Spartacuss

Gold Party Intermission Is Nearly Over

Excellent article, nothing wishy washy or guarded...say's it like it is.

I wonder though, are we at a magic tipping point? Could there now be an exodus out of the dollar? Surely this must come to pass. I wonder how act one starts.

Roubini Sounds the Alarm (Again)

Where, oh where is that monkey in the woodpile?

Without doubt there has been an easy money carry trade influence of major proportions creating yet another bubble. I have long held that the real danger is not in the bubbles themselves, but in how rapidly they occur. While I don't have the stats to show, I think it is fair to say that relatively, each new bubble occurs in about half the time of the previous one and thus we reach a point eventually where we cannot create another new bubble anymore as the cost becomes unbearable. I.e., the fear factor.

I posit that we are there and this next POP is going to be a doozy, a free fall brought about by the big banks going from long to short in a heart beat...us little guys will be eaten alive. However, I am betting on a flat market until after the elections, but then too the waters are getting a little roiled and if the fear index is as high as I think it is, all bets are off.

To be safe, is to sit in cash or precious metals and perhaps both.

Is This the Long Awaited Correction?

Of course, the big banks borrowing at zero and rapid trading without risk does throw a bias on all this as they have been into the equities market big time from what I am told. Will they chose to go short now big time and reap even bigger rewards?

This whole market is nothing but an interventionist night mare and I for one wouldn't be surprised at anything, however, I do think the Fed has a plan for equities to shore up pension plans etc., etc. so who knows?

George Soros: The Guru Outlook

Perhaps the man has a conscience and it bothers him a lot...in fact when it comes to the socialist "redistribution mantra" perhaps I should send him my cred's for a little easing of his conscience.

However, that said, the man is good at what he does and his views are not to be taken lightly. And he is not the lone wolf out there either on this issue. Although, it seems, that no one including him wants to go to the brink: were are in fact screwed and the dollar is toast.


On Oct 29 09:29 AM p church wrote:

> If Soros is so smart, why is he a liberal?

Checking in on Gold

Todays upsurge shows the tight relationship to the dollar as both gold and oil made the corresponding move on dollar lightness.

And, as the Bovespa was getting beaten down for instance and beaten down hard, as soon as the dollar hiccuped, came roaring back.

So, as is posited by gurus greater than I the mantra is "watch the dollar". Further to this is to point out that the Fed has no choice but to debase the dollar despite rantings to the opposite. The reason is that the debt has reached a tipping point in that there is no way to balance the budget anymore; deficits will be de jour permanently and couple to that is the simple realization that rates CANNOT BE ALLOWED TO GO UP, as the debt service on public debt will eat the whole cake forcing more deficit. Couple that with declining tax revenue and we have the perfect storm.

The dollar is doomed. Period. Sure, in the mean time we can meander on the course to doom, but doom is certain and the only real haven in all this is gold, not as an investment, but as a safeguard against the declining dollar, ditto for oil with one exception, and that is this: once serious depression sets in, oil consumption will crash and so will price on oil comparitively. And if the electric car ever becomes the new standard, the same applies to oil. We are on the cusp of dramatic changes here in America and not just economic.

Futher, with P/E ratios shoved to the moon, equities are looking for a substantial reset and that includes oil stocks. We live in very treacherous times...take nothing for granted and be as conservative as possible.

Gold: A Bubble Brewing?

In short (pardon the pun) hang in there. Obviously, any market has it's up's and down's. I think too, that we could be in a holding pattern for a while, but not a long while as the wizards in Washington and at the Fed will soon signal that the liquidity wash will continue unabated. I say that because they have to. Public debt service now will one of the major obstacles that will prevent the Fed from raising rates. I think though that a head fake by the Fed is in store consisting of language mostly that they are taking steps to shore up the dollar and all should have confidence.

Once that phase is over we will have a new level of need for further liquidity probably sooner than anyone thinks and as the dollar fails to seriously rally, gold will continue it's climb, it is a sure thing.

Roubini Doesn't Believe in Gold

Again, one has to separate the investors from the speculators. I define an investor as one who latches on to a good thing and holds both for future value and for earnings. In this case, we know, gold earns nothing. But there is the magic because in order for something to earn something, risk is involved. There is no basic risk in gold, it is what it is, won't tarnish or rot and it doesn't take a whole lot of it to represent considerable value, so it stores well in hidden places.

So, then, what is the need for gold? Protection, period. Much like the gun in the closet, always at the ready when you need it. OK, in the case of gold, protection from what? Inflation, you bet. Confiscation? This time around if the government wants to confiscate gold, I seriously doubt anyone is going to willingly turn it over. And depression, well, as said, we can't have a depression, at least not in the normal sense. Of course, there is a cost for all this avoidance. For now, Roubini is most likely correct. However, the spending in Washington is not going to abate. IN FACT, THE PUBLIC AND PRIVATE DEBT HAS NOW REACHED THE LEVEL WHERE IT CAN NEVER, EVER, BE REPAID. Let that sink in as it assures a runaway inflation. How soon? No one can answer that, however if we look at the fresh 11 trillion of liquidity pumped just in the span of a year or so, I would tend to want to believe it will be a lot sooner rather than later as the reflation effort has just got underway big time and a lot more to come.

We are in serious trouble here beyond the issue of gold, we are now entering a new phase of government: statism. Statism will destroy capitalism and is already well underway in that regard. Soon, government will be forced to provide more provinder to more industries with an eventual Czar at the head of all board room meetings. It's going to get very interesting.

How Will the U.S. Recover from the Debt Crisis?

This all is what we have inherited via Keynsianism and Socialism. Note that even witth the abolishment of social programs (very unlikely as this is political suicide) the debts can never be repaid.

What every one misses it seems to me is that there is this "hockey stick" phenomena. This in mathematics amounts to a parabolic function where the rate keeps increasing without end and once a certain threshold is reached the funcition essentially becomes vertical; the hockey stick effect, the big L. We are there, and there is no way we can even monitize the debt anymore because the function is now moving so rapidly that any measure of monitization will be swamped by new debt faster than older debt can be monitized.

Folks we have entered the monitary twilight zone of runaway inflation. It doesn't seem that way as for now we are deleveraging, however this deleveraging phase will not last long, perhaps another couple of years but look out! The expansion of the Fed balance sheet will turn into money on the street before you know it and then the moon shot: runaway inflation and it cannot be avoided.

What to do? Buy precious metals, what else is there?

Roubini Hates Gold: Is He Wrong Again?

After reading the article and all the comment, most anyway, it strikes me that so much is left out of this. For instance, China's avowed interest in gold. Also, the little guy is not doing gold, he can't afford to buy it for the most part, and now with prices high he is interested in selling his wedding ring instead.

The driving force here is not fear or greed, it is purely a monetarty issue which forms from the outrageous money creation at the Fed and for all of you that are not aware, the government cannot pay it's debts with deficit now reaching the magic level of over forty percent of budget and scheduled to get worse. In short, the dollar is now absolutely doomed; it cannot, it will not be saved, period.

Roubini may be totally correct in short term and I for one don't care because I know that as time goes by gold has to revert to it's true role as money, just how this comes to pass in terms of execution we are all left to ponder, however, it will happen unless we get the New World Order situation where all bets are off.

My motto is: don't trade gold...hold.

Mid Week Gold, Silver, Oil and Natural Gas Trading Report

Ultimately it is the Fed's game while we watch from the bleachers.

It was reported today that some sell off in treasuries is occurring. Does this signal the end of quantitive easing? So, we are left to guess and wrangle in the trenches. Seems sure though that holding cash is a losing bet; of course that's the way the Fed wants it. Spend...oh, please spend, as spending will raise our boat up high in the water. But spend on what? Equities are waaay over bought, which of course doesn't mean that the engorgement thereof will not continue. Unless a catalyst appears, and I think it will with commercial and home mortgage problems set to blow up in our faces again and then real profits by companies have yet to show up and how can they? I don't see consumerism on the rise, perhaps just not as rapidly declining, but not clearly rising.

Another small mote is the Yuan. Being debased also as other currencies debase to avoid an attack on their export trade. See, economies are like blobs of jello, you can poke and push, but you always wind up with what you started with; same shape and same size. You only get more jello when you make more of it and money is not jello, it is much more like a cattle prod...poke...push...d... and then when you take the prod away you discover that it is still the same blob, however you may have pushed to a new place...on the floor.

Drink heartily. The cup of hemlock rests there on your lips and thirst is aplenty.

Some Cracks in the Bull Market's Foundation

Annnnd, the catalyst just might be....more defaults on commercial and home mortgages and a lack of real profits by the companies whose stocks are waaaay overbought. As the Chinese say, "no tickee, no laundry", and the recovery ticket is: consumer purchasing power, and it ain't there.


On Oct 22 04:07 AM Moon Kil Woong wrote:

> Stimulus money is still on the way. I suspect that the market will
> hold it's breath until it's widely distributed. Then in 2010 we will
> start to ask, what comes next. That's when questions like can' we
> blow an evern bigger hole in our fiscal boat with more deficit spending
> will come up along with if we don't isn't this rally just a short
> term government and Fed induced mirage backed by easy money and a
> depreciated dollar.
>
> If you were wise you would ask yourself this today, but don't expect
> the market to react to such insightful analysis. It usually needs
> a catalyst to crystalize its thinking.

Global Liquidity Glut Bodes Well for Gold

The liquidity glut only applies to the big players here. Joe six-pac is not able to borrow and thus his obligations are exceeding income and hopefully he is still employed.

You fail to mention that we are witnessing the biggest monetary extortion ever with the obvious result of runaway equities and I doubt not that the Fed is buying those too to create the image of prosperity.

And now we look at the coming defaults of commercial loans on top of a new and viscous wave of home mortgage defaults. Small businesses can't borrow, Joe can't borrow and job losses are continuing so if there is a glut it is a glut of hard times while the big banks are ponying up to the public trough...do you connect any dots here?

The Greatest Depression Is Coming

Of course, and always, socialistic solutions. This kind of denial socialist thinking is at the very core of our problems. Affordable housing brought this mess about while the social engineers in congress were busy giving other peoples money away so that community restoration could become the magic elixir for the poor.

Why can't you people ever understand that the poor will always be with us for a variety of reasons. Underprivileged...no. Undereducated...no. Undermotivated...yes. And the more your give other peoples money to the poor, the more poor you are going to have.

However, not matter how desperate and troubled an economy gets, it is always the fault of the capitalists. Hell, if weren't for the capitalists we would all still be living in caves...uh, perhaps that is what you secretly desire.


On Oct 17 07:32 AM LilBob wrote:

> To me this is fear mongering, brought on by a lack of willingness
> to understand what's really going on in the economy. During the Bush
> administration we had an increase in the concentration of capital
> in the hands of the wealthiest Americans, just like we saw in this
> country during the "Robber Baron" age from roughly 1895 to the early
> 1930s. In a capitalist economy, there are two kinds of capital: investor
> capital and consumer capital-we can also refer to these two types
> of capital as supply capital and demand capital. When capital becomes
> too highly concentrated in the hands of investors while working class
> wages stagnate, we end up with a situation where sales decline generally
> while new more aggressive investment schemes are fabricated to create
> the illusion of increasing wealth for the investment class. The only
> solution to this problem is for social phenomenon that increase consumer
> capital-restore the consumer base-thereby making it possible for
> businesses to keep their doors open. The reason we are in a recession
> is because of several years of misperception on the part of the American
> public-people believed that their wealth was increasing and loaded
> up on debt when their actual wealth-as measured in wages and ability
> (from say, job benefits) to access critical services (such as health
> care) was in steep decline.
>
> As long as there is a willingness to accept the reality of our situation,
> and to address the underlying root causes of the predicament, then
> any disaster may be averted.

Sold Gold

The usual lament. Investor versus trader; two distinct mentalities.

In the world of today, we live in a dicey environment of inflation versus deflation and the "what next lunacy" of the powers that be.

Frankly, I favor an intellectual environment of "cause and effect" and "trends" rather than the emotion infected environment of "profits now" never mind the fundamentals. Of course, each to his own flavor of things. No problem there.

I think the deciding factor is appetite. I do have to admit that there is a rush associated with day trading, however, one has to spend the day hovering over and tracking a number of issues simultaneously and it is time consuming to say the least; a lot like sitting in the casino endlessly watchng the numbers or symbols roll. Just not for me.

Then there is the problem of getting stopped out. Maybe one should say "faked out" . I have had this happen a number of times and to my anquish lost twenty percent on the stop to only anquish further as this was just a temporary dip...then how to get back in...wait for another dip...well, that often is a long wait.

Let's face it, trading and or investing is not for the faint of heart. Sometimes it is a real adrenalin rush and sometimes it is, well, poop. And now, in this time, there is just not a real safe haven as we are all sucked in...no nifty fifties this time around, just wags. Good luck all. This latter for all those who are clued in to something real.

Why Everyone Is Wrong About the Inflation/Deflation Debate

The Fed is NOT in control...no, the opposite, out of control. No one including the author gets it it seems.

The Fed, this time cannot raise rates, to do so would be tantamount to suicide as the US governement is bankrupt. Yes, bankrupt. In no way can the the government repay it's debt and thus the only worthwhile effort now is a feeble effort to reflate with the issuance of greater fiat at lower rates and is locked there for better or for worse.

We are at financial war, trying to reflate while trillions of deleverage is going on...a tug of war. Frankly, I don't think the Fed will win this one as the total amount of deleveraging forces are in the high trillions and thus a realistice reflation scenario would be a multiple of what the Fed has done so far and if pressed and they will be pressed with the new deleveraging forces of the coming home mortgage and commercial paper hit home in this next year which for some strange reason no one talks about. This author, lightly touches on the base line subject: defaults. Very deflationary. That in conjuction with outrageous generation of new money to stem the tide.

What I cannot understand is why no one seems to take the obvious in your face facts and write about them and their consequences.

We are screwed folks! Perhaps no author wants to come out and say that. Soon, we will come to realize that all new bubbles will be short lived as the dollar crashes, why? Because the Fed and the government have no other choice: inflate or die.