Litmus test

This week has proved to be one of the most jaw dropping and thought provoking weeks for myself. Last year I wrote about the direction of the USD on a geopolitical scale, my thoughts on Russia, China, and Iran not what we see or hear on the censored news or some crazy outlandish one sided conspiracy site.  I have tried to be neutral and non-bias (hard to do) my opinions are however backed by real facts and my attitude towards society and government, banks and corporations justified.

            Let me begin by stating the obvious that I am concerned about…Did no one see the Russian Ruble and Chinese Renminbi as a pair in the currency futures trading!  Putin has been on a massive de-dollarization campaign since he left the petro dollar last year.  His meetings with heads of countries like China and Iran along with many others including North Korea sparked my interest as he spend a large percent buying up massive amounts of gold from the Shanghai Bank instead of saving the Ruble as oil fell.

America is being  marginalized.  While the American President has been reforming immigration and healthcare, he has been in complete denial in regards to pissing Putin off and making more enemies than any other president known.  Our allies are disappointed and now China and Russia are teaming up and let us not forget whom we are going up ageist.  I wrote last year the Putin was putting a team together and now we see this all coming together as conflict in Yemen grows Iran and Syria seem to be looking to Putin as not only a new partner but as a major solution. With all the chaos and team antics that Putin is up to between the US president and the real people running things the US bank Cartel they will not let the USD fall this week for fear that it will show weakness. Even though generally we see the correlation between the USD and oil, I don’t feel this time we will, price manipulation trumps all in times like this

Bubblicious

Governments unlike the big banks and the Federal Reserve do not have the luxury of keeping the bank scheme continuing as long as they can anymore, factors that once padded the same pockets is now harder to manipulate to benefits all parties involved. Government has elections to face, the voters with new links to real facts and information and media influence run by government. Many big businesses believe that half of anything is better than nothing at all, even just the idea that you can save or gain can be enough, the illusion that you may still have control over your money can be attractive to anyone. This is just what is happening with the big banks trying to salvage and preserve any of the actual asset debt by deflating the fiat debt, with derivatives and swaps, this ongoing process has create a global bond bubble bigger than we have ever seen. This is the compromise to avert the disaster looming, the paper millionaires will be the fist to feel it after the banks. The loss of their gains that were never real to begin with will be appeased by banks reducing their debts and the feeling of them "gaining" will pacify the real loss of all. The real question is what will cause the collapse in the global economy, inflation or deflation?
The biggest credit bubble is on the verge of bursting and we all know that the results will change the world forever. Governments used to love inflation because they are for the most part the "borrowers" so they can pay back the borrowed money far into the future with inflated money. Banks on the other hand used to hate inflation when they actually had to hold on to the loans they made now they pack and sell off the loans they make with little to no regard for the default rate or logistics of the details. The natural outcome would have been deflation from the banking crisis of 2008 , it would have lead to real business growth for the small majority, yet it would have cost the established powers that be their christmas bonuses or positions. The powers that be (TPTB) cannot have that. The complete asset forfeiture crash in 2008 was avoided by a hand out, half of our world's money given to banks, this has created a negative tenue within government and banks. This cycle we are seeing deflation then inflation only occurs when you are dealing with debt based fiat money. The banks are not any better than the cartel or drug dealers handing the ignorant a bag or a lifestyle (debt) and you are in it, stuck with it for life with no way out.
really it is disinflation, then stagnation, followed by deflation, then you get inflation across the nation, looms a dangerous fixation, with a finale of hyperinflation.
The Federal Reserve (FED) has an agenda and that is devaluing the US dollar. The FED has told us time and time again that inflation is good for the economy. Now the head of the FED Janet Yellen is admitting that deflation will be a positive thing for the economy. However, the Debt deflation is the FEDs worst nightmare,because the truth is that the economy is not what Yellen is concerned with. The real concern is the bonds interest rates, the $191 trillion that Wall St. banks and U.S. have in derivative trades. The obsession the FED has creating inflation allows government spending without going bankrupt and debt deflation would for sure wipe out big banks and the U.S. altogether. The main focus is to keep interest rates to be low as possible because a slight rise even one percent means hundreds of billions more added on to the already massive payments of U.S. debt.
Miss priced assets have lead to multiple markets manipulated by what we think has value. Possession is law and fraud is the status quo now. Banks insured by the FED, with the extensions of the commodities clauses that the Dodd and Frank Act has enabled the banks to gain control profitably. Supply and demand, the general order of human innovation, increasing productivity and the real assets that can be bought and sold and we wont really see deflation even though it is there with the things we need because those things are real, like food and medicine, unlike the swaps and derivative that are truly phony assets. There has never been a solution to scarcity, not monetary, fiscal, economic or political. Currencies can and have died, the scary thing is this time it is on a global scale. Death of our currency is close but it wont just die quickly. It will be a horrific struggle with massive denial and a fight to the death. Most people are earning half of the loans they owe. Loans for houses or cars that are three times what they are worth. People have more money in debt than in savings it is just a matter of time before people see that fiat currency is merely currency, not real value or money. For a while, currency will have increased buying power then people will start to get it and see it is being inflated, then the currency will collapse in buying power, while the buying power of money will be maintained. The only way to get ahead is to ride it out you buy into deflation and ride out the inflation.

Don't Burst my Bubble

“There is no means of avoiding the final collapse of a boom brought about by credit expansion.  The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as the final and total catastrophe of the currency involved.”  ~ Ludwig Von Mises

The United States is now based on debt; this perpetual debt has come from the promotion of wealth and financial security.  Some may say that consumers and borrowers were coaxed into the borrowing to expand growth in our economy by spending.  We saw the outcome of debt and mass loans can do in 2008.  In 1999 through 2005, the housing market was up trending and the federal National Mortgage Association (Fannie Mae) wanted to make buying a home more accessible to everyone.  In 1977, The Community Reinvestment Act gave strong incentives to lenders who would loan money to low-income borrowers expanding the role of bankers to loan sales men.  In 1980, the Monetary Control Act Deregulation made it so lenders could change the interest rate depending on the borrower's credit score, the lower the score the higher the rate, unfortunately a low score is a sign of debt or non-consistent income. In 1982, The Alternative Mortgage Transaction Parity Act gave way to balloon payments making a final payment much higher than original payments and Variable Interest Rates Loans, a loan that fluctuates over time.  Then in 1986, The Tax Reform Act that lowered the top tax rate and raised the bottom, it was the first time in income tax history and gave back substantially if you bought a home.  All of these Acts were to entice home buyers who could not truly afford a home.

 This gave way to a real problem called Sub-prime lending.  In 1999, the sub-prime loan mortgage market exploded and anyone with bad credit, no credit, low income, no income could get a loan.  Sub-prime loans are primarily used to finance mortgages that Prime loan qualifications cannot meet.  This added nine million people to the ranks of home ownership, more than half were minorities.  The people were uneducated about the loans and the consequences that could take place.  The sub-prime loans offered are expensive and have major penalties and higher interest rates that can make the payments overwhelming as the rate increases.  The people knew little about the mechanism of a sub-prime loan, and eagerly singed papers to fulfill their dream of home ownership.  The worst mortgages were offered to the least qualified, Adjustable Rate Mortgages (ARMs) like interest only or payment option ARMs would reset after one to two years, then change weekly or monthly. As the increase in borrowers flooded the market, the home equity was rising and the borrower would sell or refinance before the rates would adjust, at least that is what the banks would convince you of while you were signing. They knew what they were doing.

The Federal Reserve lowered the Federal funds rate 11 times, from 6.5% in May 2000 to 1.75% in December 2001. This created a flood of liquidity and growth in the economy and other lending markets. The Securities Exchange Commission (SEC) relaxed the net capital that freed them to leverage up to 30, even 40 times their initial investment in 2004.  Goldman Sachs (GS) The Lehman Brothers, Bear Stearns, Merrill Lynch (MER), and Morgan Stanley (MS) all acquired new lenders; including Sub-prime, lenders securing trillions of dollars in mortgage backed securities and saw bigger profits than expected for years.  In return the stocks kept rising.  The FED began raising its rates up to 5.25 percent.

As people became aware of the downfalls the loans held, the horror stories were airing on every headline creating panic and people stopped buying and started defaulting on their loans.  The lenders of the sub-prime loans were filing for bankruptcy weekly, in February of 2007 over twenty-five companies filed for bankruptcy.  The news spread like a wildfire.  The degree of leverage by the large companies could no longer be supported and they “broke the buck” by creating capital risk with leverage.  Many investment firms were unable to cover the credit derivative contracts.  They halted the sales of short sells trying to stabilize the market, but it was too late.  The panic and uncertainty spread in to the interbank market and they needed to prevent it from becoming a global catastrophe.  The government then had to issue bailout programs with help from the European Union and Japan and other central banks came together using conventional and unconventional methods to provide liquidity support to the institutions.  The Fed cut rates along with the CB, Sweden, China, Canada, Switzerland, and The European Central Bank.  It was not enough.  Each with their own versions of bailout packages, outright nationalization government guarantees, and finally The U.S. came out with The National Economic Stabilization Act buying up billions of distressed assets.

We still have seen the effects of the bubble that burst in the mortgage market; the market has not fully recovered and may never.  Economic cycles that are manipulated though the monetary expansion, this debt can create a large bubble, much larger than the natural cycle would hold.  With that, larger bubble will come much larger consequences; right now, the magnitude of this bubble we are facing in 2015 is bigger than it’s ever been in history.  Since 2008, the Central banks (CB) and Federal Reserve (FED) removed collateral from the markets that were high quality.  The American people and government are even more leveraged out against even smaller quality assets paying a much higher price than they ever were in 2007. The Wall Street Journal came out with an estimate that states “a third of traders have never or will witness a rate hike” this era has driving a rise in leverage.  Chain reaction leading to the collapse has been set in motion for some time now.

The U.S. Treasuries has a rate of return that is considered “risk free” rate of return that is the assets that all assets are priced based on riskiness.  The rate has been falling for over twenty-five years.  These falling rates then spread to other rates of return making investors barrow or turn to leverage to gain a higher return.  While the past thirty years, we have seen investing risk getting cheaper because the bull market those bonds have been in.  This time it will be much different the crash will be all assets worldwide and it will happen simultaneously to devastate huge segments of the global population.  The Fed can keep printing money until they own all the publicly traded companies and we all end up working for the FED or government.  The powers that be like the major investment institutes, CB the FED whose actions have perpetuated and continue to exacerbate the bubble, know just what the outcome of their actions and decisions will be.  The European Central Bank, The World bank along with The International Monetary Fund (IMF) all understand and have understood just what this next massive credit bubble and most large corporations wont be hurt by the outcome.  They know they have laid the groundwork for it and in some way, they will profit from it in the end.  The bubble will only hurt the public and again their personal savings accounts will be drained in the bailout funded by hard working middle class, until they have, nothing left to contribute it will be for the good of the nation, of course.

American Psycho, coming to a government near you!

 

     The last man standing could be the new theme for our global leaders as we witness our alias and enemies destroy each other.  Most men would take a beating once or twice verses being a slave for life.  Most of the governments globally are slaves, slaves to the banker cartel looking for anyway out from the grips they hold on each country’s destiny.  Now we are slaves to technology, and media as a whole by the large corporations, banks intelligence agencies, and such.  We would love the idea that our people and economy will be saved, saved by our next leader or government.  This is also the premise of fairy tales and they too do not exist.  Our world is motivated by money and power, bailouts, loans, all free money they don’t care about the restructure of economy or government.  We are brainwashed and persuaded to believe that our vote and what happens in our world still counts when it does not even matter at all.  The economic model of our world is broken; our economic and political systems are not working.  In the US, our financial system is leveraged out much than in 2008. Yet our “leader” is still convincing us that we are doing better than ever.  Our true reality is that most of our world leaders we know and see are just the pawns and do not have any control over the “masters” playing the game.  Hope is a strange thing and really that is all you have… nothing else is on the table for us.  Our world is being run by an anonymous dictatorship, with obvious dictatorial traits.  The people our leaders represent have little or nothing at all; in common, they are not even the one percent.  Do you really think that they are fighting for the masses? The UN, NATO, IMF, FED, or the World Bank are fighting for themselves and power, not us and the economy.  They are fighting for supreme power, draining every source and growing more powerful.

            Power is a complicated thing. In Physics power is defined as the rate of doing work equivalent to the amount of energy consumed per unit of time.  Power itself is defined as the ability to act on, with the capability of doing or accomplishing something. The fact is, Power is so attractive that many people can and will be completely influenced by the attractiveness of it.  The ability to do, control, command, and sustain it, are all aspects of power.  Women are proven much more attracted to powerful men and are generally unaware of the power enticement correlation.  Beyond the power attraction lays a deeper oddity. What other kind of people power attracts.  In the business world, we have found most powerful jobs will attract a specific kind of individual, they are called psychopaths and sociopaths.  Many studies have proven this over and over again. It is scary to think that one out of every two hundred humans is a psychopath. Most psychopaths have no idea they have anything wrong with them at all and will never seek help. Forbes did an article once on the top ten jobs that attract psychopaths, very disturbing but it makes sense.  Most were all power positions with out need for empathy. This does not mean that one of every two hundred people will go on a killing spree or have disturbing remains in their freezer.  It just means that they lack empathy or emotions with a antisocial behavior, but all have complete disregard for anyone else but themselves.  It is a personality disorder that makes it so scary not just a lack of empathy, they tend to have a superficial charm with egocentric behavior, they are highly persuasive and just love and feed off power. Perhaps those jobs can even create psychopaths. The question is how many are in power of us on a global scale? All of them.

Count Drag-hiu-la "He wants to suck your bond"

The Central Banks evaluating, planning and the decision making process has not been working so far, they have lost sight of the peoples need and expectations. The new normal is Central Banks exporting deflation to on another by printing money, to buy financial assets including sovereign bonds. While the amount of eligible collateral is becoming scarce. Where are the days of practical supply and demand? In the early 2000's Japan was the first to do this, at the height of crisis and it was too late, we are seeing the deflation outcome of mass bond buying in Japan. The main effect is on the currency it ruins and the exchange rate. Just like Japan the ECB may have been too late.
As the European Central Bank (ECB) announced that 1 trillion in Quantitative Easing (QE) will be the only answer to the lagging economy and Euro crisis within the Euro zone. Fundamentally if an economy has the potential for recovery, they leave the interest rates alone. The economy has been unable to reach sustainable growth, they are dependent on exports, so they also have to make sure the Euro does not gain excess strength adding risk to the export market. The QE starts march 1st, with the rate the Euro is dropping it wont be soon enough. The Euro debt is too large to just sit on, unexpected events or risk looming, so much can take place until QE starts.
Mario Draghi who has been the President of the ECB since 2011 when he replaced Jean-Claude Trichet, has been vigorous in convincing the ECB members that QE is the only answer. Draghi who was named by Forbes as the eighth most powerful person in the world, has a resume of a conspiracy writers dream. He is a member of the Group of Thirty (G30) consisting of privet, Central and major bank heads and even some former Central Bank heads from Brazil, Japan, Italy, Argentina, India, Israel, Italy, Mexico, Poland, Singapore, Spain, Canada, Britain, France and Switzerland. Stuart P.M. Mackintosh, Jacob Frenkel, and Paul Volcker along with two Chairmen from the ECB and two chairmen from the New York Federal Reserve, members from international and academia institutions, even a chief economist of the World Bank. It continuous with a chairmen of the Bank for International Settlements, two chief economists from the International Monetary Fund and a chairman of the Basel Committee on Banking supervision. The G30,s chairmen is Draghi predecessor Jean-Claude Trichet. The group started as the Bellagio Group in 1963 by a Austrian economist Fritz Machlup who wanted to investigate the balance of payments crisis and currency problems in the 1960,s. In 1978 Geoffrey Bell started the G30 after a invitation from the Rockefeller Foundation who gave the initial funding to start the G30. If the connections to Rockefeller was not enough Draghi was also the managing director and chairman of Goldman Sachs. One may think this to be a major conflict of interest since he is also the president of the ECB, and perhaps could have a outside agenda. Draghi was also the Italian Executive Director at the world bank, later director of the Italian Treasury, then governor of the Bank of Italy where a loan secured with bonds of two billion Euros to the Monte dei Paschi di Siena (MPS) bank. The Italian Central Bank (Draghi) was making decisions that the Parliament and the public were unaware of and the end result was tax payers repaying the debts with interest and the MPS got government bonds and the ICB ended up with junk bonds. Draghi used this as a foundation for a system that protects privet banks and their owners from nationalisation and economic collapse.
Draghi had been pushing for QE from the start, Greece possibly exiting the Euro, and uncertainty in Ukraine, the "low-flation" in the Euro zone economy Draghi knew he would succeed with QE. This was to be expected by the market and you see it in the sovereign-bond market as the yields fall. Historically the ECB has given ample notice in regards to their decisions, when they had their meeting earlier this month it was a 9-0 vote for QE, only one man Mr. Weale stated that a hike was needed and they pushed back the meeting. The risk of QE is high and banks take on a 80% of the risk in sovereign bond buying, some banks have buffers others do not. Other bail out counties will be massively impacted unable to purchase until it redeems debt and given a limit on holdings for the sovereign issuer.
Negative Rates encourage physical cash, metals and real assets like real estate. This all would equal the opposite of the end game. The Government drives prices up and the people who save lose, and the wants of Government drive the innovation instead of how it should be where Government technology drives price down and consumers drive the innovation. As it stands we pay them to give us our own money.
The total Forex reserve is an estimated 12 trillion, half the government will invest, about a quarter in held in Euros and anything sold by a CB most likely will end up in the privet financial sector, so who knows how much will end up injected into the manipulation of the market. Why do we have to pay for the risks they took ? Well knowing, if there is risk, there will be loss. Don't forget, this will only work the way "they" intend it to.

Gang Related

For years now, the United States was eager to follow in the footsteps of Japan.  In the new-found sector Japan has come into, regarding inflation sheds light on the FEDs reality that Quantitative Easing (QE) may be here to stay.  The US is about to see inflation like never before.  News has come out stating that the raise in interest rates discussed by the FED is looking close to impossible to achieve.  Central banks create foreign capital that floods the US and pushes rates down.  The statements that have come out state that the FED has no idea how they will make it work without QE.  The focus and comments that Yellen has discussed about diversity within the FED would seem that she is more interested in women becoming executives than in finding a solution.  People may believe that the FED is controlled by Congress; truth is everyone is controlled by the FED, with an exception of banks holding mass amounts of precious metals they have more control than we could ever imagine. 

What will the solution be?  Can there even be one?  We are so in debt and printing money seems to be the only way the US will stay a global power.  Around the world, leaders are becoming more and more disappointed in the actions, as well as the lack of action, taken by the US.  This leads to uncertainty with the USD and has other world leaders looking at ways to prevent America and keep it from overpowering the decision making process for other countries that gain headway economically.

When you look closely at America, you can find some major flaws.  Yes, it is a land of freedom, and believe me when I say I am blessed to be in this country and to be a proud American.  The problem is Americans are such individualists.  The fact is we strive for individuality with ourselves, our families, especially when it comes to our money.  We are the prime example of low- and high-class categories.  When it comes to communities in the US, you see a strong bond in lower income communities, where reliance, family, and even gang affiliation...  If we look at this from a global military perspective, you see America as higher class, with other counties looking like those community driven neighborhoods.  So why wouldn’t they just team up with one another to create their own “gang?”  While Obama is looking at pipelines and immigration, he seems nearsighted to the fact that other countries are teaming up while America is warming the bench, unable to play at all.

America has not needed (so far) to team up or rely on anyone or anything but oil, keeping it in USD and keeping USD in global reserve currency.  Other countries are sick of us dominating the game.  America has the force and power to take over anything anywhere at anytime.  Just to put this in perspective, no mater how many weapons a country has, America reigns supreme.  Warfare is fought by the powers of finance more than weapons.  And we love to spend our QE on our military.

            Yet we see Putin making nineteen presidential trips this year alone, meeting up with many world leaders, most recently with Kim Jong-un.  That must have interested Hassan Rouhani, the leader of Iran, who has eagerly been waiting approval for “nuclear energy.”  The decision is supposed to happen Monday.  Is it so odd that we do not see this information on most news networks in the US?  This writer does not see approval going forward.  I doubt Rouhani will be surprised at the denial and why wouldn’t he just make Russia and North Korea his allies due to the fact they have the nuclear power Iran is in need of. 

Right now, other countries are feeling the wrath of treachery, power, and hypocrisy the US is ruled by.  No one seems to be feeling it more than Russia.  Globally we cannot survive without the oil from Russia, yet we keep pushing oil prices down, expecting them to fall.  We seem to forget that Russia has been living comfortably in a black market with hyperinflation since the 1990’s.  Us trying to destabilize them is close to impossible.  They are true survivalists and have the resources and global firepower to keep up with and surpass our already bankrupt US shale companies.  Putin knows Russia will be just fine when, in a few years, oil will be right back up and the US will be in yet more debt.  America is the most powerful when it comes to many things, the people are not survivalists by a long shot.  We are sheltered and blinded by media and comfort, but we mere sheep, with a government that is controlled by bankers not the democracy that so many would love to believe exists.

Putin is set on shifting the anti-corruption plan many countries set in place globally.  He has been preaching about the corruption of foreign leaders and it could be much closer to his home than we understand as regards the Ukrainian conflict.  The whole mess with Ukraine seems to be a conspiracy lover’s dream come true.  All we know is that the plane went down.  We have only a third party video and no black box to be found. Nor is there any solid information that Russia was the one to bring it down.  What is odd is that the Dutch have agreed to keep any information about MH17 a secret…and somehow they got 122 tonns of gold back from the NY FED.  We are trying to destroy the ruble by driving down oil prices, while in all reality it costs Russia only about $35 a barrel, unlike the US and its strict guidelines for oil manufacturing.  After the $35, the rest is all profit for the Russians.  Even with oil prices dropping gold keeps rising it seems to be all these newly formed teams are becoming more and more interested in.

Green-spun out

“Gold and economic freedom are inseparable”-Alan Greenspan

             Let us just say that economic growth falters or asset prices start to fall, then what?  What will happen to the market?  Would the FED just start printing away?  The end of QE and the bond purchasing program not only drops the bond markets and overvalued stocks, it makes silver and gold look extremely bearish. Many factors could be playing into this with the Swiss Gold Initiative, Ebola, fear and other geopolitical concerns. All of these affect the market in an odd way since we see a huge demand for gold, yet the price is falling with demand growing, it hardly seems right. The analysts will do the blame game, and try to make sense out of it, who better to blame but the FED. Especially convenient when past members of the FED are blaming the system that they created or put in place.

  Greenspan stated that the FED’s balance sheet “is just a pile of tinder” and gold is a good place to invest, because he feels it will rise “measurably” in the next five years.  After 19 years at the FED, seems odd that he would slander the way they have been handling things, even with his successor Bernanke still in power, yet he said the FED “fell short of its goals” when it came to economic growth and unemployment.

 Alan had been on or near wall street since the 40s and knows his way around money and economics. During his time with the FED he used standard Taylor rule of economics, that every percent that inflation rises, the central bank should raise interest. This was not the view or beliefs Alan had from the 1960s. Greenspan seemed to have been a huge advocate for gold, in fact he published an article on Gold and Economic Freedom in 1966. Some of his statements in it are jaw dropping knowing now what he has done while in the FED, saying gold was a great way to save your money and was pumping up the gold standard. Just like what he is stating now, yet in 1966 gold was $35 an once.

 This was of course before he was a member of the FED or a consultant for President Ford, Bush and Regan. At this time his job and focus was being an economic consultant for his own company, backed by beliefs non-existent of his time in the FED.  From 1987 to 2005 Alan did not partake in any broadcast interviews unlike Bernanke his successor who makes regular public statements trying to gain assurance of the media and people, trying to gain transparency instead of the secretive past of the FED.  Greenspan before and while serving in the FED was also Director of Foreign Relations and served as director of huge corporations like JP Morgan, Mobil General Foods and many more. He even assisted Nixon as coordinator on domestic policy. Alan was regarded like a rock star to politicians and the financial world, until some bad calls were made, then the subprime mortgage crises that tarnished his reputation.

What is Alan really saying that you have less than five years before the market collapses, so you are welcome for the QE handout, now move over to gold?  Greenspan may be feeling guilty for the years he helped drain the money supply; he now is on a buy gold campaign when he is clearly a monetarist.  He is a major manipulator and is a key player in where we are today and 4 trillion dollars in debt.  Now he goes back after all we have suffered though, as if we do not know that PMs are a way to insure our money.  Is he just talking to the elite, because he knew the way to grow the economy in 1966 and did a 180 turn.  What is really happening here is major market manipulations; they sell paper gold from $1300 down to $1200. Manipulators are then guaranteed volume to be able to buy at traders stops.  Then they buy back positions at $1200 (if they can see the order books) then make money again when it rebounds, voila.

Next show on the Silver Screen

Is m2 the ultimate denomination of wealth?

A decade ago in 2004 silver was only $6 an ounce then in 2008 $9 now in 2014 you are looking at almost double what it was six years ago.  Even the epic loss in 2011 did not seem to tarnish SLV as an investment.  I would look at these numbers and agree that investing in silver is a sure bet.  Floating rate notes (FRNs) cannot compare to silver trading, when buying silver it’s more of a stack and hold type of investment.  The metals market cannot keep up the lows we see, the production in mining is well above the low numbers that we are trading at currently.  Are industrial buyers just locking in a supply?  We are seeing mass rollover of long contracts, unusual for industrial buyer’s positions.  These seem to be a “deeper pocket” strategy, possibly metal manipulation.  Silver is oversold when looking at a technical picture, last year looking at the RSI you see silver bottoming with lows right before it hit the lows June of last year.  Has the spike in SLV just begun?  We saw record sales last month, with the most volume ever seen in SLV COMEX futures, even shortages in the physical metal.

Could silver go lower?  Some traders predict $15 others see the lows just a way for the SGE to buy discounted metals and horde them until they can control the new fix price.  Who can really predict the drop or rise with all the global entities corrupting the market.  We never thought we would see interest rates at zero, how do we know what is to come?  Well look at history, look at human and market predictability, in no way will they just let metals go lower than we see now.  This is why trading metals is really the way to go; yes holding the physical PMs is a great insurance for your own personal assets.  Trading metal options is a true and complete strategy.  While the cost of silver is so low I personally would stack and hold, however as it gets higher lets say over $49 I would switch to lead.

GDP weather you believe it or not

Can we really blame the gross domestic product reports on the weather?

The U.S. did just that when it blamed the 100 billion lost on snow early this year. China is now following suit of the bazaar claim that cool weather is the reason for the outcome and higher levels of activity growth in the recent outcome of the GDP data. Seems odd to me considering that the pollution in China is so intense you cannot even see the sun at times.  Since when does economic data rely on weather? To better understand this let us look at how we see and get the GDP overall. We have to understand the factors of the data research.

The System of National Accounting (SNA) and the Material Product System (MPA) that was used in the early soviet union, still used by some countries as an alternative to the United Nations System of National Accounts (UNSNA) or (SNA) that focuses on "free market" prices. This is supposed to provide data of economic activity on an international level. Countries cannot provide the same data, it is impossible, the country that invests billions into research, is not going to be the same as a country that cannot be assessed because of geographical factors, or socio-political instability. Some governments will not allow surveys of all kinds to take place. Many factors prevent the “same” data from being entered. The input-output levels can be highly manipulated due to the standard. The UN cannot enforce the same standard. Since it differs from country to country so there are often discrepancies, quarterly and yearly revisions, but as long as they provide sufficient data on national accounts the UN will fit it into its standard, all the other accounts can be reworked up to UN standard. If you look UN Yearbook, under detailed tables the data over decades instead of yearly you will see a trend change significantly. Studies in economics have shown that even the “free market prices” are truly regulated and administered prices in Western countries.

Many people do not even know that the MPA exists. The MPA that uses administered prices, measures the output of “material goods” tangible products, in comparison to “services”, usually in national accounts, the data collected is only to measure the “value” of outputs produced. Comparing the MPS and SNA is how China determines the GDP.

Keeping up with the Keynesians

Positions:Long GLD June 19th, 2015 114.00 calls. Paid $6.80, currently $7.20, with a gain of +5.9%
Buy Gold $1191.50, Currently at $1207.60 for a gain of 1.3%

October is said to be the most frightening of all months, not just for costumes and Halloween, fear fest, etc. October is frightening most of all for traders, this is the month when the market has crashed in the past, including in 1927, 1987 and 2008. It’s no secret that this time of year is a tricky one (no pun intended), many past reports show even with the decline of S&P and large-cap index companies, it also shows October to be one of the best performing with returns at 10.9%. Personally, I don’t see the month having as much to do with the fear in the market as what is taking place in the geopolitical and global economic realm.

            I feel redundant saying it again, but now that the economic data is out, I can finally stop preaching about how the dollar is weak. The previous reports were wrong, the USD along with our economy is on the brink of collapse. Many people have lost so much faith and respect in the USD, that eventually they will turn to a greater currency. Could Harry Dent be accurate when he invested in Australia the way he has, will that be the better economy to live and invest in? Keynesian economics is dead and gone, now if they could print out deeds, we would at least have some collateral instead of just a mountain of debt. Even then, we would be entrapped in mortgages. There really is no room for growth at this point, we as a nation are tapped out due to the depletion of cheap energy, and an array of greedy puppet masters fueling the people and the market with blatant lies.

QE isn’t going to end just yet, not with the negative interest rates in the Euro and its uncertainty with investors, not to mention the bail-outs. The USD is only the lesser in all the evils, not truly a safe haven for foreign investors, it is just has the illusion it is. The capital we had from the colonial era is gone and we have piggybacked on societies’ that had our “new” technologies and ideas. With the huge entitlement outlays to fund, the U.S. will have to keep borrowing and printing, creating more and more debt.

Maybe I could have been spot on with my prediction that the manipulated rise of the dollar was to bring down the price in gold. It would be interesting to see how much bullion JP Morgan is hoarding along with the other owners of the economy. With the “revised” corrected data out on the housing and economics of the U.S, I am shocked to see just a small change in PM’s I would have thought that gold would be skyrocketing with the information released. 

Did I mention the COMEX manipulation? Let’s touch a little on that, traders are to believe that technical analysis and PMs is totally out. It’s not, just learn from the manipulators, they know what traders will do. It’s like getting into the mind of the puppet masters, Central Banks, the FED, etc. Volatility in the market is high in October with record fluctuations happening even higher. Singapore’s holiday and the Chinese market being closed for a week have affected the slow rise in PMs, however when it opens Wednesday and the new SGE reports come in, my prediction in gold skyrocketing has just begun.  

"All the perplexities, confusion and distresses in America arise not from defects in the constitution…, as much from downright ignorance of the nature of coin, credit, and circulation" — John Adams, August 25, 1787.