cash, and also being the world’s reserve currency, the American Impact will be the stronger and felt in a negative rippling wave against all others.
Everywhere we look foreign governments are stopping gold sales and quietly seeking to buy more. China appears to be a buyer of bullion and foreign gold mines. Moreover, they are mining within their nation and not reporting the success but rather holding the spoils in storage for safe keeping. China is reportedly now number two in global gold production.
A recent Financial Times story reported the central banks of Europe over the past few years stupidly sold-off gold incurring losses of $40 Billion of gold bullion at ridiculously low prices. Mr. Gordon Brown, Prime Minister of the U.K., was personally responsible for $5 Billion of the total. This kind of activity has come to screeching halt. Now these central bankers and others are hard core gold buyers. However, most would prefer not to admit it as this is a counter-move to their fiat currency printing. Rather, they buy gold and deny gold as a good trade or investment. How cute.
The bond price event being such a powerful influence is going to scare the paper peddlers and potential buyers of their suspect stuff. The bigger picture will be to drive investment and trading out of all specious bond categories and currencies into gold and silver.
Do not get tangled up in daily noise. Keep studying the larger view and buy precious metals after each profit-taking correction.
Personally, I can see unbelievable opportunities to trade that we would never see again for many years. Turn these problems into opportunities. Those on the right side of the trade might get rich. Those on the other side are just victims. Stay Alert
Sea Change In Bond Prices Gold Positive
By Roger Wiegand
May 8, 2009
http://www.webeatthestreet.com/
"Taking your own advice to get away from a potential combat zone would be a prudent action. One cannot rely on the local police to keep everyone safe once they get into an overload mode. Conventional protections will likely become overwhelmed in a worse case scenario.”
“When time is available, I surf dozens of blog web sites, and these aren't the radical, wacko sites, either. There is a troubling tone in the blog comments that has surfaced in the last few months. It goes beyond the usual (complaints) about the economy, politics, and overall bad mood. There is a sense of apprehension and even fear of the unstable third world direction for the USSA…”
“Worry about increasing crime and hints of outright insurrection top the list. The talk of revolution is scary, because there is no way to know exactly the real motivation and agenda of these bloggers. The armed Bubbas and the rest of the radicals may be gaining support in their effort to simply resist change in any manner they can. (The President) and the rest of the 'inside the beltway' political powers don't have their finger on this pulse...they are clueless.” –(This from an impeccable source who’s job it was to watch this kind of stuff and shall remain unidentified).
Our markets’ forecasts remains the same: We see continuing deflationary signals for the overall big picture. Our forecast is for national unemployment to peak at 33% in three years with some worse cases like Michigan at 40%. The news reports will exaggerate on the far low side to prevent scaring the Sheeple. Normally, you will see published numbers one-half of actual reality.
Some time down the road in this cycle, we think perhaps this fall, inflation and potential hyper-inflation pop-up and create more mayhem. This portion of the longer view could last 6-18 months and more probably shorter in term rather than longer term. After this unexpected cycle episode, we return to deflation, continuing for years, similar to Japan’s experience since 1989. We are then stuck in the mud with no growth and little, or no economic advancement. Ultimately, this mess leads to world war as it always has in history.
Traders and investors world-wide can read the hand writing on the wall. The US and other central banks of the world are in a race to see who can debase their respective currencies the quickest.
Due to the overbearing size of US bonds and US cash, and also being the world’s reserve currency, the American Impact will be the stronger and felt in a negative rippling wave against all others.
Everywhere we look foreign governments are stopping gold sales and quietly seeking to buy more. China appears to be a buyer of bullion and foreign gold mines. Moreover, they are mining within their nation and not reporting the success but rather holding the spoils in storage for safe keeping. China is reportedly now number two in global gold production.
A recent Financial Times story reported the central banks of Europe over the past few years stupidly sold-off gold incurring losses of $40 Billion of gold bullion at ridiculously low prices. Mr. Gordon Brown, Prime Minister of the U.K., was personally responsible for $5 Billion of the total. This kind of activity has come to screeching halt. Now these central bankers and others are hard core gold buyers. However, most would prefer not to admit it as this is a counter-move to their fiat currency printing. Rather, they buy gold and deny gold as a good trade or investment. How cute.
The bond price event being such a powerful influence is going to scare the paper peddlers and potential buyers of their suspect stuff. The bigger picture will be to drive investment and trading out of all specious bond categories and currencies into gold and silver.
Do not get tangled up in daily noise. Keep studying the larger view and buy precious metals after each profit-taking correction.
Personally, I can see unbelievable opportunities to trade that we would never see again for many years. Turn these problems into opportunities. Those on the right side of the trade might get rich. Those on the other side are just victims. Stay Alert
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