Dave Kranzler's  Instablog

Dave Kranzler
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I spent many years working in various analytic jobs and trading on Wall Street. For nine of those years, I traded junk bonds for a large bank. I have an MBA from the University of Chicago, with a concentration in accounting and finance. Currently I co-manage a precious metals and mining stock... More
My company:
Golden Returns Capital
My blog:
Investment Research Dynamics
  • The Government's War On Truth 2 comments
    Jan 25, 2013 11:04 AM
    The classical or orthodox gold standard alone is a truly effective check on the power of the government to inflate the currency. Without such a check all other constitutional safeguards can be rendered vain. - Ludwig Von Mises, "The Theory of Money and Credit"

    Well, we saw evidence last week that Von Mises was right about fiat currency and constitutional safeguards when nearly every Congressman voted in affirmation - and Obama immediately signed - a law which makes it illegal to have an organized protest in any location where Secret Service personnel are going to be hanging out: LINK Punishable by up to 10 years in prison. Think about this Occupy and Teabag people, if the Government knows in advance of one of your protest gatherings, they'll send some Secret Service people to that location and this law says the local police can arrest you if you show up to have your gathering. I guess in the course of his Constitutional Law studies, Obama forgot to study the 1st Bill of Right - aka the 1st Amendment. Bush referred to the Constitution as merely a piece of paper, Obama has waged a serious war against the Constitution.

    (Note: subsequent to my writing this, new home sales for December were reported: plunged nearly 8% and the seasonally adjusted annualized number missed expectations by nearly 20,000 homes)

    The housing market has been highly promoted by the media, the Government and Wall Street as "in recovery mode." I've been working on an in-depth piece on the housing market but it's taking more time than I expected. In the course of my research, I've come up with some interesting tidbits that I'll share now. First, it was reported yesterday that Robert Shiller, regarded for some reason as the foremost housing market expert (I guess in the same vein that Bernanke is considered the leading expert on Depression avoidance), stated that the housing market decline could resume: LINK Ya no kidding. In fact, without the help of $100's of billions of Government and Fed subsidies since 2009, it's likely that housing would already be a lot lower.

    I want to present just one chart that refutes the notion that the average person in this country is in any kind of position to help support any kind of meaningful housing recovery:

    Consumer Debt (click on chart to enlarge)

    (click to enlarge)

    Hmmm...what happened to the idea that consumer was "deleveraging?" This chart - from the Fed database, seems to refute that notion. We know that the size of the labor force continues to shrink. We also know that on an inflation-adjusted basis, real income is declining. Now we see that consumer debt levels are rising quickly. Let me ask this simple rhetorical question: how on earth can there possibly be any kind of real housing market recovery given the above facts?

    One more quick note on yesterday's jobless claims number. The Government report noted that the data included "estimates" of the jobless claims filings in California, Virginia and Hawaii. There's no way in hell that yesterday's supposedly "good" report had any kind of statistical validity. It's just another example of the media spin and an increasingly Orwellian Government.

    Before I finish for the weekend, I thought I'd leave you all with some Friday chart porn:

    (click on chart to enlarge)

    (click to enlarge)

    In other words, don't sweat this latest attempt by the Government/Fed to knock down the price of gold and silver, the trend is your friend and this is nothing but another in the long line of tremendous buying opportunities. Unlike the extreme hubris exhibited by Obama/Bernanke, we all should be a little grateful that these attacks on honest money occur because it enables us all to exchange our increasingly devalued fiat dollars for true money. Have a great weekend.

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Comments (2)
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  • cannon fodder
    , contributor
    Comments (736) | Send Message
    You've violated several tenets of newspeak.


    You could be a thought criminal.


    25 Jan 2013, 06:02 PM Reply Like
  • alsobirdman
    , contributor
    Comments (433) | Send Message


    While I am in the PM bull camp, for now anyway, I always rely on looking around me to get a feel for where things are headed. I do look at government numbers and take them with a grain of salt, but I do not think is a conspiracy of manipulation.


    I travel a bit for work, and the difference between now and two years ago is remarkable. Everywhere I go I see packed restaurants, hotels, airports, roads. Yes, perhaps there is more unemployment than I'd like to see, but the unemployed aren't the ones buying houses, cars, etc. And speaking of yesterday's housing numbers, I would expect nothing less for this time of year. Again, I compare the numbers to two years ago. When I look at real estate sales listed weekly in my local paper there are easily three to four times as many. A good friend is a high-end home builder. He is seeing increased business.


    My biggest fear now for all of my PM trades is that the fear trades may be unwinding. Sure there are plenty of people who will not sell their PM's until the reach a stratospheric range, but you see by the recent decline in treasury prices that people are selling them and looking into equities. I doubt they are rushing from t-bills into gold or silver.


    I do see further upside yet, and even bought more NUGT and I'm looking for a re-entry point after exiting my AGQ position last week. But I'm just not quite as bullish as I was a year ago.


    And, I'm certainly no chart expert, but doesn't the pennant your chart shows indicate a major move, but does not indicate with a great degree of certainty which direction? Personally I hope you are correct and that move is up.


    Thanks for the article.
    26 Jan 2013, 10:37 AM Reply Like
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