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Michael Clark

Michael Clark
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  • Greece Bailout? I Don't Think So [View article]
    Didn't Germany have a failed bond auction last week?

    The thing is, this 'deprivation' is not going away soon. Contraction for another decade. A beast eating on a smaller beast eating on a smaller beast.

    Colorado Springs has started turning out the streetlights, laying off police and fire personnel, stopping buses from running at night and over the weekends. This will happen everywhere, more and more.

    It won't end until we pay off the debts. Are we starting to understand this yet?
    Feb 12, 2010. 02:56 AM | 2 Likes Like |Link to Comment
  • Peak Gold? [View instapost]
    Ok, John: dreamtime. I was on holiday with my wife's family. We were staying in a nice hotel, sun outside, ocean lapping against the beach. Beautiful landscape. The hotel itself was very tricky, you had to go through a very labyrinthine path to find your room. It was like the hotel, itself, was a set of drawers; one had to climb out of one drawer successfully to get in to the next drawer. There were a lot of unexpected turns to get from one door to the next; and there were secret doors you had to push on to keep moving.

    I finally made it back to our room. My brother was there watching Financial News Network. He turned to me and said: 'Did you hear -- major gold shortage!" I said: 'What's happened to the price of gold?' He demonstrated with his finger: gold through the roof; with an insignificant pullback.

    What does it mean? It was an interesting movie if nothing else.

    If suddenly everyone in the world wants to own gold/silver, there is not enough gold and silver in the world for everyone.
    Feb 12, 2010. 02:44 AM | 1 Like Like |Link to Comment
  • A Greek Crisis is Coming to America [View instapost]
    American states will begin to default and run to the Washington begging for money. Greece is number 1...Florida. California is going to be like Germany running to Washington. State insolvency is goiing to make the federal deficit even worse.

    History is going to show that borrowing more money to fuel more insolvency (Greenspan-Bernanke 2000-2010) was the proverbial fighting the forest fire with gasoline. The financial San Adreas Fault is getting wider and more implosive.

    We should have chosen modesty in 2001 (stepping back, moving rates up) instead of flamboyant expansivism (spendspenspend borrowborrowborrow) we would not be in this mess today. Will we learn from our mistakes? In 2037 we should remember this conversation.
    Feb 11, 2010. 02:49 AM | 2 Likes Like |Link to Comment
  • The 10-Year Treasury Signal [View article]
    Yields are rising (I'm thinking) BECAUSE Ben Bernanke's QE is ending. Ben kept interest rates artificially low for too long thinking another bubble was just the ticket. When Ben steps back, the market will begin to adjust (it is already adjusting a bit). Also, the lack of foreign buyers is becoming apparent. Who wants to buy TBonds when their yields are being held down by the Beach Bully (BB)?

    America has needed higher rates since 2000. The Fed has been hitting the gas every time the markets hiccuped, micromanaging the world, attempting to keep inflating each time the nature deflation raised its head. (I see this image of the cartoonish BBBernanke rushing about with huge wooden mallet, seeking to smash the head of the squirrel every time it came up out of one of many holes.)

    I agree with acttang. We need to watch the short-term rates too. If all rates rise together, this probably means the market is fearing inflation. But it's hard to really understand now what the market is 'fearing' or 'feeling' with so much governmental panic buying and manipulation of the credit markets.

    Long-term yields are ready to make another strong move up, after declining for the last month.

    Another reading of higher rates -- beside fear of inflation -- is fear of an American sovereign debt default. People no longer want to buy American debt because they no longer feel America is a good risk -- and this would be a rather shocking historical 'trend change', making the longer-term TBond, indeed, a junk bond.

    If all nation's bonds become junk bonds, because all nations now are bad risks to be able to pay their bills, then where does the money go? Cash? Or gold/precious metals? If so, what happens when the gold shortage recognition hits?
    Feb 11, 2010. 01:36 AM | Likes Like |Link to Comment
  • The U.S. is at "zero hour," says Marc Faber, where extra debt growth won't add anything to GDP growth - and he says Treasurys should be "junk-rated." (video, 5:34)  [View news story]
    Interesting perspective, Greenzulu. And I think pretty accurate.

    Every significant society has to embrace both sides of the whole, individual capitalism and communal socialism. But BALANCE is a problem, and is the key to remaining vital. Too much socialism can result in stagnation and suffocation (think Europe, and American 1970's); too much capitalism can result in the banks commandeering the society for their own good (think 2001-2008, think 1925-1935).

    Vital societies need both forces -- and a balance of these forces, with resultant political struggle -- and the sharing of power between these two forces, right and left, male and female, growth and rest, Time (Modernity) and Eternity, is the Wisdom that creates and re-creates the world order.

    Awareness of the cycles of creation, destruction, and re-creation will makes us more comfortable with the realities of capital expansion, capital contraction (rest, and 'dreaming' the next stage of our collective/individual life), and capital re-expansion.
    Feb 11, 2010. 01:16 AM | 1 Like Like |Link to Comment
  • Astounding Graph [View instapost]
    You've hit on it, John!

    Should government fiscal practices attempt to save for a rainy day? YES. Remember the Biblical Joesph: 7 fat years followed by 7 lean years. It's a law: only 7 is symbolical. 18 years seems to be the magical economic cycle number.

    Should tax revenue and expense be managed to produce a decline in the blue line in good times to counterbalance the inevitable increases when GDP slows or declines? ABSOLUTELY. Remember the Lao-Tse quote: 'When in darkness think of light; when in light think of darkness.' When in wealth, think of poverty; when in poverty, think of wealth.

    Actually, I think taxes need to begin to go up as we approach the end of a business expansion. Taxes should be very LOW as a business expansion begins (1983, 2019, 2055...) and should be raised near the end of a business cycle (1965, 2001, 2037...).

    If we remember we CANNOT grow the economy during a Night-Cycle, then we do not throw money at a governmental 'fix' (job growth) but use government money to pay down debt and for social programs that keep the society from imploding into open warfare during the enforced period of gestation and rest (sabbath). During the 'Night" (2001-2019) we share. During the 'Day' (1983-2001; 2019 - 2037) we go our separate ways, take risks, expanding businesses, amassing fortunes...but we also beware over-expansion of debt, bank corruption, and greed run amok as we approach the magic hour (2037) when everything stops again. Let's be prepared next time, with our eyes open instead of eyes wide shut.

    Had Greenspan begun to raise rates in 2001, slowly, instead of lowering them in a panic, we would have avoided all the crap we have gone through this past decade. Panic is never a good response to a change of fortune.
    Feb 10, 2010. 11:29 PM | 1 Like Like |Link to Comment
  • Seeking Alpha is looking to hire three talented bloggers that specialize in:
    1) Tech stocks and investing.
    2) Global markets and economics.
    3) Consumer-related stocks and investment themes.  [View news story]
    Hire? Tech stocks? I like tech stocks. What are the hours? What's the pay?
    Feb 10, 2010. 11:09 PM | 1 Like Like |Link to Comment
  • European Union: A Tale of Two Futures [View article]
    A two-tiered Euro? One for the rich nations; and one for the poor nations. That's like having a Deutschemark and an Italian Lira isn't it?
    Feb 10, 2010. 10:47 AM | 1 Like Like |Link to Comment
  • Gold: An Ugly Chart in Just About Any Currency [View article]
    All the markets are manipulated by Big Money. That is no Conspiracy Theory. That is how financial markets work. It's not like a soccer game, with a relatively level field. Big Money uses the financial markets to get as much of the Small Money as it can. Big Money makes a bet and then uses all of its money and its friends' money to drive the market in the direction they want. When Small Money starts to come in to the rally, Big Money sells to Small Money and abandons the position. And the late-comers (generally, Small Money) watch the value of their positions deteriorate.

    And when Big Money makes a Big Mistake, the go to the government and whine, and cry and threaten, and they get the government to back them back their losses from (again) Small Money, the taxpayer. Not a whole lot different than Las Vegas. If you beat Las Vegas too much, you end up in a hole in the desert.

    Is this an unreasonable interpretation of reality? You tell me.
    Feb 10, 2010. 09:59 AM | Likes Like |Link to Comment
  • Gold: An Ugly Chart in Just About Any Currency [View article]
    Ascending triangle in the weekly charts, approaching the apex, suggesting an upside breakout.
    Feb 10, 2010. 09:52 AM | Likes Like |Link to Comment
  • Gold: An Ugly Chart in Just About Any Currency [View article]
    GLD was trying to put in a double bottom. Now it's trying to put in a reverse head and shoulders bottom.
    Feb 10, 2010. 09:46 AM | Likes Like |Link to Comment
  • Don't Be Fooled if a Greece Bailout Emerges, It Solves Nothing [View article]
    Actually, markets breathe. They inhale; and they felll for 10 days. Then they have to exhale. We'll have a mini-rally. It is caused by the breathing process. Rationalists attribute the movement to cause and effect; but, in truth, there is no direct connection between the ideas of Negative Greece and the ideas of Positive Greece and the market suddenly rallying.

    The market breathes in and becomes oversold, relatively; the market breathes out and becomes overbought. If the market goes up during expiration periods than it goes down during inspiration periods then we have a bull market.
    Feb 10, 2010. 09:44 AM | 1 Like Like |Link to Comment
  • When Germany Bails Out Greece [View article]
    All the squirming could be entertaining were it not a sign of our so-called leaders having nervous breakdowns.
    Feb 10, 2010. 09:16 AM | Likes Like |Link to Comment
  • When Germany Bails Out Greece [View article]
    Bad precedent: Greece first; Spain next; Italy next; then Portugal. Where does it end? Maybe Berlin should be the permanent EU capital and run ALL the financial, political and military affairs of the states of the EU, if they can only get the French to sign off on it. It would certainly be more efficient that way.

    Germany is the father. It's not easy to discipline all those grown children. Especially now that Greek Labor Unions are marching and setting fires and throwing bottles and refusing to be reasonable.
    Feb 10, 2010. 08:54 AM | 3 Likes Like |Link to Comment
  • Bad Momentum, Bad Fundamentals and 10,000 in the Rearview Mirror [View article]
    The problem is NOT entitlements. The problem is financing the entitlements. We've all been 'donating' social secutiy money to the government all our working lives, so we could get money back at the end of our working lives. But the government has been spending that money as fast as they can, assuming they will be able to bring new ponzi boys and girls into the system to make up for their profligacy.

    Social security is NOT welfare. Social Security is a return on our investment, in a much truer way than TARP is/was.
    Feb 10, 2010. 08:37 AM | 2 Likes Like |Link to Comment