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Avery Goodman

 
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  • The Greek De Facto Default [View article]
    Here are some of the larger Greek shipping companies: Danaos Corporation; Euroseas Ltd.; Tsakos Energy Navigation; Overseas Shipholding Group- Stelmar Ltd. All Greek owned.

    Most Greek shipping companies are family businesses and they are spread all over Greece. Big names in Greek maritime industry are the Lemos of Oinousses, Pateras of Oinousses, Onassis of Smyrna, Mavroleon, Livanos of Chios, Carras of Chios
    Kulukundis Latsis of Peloponnese, Negroponte of Syros, Chandris of Chios, Niarchos of Piraeus, Economou of Galaxidi, Economou Los of Chios, Eugenidis Soutos of Samos

    A very large number of Greeks find employment in the maritime industry, both on the ships and in back offices. The shipping industry is the single largest contributor to the Greek economy. While it is true that some costs are denominated in dollars, most particularly, fuel, that is also true of the Icelandic fishing fleet.
    Feb 14 08:33 AM | 4 Likes Like |Link to Comment
  • What Lies Ahead For Stocks, Gold, Silver And Platinum After The Greek Default? [View article]
    Well, perhaps, it is best to qualify the remark in my article. I believe that some people, who have a good feel for the market, can develop a good record of being correct, but that record will inevitably cause them to lose humility and become cocky. If they are writing a newsletter, the people who follow them often end up being drones, and blindly doing whatever the newsletter writer says.

    This is true whether they think they are using Elliot waves or another system. In my opinion, it is not the Elliot wave, or the fibronacci that causes them to be correct. It is their interpretation of market movement, which, though they do not know it, arises not out of these technical analysis systems, but out of their subconscious application of logic, reason and common sense.

    The danger is that, from what I have seen, a number of correct calls almost always leads to greed. And, greed leads to attempts to make more and more money through leveraging. Or, it may lead to the sale of core portfolio gold, which is the only insurance they have against financial repression, immediately before the price takes off.

    In the end, the short term trader will suffer serious financial injury, when, after a number of good calls, the next call is heavily wrong which it inevitably always is, eventually. So, in my opinion, it is better to avoid short term trading, other than in the same spirit as you would be in during a fun time in Las Vegas.
    Feb 14 08:12 AM | Likes Like |Link to Comment
  • What Lies Ahead For Stocks, Gold, Silver And Platinum After The Greek Default? [View article]
    Avi,

    I can counter by asking you why I have also been correct so often, in predicting short term market movements? I have done it without the help of Elliot waves.

    Of course, I am not correct all the time, and that is the problem. But, I seem have a relatively good feel for the market. That "feel" includes the mindset of those who seek to manipulate public perceptions through liquidity and the process of market catalysis.

    In spite of being frequently correct, I do not believe short term trading is a strategy that will result in long term profits, because, sooner or later, all of us are going to be terribly wrong about the short term. In contrast, the long term involves factors that cannot be changed, such as the basic insolvency and desperate need for inflation that drives the policy decisions of all western governments now.

    Unless you have deep connections to the central banks, you will not be able to predict when and where the flow of liquidity will go. This will be true no matter the system. Short term market movements are best used to establish long term positions at favorable prices.

    That said, I wish you the best of luck, and sincerely hope that you are an exception to the general rule.
    Feb 14 06:36 AM | 1 Like Like |Link to Comment
  • What Lies Ahead For Stocks, Gold, Silver And Platinum After The Greek Default? [View article]
    I do NOT believe that news creates market movements. It is merely one aspect of a much larger picture. Certainly, social mood is the major force governing human affairs over the long run, and the financial markets are no exception but to think that this can be quantized from day to day is, in my view, a grave error. In an age when electronic money can be created with the push of a button, in the absence of a very large macro event, liquidity now governs short term market action, not sentiment. An example was yesterday, when sentiment, as measured by the put/call spread was extremely negative, but the market went up regardless.
    Feb 14 04:58 AM | 1 Like Like |Link to Comment
  • What Lies Ahead For Stocks, Gold, Silver And Platinum After The Greek Default? [View article]
    One more thing...I agree that there will be a massive reversal at some point. But, money printing will kick that down the road for a very long time. The central bankers are attempting to orchestrate a permanent and massive inflation so that insolvent nations like the USA and other leading western nations can balance their books. When this period is over, the "reversal" will happen, similar to what occurred after the Great Inflation of the 1970s but on a much larger scale. But, remember, gold started the 1970s at $35 per ounce, and, after the "reversal" was selling for over 10 times that price.
    Feb 14 03:00 AM | 1 Like Like |Link to Comment
  • What Lies Ahead For Stocks, Gold, Silver And Platinum After The Greek Default? [View article]
    Avi,

    Under the pure gold specie standard, wave theory, whether it be Elliot waves, or the others, would have more validity. As it is, unfortunately, the nominal values of virtually all easily tradeable assets, including stocks, bonds, gold, silver, et. al., are governed by liquidity flowing from the printing presses of central bankers, not Elliot waves.

    Do you seriously believe that the tripling of the US monetary base, and similar activities in Europe, which just happened to begin in mid-March 2009, had nothing to do with the synthetic "bull" market that just happened to begin in mid-March 2009? Electronic money printing created the current rising market, and sustains it. That is what manipulation is all about.

    Elliot waves do seem to have some validity when applied to the very long term analysis. If it were possible to divine short term movements accurately, a good Elliot wave trader could take $1,000 and end up with $2 billion after a one or two year period of trading. I see no evidence, whatsoever, that this has ever happened. Most Ellliot wave devotees are still busy selling subscriptions to their advisory services.

    There is no evidence, as far as I can see, that short term traders, who use Elliot wave theory, are any more successful. It is the skill of the trader, and his ability to "sense" momentum, that determines whether he will make money by trading. The best short term traders end up sequentially correct, if they have a good feel of the market. They make money, until they are too confident and begin to dabble in leverage. Then, some time later, their stop-loss orders are eventually not triggered fast enough. They end up wiped out.

    That said, an occasional short term speculation can be fun, and often profitable, just like a trip to Las Vegas, and, so long as you are prepared to lose the money, its fine.
    Feb 14 02:28 AM | 1 Like Like |Link to Comment
  • What Lies Ahead For Stocks, Gold, Silver And Platinum After The Greek Default? [View article]
    Futures price do have a very strong influence on spot prices, because of arbitrage. And, yes, the man who will always bring ruin to those who trust him is the one who knows what is right and chooses to do what is wrong. Greenspan was and is a believer in the gold standard, yet he took charge of the Federal Reserve, which caused the demise of the gold standard in 1933, due to its inability to redeem its excretions of paper dollars in gold coin, as required by then-existing laws. Greenspan, though a believer in the discipline of gold, printed more irredeemable paper dollars than any other Fed Chairman in history, with the exception of Ben Bernanke. Both men will go down in history as utter failures.
    Feb 6 04:32 PM | 2 Likes Like |Link to Comment
  • What Lies Ahead For Stocks, Gold, Silver And Platinum After The Greek Default? [View article]
    Yes. Whereas the most conservative investors, prior to 1933, bought gold, over the last few decades most will not even touch gold with a ten foot pole. Gold is owned by a very tiny part of the investor population. The most conservative investors buy muni-bonds, treasury bonds, etc. Only a tiny part of the dissatisfied European bond buyers turn to gold. The vast majority, nowadays, just switch to US government bonds, thinking in some measure of blinder-based logic that debt issued by the bankrupt USA is "safer", in some mysterious way, than debt issued by insolvent European nations. But, in any event, most will buy ONLY bonds of one kind or another. Gold is considered much "too volatile".

    Greenspan and Bernanke are some of the biggest printers of paper money. But, Bernanke admitted to Congressman Ron Paul that he "watches the price of gold". Believe it or not, Alan Greenspan was (and still is) a self-proclaimed "gold bug" who, in 1968, explained in an academic paper, how bad irredeemable paper money is, how it should never be allowed, and how only gold preserves the rights of citizens! Google it!

    Many people can be "bought", unfortunately, in exchange for position and power.
    Feb 6 02:15 PM | 3 Likes Like |Link to Comment
  • What Lies Ahead For Stocks, Gold, Silver And Platinum After The Greek Default? [View article]
    It has not inhibited them because, in spite of the price increase, and the seemingly unending explosion of fiat paper, they have managed to induce extreme levels of volatility in what was for thousands of years the most stable of all commodities. That chased away conservative investors, and kept a vast majority in bonds, and it still does. Given the vast increase in world population, along with the inflation, gold would be selling far higher if the extreme volatility did not scare conservative investors into stocks and bonds. While it is true that the public doesn't care about gold, the people who move commodity prices, which are the banks and speculators, care a lot about the price of gold, and do watch. Even Ben Bernanke admitted to Congress that he watches the price of gold as an indicator of market perceptions, and his predecessor, Alan Greenspan, watched it even more carefully. The price suppression racket, to the extent of scaring away conservative investors, has been quite effective, and had a long term effect on the price.
    Feb 6 01:39 PM | 2 Likes Like |Link to Comment
  • What Lies Ahead For Stocks, Gold, Silver And Platinum After The Greek Default? [View article]
    Central bankers "care" about gold prices because fast-rising prices send the message that policy-makers are incompetent, and raises inflationary expectations. Higher inflationary expectations, in turn, causes the rise of other commodity prices, which then squeeze corporate profits throughout the economy, and inhibits central bank leeway to print money to help commercial bank constituents.
    Feb 6 09:50 AM | 3 Likes Like |Link to Comment
  • What Lies Ahead For Stocks, Gold, Silver And Platinum After The Greek Default? [View article]
    User353732,

    Knowledge that an event will surely happen is different than the event actually happening. A real de jure default is more important than a de facto default. 'De jure" means "as a matter of law", and, so far, the Euro-zone nations have refused to acknowledge a legal default, preferring to kick that can down the road.

    I am talking about a final recognition of the default, by Europe, and that seems to be on the way, in the next few months. That doesn't mean it will absolutely happen. It might not. It seems likely, right now. But, even if it happened 2 years from now, the overall investment picture, and suggested response to such an acknowledged default would remain the same.

    De jure default will result in an exit of Greece from the Euro zone. People who believe that Greece can stay in the Euro after a de jure default do not understand currencies. The Euro is not like the US dollar in the mid-1800s, when many US states defaulted. The dollar, back then, was a commodity-backed gold specie currency. The Euro, in contrast, is a fiat currency, based upon debt. If Greek debt is ineligible for use in trading with the ECB, Greece must exit.

    Also, a lot of financial players, who think they are very savvy, have bought heavily devalued Greek bonds from big banks, thinking that they would make money from the triggering of credit default swaps. Technically, the ISDA members could refuse to acknowledge a Greek return to the drachma as a "default". They could claim that bonds issued under Greek law can be legally paid in the currency of Greece, whatever that currency might be.

    Such a claim might or might not hold up in a subsequent lawsuit. However, legal actions wouldn't be resolved for a year or two. In the meantime, ISDA members could allege that whatever exchange rate prevails at the moment of Greece's exit is the exchange rate for bond payments. Thus, even if an 80% devaluation of the drachma commences after that, no default would be recognized. Those speculators will take billions in losses, and would be forced to engage in asset sales.

    The de jure default of Greece, and an actual cessation of payments (which has not yet happened) would also prevent big banks from listing Greek bonds at par value "for investment" according to accounting rules. They would need to acknowledge the losses on their books, immediately, and that is likely to induce the need for capital raising.

    A de jure Greek default will also temporarily raise the market's consciousness of the high likelihood of future defaults in other nations. That may cause a loss of confidence in sovereign bonds in general, including those of Portugal, Ireland, Belgium, France, the USA, etc. That is very bullish for precious metals, longer term, but, in the shorter term, it may cause bond values to decline, requiring additional asset sales to raise liquidity for trading entities forced to mark assets "to market".
    Feb 6 06:34 AM | 4 Likes Like |Link to Comment
  • CME Is Legally Liable For MF Global Customer Losses [View article]
    Regulation of the type we have today will never accomplish its aims.

    First, the strictest punishments must be levied against perpetrators whenever fraud and/or misrepresentation is found to have occurred.

    Second, regulation of a type we don't yet have must insure that financial institution corporate structure remains small. No firm can be allowed to get so big that its incompetent management will result in an implosion of the entire economy.

    Third, the most effective "regulation" would be to allow financial firms to completely fail when they behave in an irresponsible and/or incompetent manner. Let their principle players jump out of tall buildings if they wish, but do not allow them to socialize losses while privatizing gains.

    Fourth, re-institute the gold standard to prevent money printing. Money printing is a fraudulent method of financial repression whereby wealth is shifted from innocent Moms & Pops, to corrupt manipulators and profligate governments, on the pretext of "saving" the economy.

    Once these four things are done, further regulation will not be needed.
    Jan 15 03:54 PM | 1 Like Like |Link to Comment
  • How Gold, Silver And Platinum Will Respond To ECB's Money Printing [View article]
    Sorry if I was less than clear. If you go to the ECB website, you will find that it defines an MRO as a "main refinancing operation" and an LTRO as a so-called "longer-term refinancing operation". Longer-term refinancing can mean a number of things, but, at this moment, I believe they are talking about 1 or 3 year repos.

    The next unlimited 3 year operation is scheduled for the end of February. However, the ECB has LTROs scheduled for the end of every single month of 2012. It has not specified, or I cannot find information on the specification, as to what the exact lengths of those other LTROs are going to be.

    I have stated that the 3 year version is likely to happen every two months, but they could happen more often, or 1 or 2 year or, even 5 year, versions could happen in between the others. It is impossible to predict exactly right now. But, even when banks have borrowed for 1 year, from the ECB, they have always been able to renew and roll over the loans when they came due, as well as expanding them.

    One thing is clear. There is NO REASON to have added such incredibly long repo terms if this were not designed to help banks buy European sovereign debt. I am assuming, and I think it is a reasonable assumption, that ultra-long term money is going to be freely available until sovereigns are able to sell enough bonds to "stabilize" the Euro-zone core.

    In other words, I expect the banks to be supplied with sufficient cash to buy as many bonds as sovereigns would have liked to sell to the ECB, if direct sales were not prohibited. That is more money than might have been supplied to the market if the ECB were buying directly, because the banks are also likely to want and use some cash to shore up their balance sheets.
    Dec 24 12:57 PM | 2 Likes Like |Link to Comment
  • How Gold, Silver And Platinum Will Respond To ECB's Money Printing [View article]
    In three years, it is more than likely that Angela Merkel and her conservatives will be gone, and the opposition in power. The opposition is very Euro-oriented, and will bend over backwards to accommodate the ECB, even if it chooses to do overt QE. Meanwhile, this backdoor QE will kick the can long enough down the road for this to happen.

    Germany may eventually create its own national currency to offset the outcry from its people, but not until a lot of actual price-oriented inflation happens, and not just due to the precursor, which is "monetary inflation". The new Mark is likely to be jointly legal tender with the Euro, inside Germany, with Germany nominally "staying" inside the Euro-zone. That won't happen, however, for many years.

    The process of recreating a currency will take 5-10 years. During that period, the Euro will be worth progressively less and less in buying power, just like its paper dollar/pound counterparts. The European money supply will be dramatically and permanently increased, and a lot of Euros will be used to buy precious metals. At the end of all this commotion, in fact, gold may well end up, once again, as the only reserve currency, and the anchor of world finance.
    Dec 23 06:41 AM | 8 Likes Like |Link to Comment
  • How Gold, Silver And Platinum Will Respond To ECB's Money Printing [View article]
    Like repos by the Fed to its primary dealers, although LTROs must, theoretically, be paid back at some future time, they will probably be the subject of endless renewals upon "need" and request. Besides, right now, if the banks in Italy, Spain, etc. don't buy their government's bonds, those governments will default, and the banks will fail anyway, which is also a breach of fiduciary duty. So, it is better from both a bank executive, and bank shareholder's point of view, to earn a temporarily huge profits, by helping the ECB kick the can down the road.

    Who knows what the future holds? But, three years is a very long time. And, at some point in the future, once the politics have quieted down, no doubt the banks and politicos can modify the EMU treaty to allow the ECB to do a one-time purchase of bonds sufficient to recapitalize banks that have invested heavily in sovereign debt, pursuant to these LTROs.
    Dec 22 04:10 PM | 9 Likes Like |Link to Comment
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