There is always a war going on within the market between the bulls and the bears. No, not Spain versus Russia or any other interpretation that only serves to confuse the average layman. It is the struggle to gain wealth by directing the stock market to your thinking about the economy. Within this conflict is the tools that flows big money.
Individuals no longer affect the market. The market moves from institutional money There are two camps to activation. The larger uses the basic supply and demand stats. The fundamentals of a companies product. The other is technical. Analysts watch charts with support and resistance lines to the price of a companies stock. They have many other indicators like volume (which I use)MACD, RSI, channels, etc. In a free market these two factors determine the trend, however markets are no longer free because government intervenes either directly or indirectly. This makes trading very difficult because you can be right and still be wrong due to some unforeseen intervention. This is the status of the US market at the moment.
That being said, there are other factors that affect the market. When the review of the market is given as news of the day, it focuses on the three main indexes, Dow, S&P and NASDAQ.
This is another, however, generally not talked about problem. These indexes are constantly being updated and changed. The reasons are many, but only one is talked about in the media. They say that to keep these indexes relevant and reflective of the economy, it is necessary to purge "old" industries like railroads and replace them with modern economy tools like technology. They do this also because of mergers or the buyout of a company that is going private.
What They Don't Say
is that many times these older companies are declining in value which will bring the index down in value and that is the real hidden reason that they adjust these indexes. This past week is a perfect example.
From Kitchen To Garage
including the clothes on your back come from this hallmark store. It is a staple for Malls, an anchor to shopping centers and I'll go one step further. I wager that each one of you, dear readers has something purchased from this store, but it was kicked out of the S&P 500 Index this past week. Who? SEARS.
Why?
Because sales are down, profits are negative and this will lower the index average. You see, the people behind these indexes know that if the market falls below a support level, well, then there could be a correction or worse from the selling coming out of the technical camp. This is the behind the scenes battle to keep the market above the recent psych 1400 level. It needs this to become resistance in order to go higher.
This nothing new. In fact if you look at the oldest index, the Dow 30, you will only find one original member:GE. This is market manipulation and it is no different than the Fed, ECB or any other central bank or government action.
LIARS and CROOKS: Both political parties addressing the public about the platform of the opposing political party concerning Medicare. They both have distorted the truth about what their opposition plans to do with the health agency.
Monday, September 3, 2012
Saturday, August 25, 2012
Housing:Another Leak in Dam in Europe...L&C
The expression, "a man's home is his castle," is an important cultural point in America. This is crucial to understanding the effects of the housing crash in 2008. The pundits will inform you that on average 27% of our personal wealth is invested in our homes. This information is the same as those telling us that the recession is over when twenty percent of us still have their homes under water, when 8.3% is still unemployed and only 63% of the work force are actually working. News for you, buddy, this is a depression for all of the above.
Now, this piece is suppose to be about another overlooked problem for Europe. It is. Keep in mind that the US is the largest individual economy in the world and I'm using it as an example to correlate with the present situation in many European nations.
Market Economies
do not perform well while their national housing is collapsing. In the US consumers contribute to two-thirds of our economy. We are getting stable, but we are not doing well in spite of all the money the Fed has printed into our system. Housing is central to our economy, culture and standard of living. At the moment it is still a mess. This is the problem. Each nation is different, but their overall economies will reflect the generality of market economies. Now, a comparison with some European members.
UK and US
were on the same rising price for housing from 2001 until 2007 when cracks began to appear in the US leading to the crash. In Great Britain hosing took a small dive, corrected, continues to rise. Prices have doubled since 2001 which begs the question. Did the UK economy double? No! Did their demographics double? No! So, who is going to buy when sellers want to unload? Collapse time!
Spain
their prices soared even higher than the US or UK and they have fallen even lower. Spaniards hold 80% of their assets in their homes. With youth unemployment over 25%, a nation in economic recession, severe debt problems and falling home values who ya gonna call? GHOST BUSTERS!
France
housing prices doubled, but we can ask the same question about their economy. Recently, it has fallen to .02% and its population grew at .05%. The French keep 57% of their assets in their homes. I hate to tell them this, but delinquency rates tied to mortgages are reaching 15% and when the US crashed that same correlation reached 10%. As CCR would sing, "I see a bad moon rising".
Liars and Crooks:Old Helicopter Ben gets it again. A phony letter from him leaked to the press on Friday saying stimulus is being planned or to that affect which gave the market a rise along with Obama who needs and wants it to stay that way until the elections. Oh, by the way Bernanke's term ends this year. They are so phony! End the Fed!
Now, this piece is suppose to be about another overlooked problem for Europe. It is. Keep in mind that the US is the largest individual economy in the world and I'm using it as an example to correlate with the present situation in many European nations.
Market Economies
do not perform well while their national housing is collapsing. In the US consumers contribute to two-thirds of our economy. We are getting stable, but we are not doing well in spite of all the money the Fed has printed into our system. Housing is central to our economy, culture and standard of living. At the moment it is still a mess. This is the problem. Each nation is different, but their overall economies will reflect the generality of market economies. Now, a comparison with some European members.
UK and US
were on the same rising price for housing from 2001 until 2007 when cracks began to appear in the US leading to the crash. In Great Britain hosing took a small dive, corrected, continues to rise. Prices have doubled since 2001 which begs the question. Did the UK economy double? No! Did their demographics double? No! So, who is going to buy when sellers want to unload? Collapse time!
Spain
their prices soared even higher than the US or UK and they have fallen even lower. Spaniards hold 80% of their assets in their homes. With youth unemployment over 25%, a nation in economic recession, severe debt problems and falling home values who ya gonna call? GHOST BUSTERS!
France
housing prices doubled, but we can ask the same question about their economy. Recently, it has fallen to .02% and its population grew at .05%. The French keep 57% of their assets in their homes. I hate to tell them this, but delinquency rates tied to mortgages are reaching 15% and when the US crashed that same correlation reached 10%. As CCR would sing, "I see a bad moon rising".
Liars and Crooks:Old Helicopter Ben gets it again. A phony letter from him leaked to the press on Friday saying stimulus is being planned or to that affect which gave the market a rise along with Obama who needs and wants it to stay that way until the elections. Oh, by the way Bernanke's term ends this year. They are so phony! End the Fed!
Sunday, August 19, 2012
A Nation Where Anyone Can Be President?...L&C
Do you remember back in your schooldays when the teacher made that bold statement about America? That defining moment in social studies / history class is becoming another facet of life in modern America that is joining the Dodo bird. It is getting so bad that soon that opportunity will even escape the rich. It will land in the lap of only for billionaires and their descendants.
When you look at the way the rich have not only lined their pockets at taxpayer's expense, but they have systematically set up laws and agencies to maintain this status quo. I could give examples with B. Born who wanted to structure derivatives, but Greenspan shot her down and the list is endless.
Who will represent the middle class(if we have any left)and the poor(just about everyone)? The conflict between the workers and those who control production historically centered around the debate whether you were a Republican or Democrat. Today however, President's Obama and Clinton have demonstrated that their door is open to money, big money. The Democrats voted for Bush's tax deductions for the rich, extended the two wars and could add another with Iran, Syria and other hot locations. Does it matter that the "fiscal cliff " is approaching? No one from either party(see they are the same)will ask budget cuts from the military which is the real reason why we have no money left in our budget.
One Month=$100 Million
Yes! That staggering sum was raised by Romney for his campaign in July. Obama came in with a paltry $60 plus million. Can you see the problem here? Big money is dictating the election. When the dust clears and the winner announced, who will come knocking on that door? Not you nor I. We don't have access, time or money. We only offer a vote that is meaningless. Swing states voting matters. The use of big money in these regions to cloud issues, confuse voters, and cause apathy will determine the outcome. The moden vote only serves the principle that this is how a democracy works. Neither candidate intends to respond to the nation's needs. They will only respond to the people and groups which made their victory possible. Don't believe or accept that? Show me results that say anything different. For example, every President from Nixon to Obama has stated that our nation is in danger because we are energy dependent. They said that they would do something about it. Nothing! ...And don't talk to me about alternative energy, CNG(compressed natural gas)or anything else. Private enterprise is moving, although way too slow and government only talks in sound bytes with token change. This year Bush's corn ethanol program will come under attach(should be eliminated)when our corn crop falls from projections and needs. Food inflation is coming, but you will only hear about it here.
Pacs, Activists and A Tax Free Campaign
The Supreme Court ruling that corporations are entities will help destroy the "anyone can be president" concept along with Pacs and the new fringe associations. These unknown groups with a motivated focus with names like,"America for Americans" and "Citizens for the Future" sound all well and good, but their agenda is all status quo and worse yet. These insiders start these groups in preparation for the national election. They get their clearance by advocating a cause like environment(think Sierra Club, which I like as an example). Then, they get a certified tax exemption. Now, they use it to push across their real intentions with no names attached(hide identity) and supported with taxpayer's expense. Their commercials will usually lie about the opponent in an election or the issues. One thing for sure, America is heading for internal conflict because these divisive techniques will eventually come to light and emotions will flair. Our only hope is that a third party gets formed that represents the people and actually does something for the people. Keep this in mind with the approaching fiscal debate, election and issues.
Liars and Crooks: Our government agencies need an overhaul. They have massaged the truth so badly that lies even have a shred of truth in them. For instance, here are two statements from different agencies that makes each agency findings in conflict with each other. A report this past week stated that 44 states had a rise in unemployment and yet, the Labor Dept. stated no change in unemployment. The CPI came forth showing only a .01% inflation increase which is nothing and we all know that gasoline rose over .30 cents-a gallon for the month of July and food cost more every time we go to the store. The real culprit is the Fed which prints money which devalues all our dollars. This unseen tax is killing our way of life. End the Fed!
When you look at the way the rich have not only lined their pockets at taxpayer's expense, but they have systematically set up laws and agencies to maintain this status quo. I could give examples with B. Born who wanted to structure derivatives, but Greenspan shot her down and the list is endless.
Who will represent the middle class(if we have any left)and the poor(just about everyone)? The conflict between the workers and those who control production historically centered around the debate whether you were a Republican or Democrat. Today however, President's Obama and Clinton have demonstrated that their door is open to money, big money. The Democrats voted for Bush's tax deductions for the rich, extended the two wars and could add another with Iran, Syria and other hot locations. Does it matter that the "fiscal cliff " is approaching? No one from either party(see they are the same)will ask budget cuts from the military which is the real reason why we have no money left in our budget.
One Month=$100 Million
Yes! That staggering sum was raised by Romney for his campaign in July. Obama came in with a paltry $60 plus million. Can you see the problem here? Big money is dictating the election. When the dust clears and the winner announced, who will come knocking on that door? Not you nor I. We don't have access, time or money. We only offer a vote that is meaningless. Swing states voting matters. The use of big money in these regions to cloud issues, confuse voters, and cause apathy will determine the outcome. The moden vote only serves the principle that this is how a democracy works. Neither candidate intends to respond to the nation's needs. They will only respond to the people and groups which made their victory possible. Don't believe or accept that? Show me results that say anything different. For example, every President from Nixon to Obama has stated that our nation is in danger because we are energy dependent. They said that they would do something about it. Nothing! ...And don't talk to me about alternative energy, CNG(compressed natural gas)or anything else. Private enterprise is moving, although way too slow and government only talks in sound bytes with token change. This year Bush's corn ethanol program will come under attach(should be eliminated)when our corn crop falls from projections and needs. Food inflation is coming, but you will only hear about it here.
Pacs, Activists and A Tax Free Campaign
The Supreme Court ruling that corporations are entities will help destroy the "anyone can be president" concept along with Pacs and the new fringe associations. These unknown groups with a motivated focus with names like,"America for Americans" and "Citizens for the Future" sound all well and good, but their agenda is all status quo and worse yet. These insiders start these groups in preparation for the national election. They get their clearance by advocating a cause like environment(think Sierra Club, which I like as an example). Then, they get a certified tax exemption. Now, they use it to push across their real intentions with no names attached(hide identity) and supported with taxpayer's expense. Their commercials will usually lie about the opponent in an election or the issues. One thing for sure, America is heading for internal conflict because these divisive techniques will eventually come to light and emotions will flair. Our only hope is that a third party gets formed that represents the people and actually does something for the people. Keep this in mind with the approaching fiscal debate, election and issues.
Liars and Crooks: Our government agencies need an overhaul. They have massaged the truth so badly that lies even have a shred of truth in them. For instance, here are two statements from different agencies that makes each agency findings in conflict with each other. A report this past week stated that 44 states had a rise in unemployment and yet, the Labor Dept. stated no change in unemployment. The CPI came forth showing only a .01% inflation increase which is nothing and we all know that gasoline rose over .30 cents-a gallon for the month of July and food cost more every time we go to the store. The real culprit is the Fed which prints money which devalues all our dollars. This unseen tax is killing our way of life. End the Fed!
Sunday, August 12, 2012
PREDICTION: Second Recession!...L&C
An easy interview reply on CNBC, CNN or any other financial news network is to remind the viewers that the market generally rises in an election year. This allows the "talking heads" on whatever station to bring up conflicting info like low volume, lack of interest by the retail investor(you and me)or any other chart or earnings report that would make one pause to think and doubt the present rally in the market. The host could mention Netflix or Chipotle both down hard this year as the guest would counter with Apple or GE. The station hopes that this will create among its viewers a creditability to maintain its rating power as a status quo force. This is the format. The problem is that it gives out only partial truths in these sound bytes. This is why, dear reader, I write my blog.
Indicators
that you read here won't hardly ever be mentioned on the tube and if addressed, they will be glossed over as in the normal format of these shows. One of the most insightful is the container chart. You see, no matter what is moved or sold, it must be packaged and that package is usually cardboard. If the charts rises, the economy is growing. Conversely, if it declines, it is shrinking. Today, it is pointing lower.
Housing
the media is gushing that reports reflect that housing is finally at a bottom. This is very important because for a service economy. This would boost employment and the economy. These shows will flood you with facts like year-over-year for the first time, housing prices rose. They will point to a smaller inventory of homes on the market, less foreclosures and even Freddie Mac showed a profit with a positive guidance. This is what they won't tell you nor Obama in one of his reelection commercials.
Gary Shilling
of the Case-Shiller index, says we have a long way to go. He and I will remind you that the robo signing disaster has caused a slowdown in the foreclosure process. There are still 1.7 million homes waiting to come on the market. The flood will continue with the number of homes that are under water, just waiting for a price rise so the owners can get out. This could be as many as 24 million homes. There is also a little known housing price chart dating back to 1890 which began the explosion in housing prices and the recent decline is finally getting back to normal. You ask, what price is that? Another drop of 22% and that would reflect fair value in the trend line of housing prices.
Harry Dent
is famous for his correct predictions with his study of demographics. He sees another serious drop in housing which means the economy because the baby boomers are retiring and at best will seek smaller homes. There are 75 million in this age bracket.
Finally, another top analyst, David Rosenberg has presented a new twist which I find very insightful. He looks at the import/export numbers. He found a sharp decline which he says points to a recession. In April the number was 59 and every month since has declined to a recent 46 in July. He further correlates this to US exports and ISM new orders. He finds a high relation at 81%.
I hope this info can help you make smart decisions for your future.
LIARS and CROOKS:This week goes to President Obama who has repeatedly invoked executive privilege. He just changed the state welfare law to allow states to by-pass the work clause. He, along with most presidents have used this technique to circumvent Congress which according to our constitution will write the laws of the nation. The president's job is to enforce those laws not to create new laws like the above and when he changed the immigration law to allow children of illegals to become citizens. Does the constitution mean anything anymore?
Indicators
that you read here won't hardly ever be mentioned on the tube and if addressed, they will be glossed over as in the normal format of these shows. One of the most insightful is the container chart. You see, no matter what is moved or sold, it must be packaged and that package is usually cardboard. If the charts rises, the economy is growing. Conversely, if it declines, it is shrinking. Today, it is pointing lower.
Housing
the media is gushing that reports reflect that housing is finally at a bottom. This is very important because for a service economy. This would boost employment and the economy. These shows will flood you with facts like year-over-year for the first time, housing prices rose. They will point to a smaller inventory of homes on the market, less foreclosures and even Freddie Mac showed a profit with a positive guidance. This is what they won't tell you nor Obama in one of his reelection commercials.
Gary Shilling
of the Case-Shiller index, says we have a long way to go. He and I will remind you that the robo signing disaster has caused a slowdown in the foreclosure process. There are still 1.7 million homes waiting to come on the market. The flood will continue with the number of homes that are under water, just waiting for a price rise so the owners can get out. This could be as many as 24 million homes. There is also a little known housing price chart dating back to 1890 which began the explosion in housing prices and the recent decline is finally getting back to normal. You ask, what price is that? Another drop of 22% and that would reflect fair value in the trend line of housing prices.
Harry Dent
is famous for his correct predictions with his study of demographics. He sees another serious drop in housing which means the economy because the baby boomers are retiring and at best will seek smaller homes. There are 75 million in this age bracket.
Finally, another top analyst, David Rosenberg has presented a new twist which I find very insightful. He looks at the import/export numbers. He found a sharp decline which he says points to a recession. In April the number was 59 and every month since has declined to a recent 46 in July. He further correlates this to US exports and ISM new orders. He finds a high relation at 81%.
I hope this info can help you make smart decisions for your future.
LIARS and CROOKS:This week goes to President Obama who has repeatedly invoked executive privilege. He just changed the state welfare law to allow states to by-pass the work clause. He, along with most presidents have used this technique to circumvent Congress which according to our constitution will write the laws of the nation. The president's job is to enforce those laws not to create new laws like the above and when he changed the immigration law to allow children of illegals to become citizens. Does the constitution mean anything anymore?
Monday, August 6, 2012
New Form of Outsourcing...L&C
...And the pink slips keep coming. The big boys are keeping the stock market at highs and with the media in their pocket, there is little chance that the public is aware of what is happening on Main St. All across this nation small towns and villages have created a new form of outsourcing. The recession has caused them to cut spending due to lower revenues, especially through real estate. In their search to find more money to provide services, a new twist has developed. These small notches on the map can't afford these services, however they are afraid to cut the cord. They may lose more citizens who may move to a more affluent area, which means even less revenues in a downward cycle.
Solution?
Send the work to nearby locations, lower our costs by cutting workers, eliminating space/rental costs and equipment servicing. In Molalla, Ore. they have outsourced their building permit and inspections to Clackamas, County. They saved over $400,000.
Lowell and Westfir, Ore. outsourced traffic patrols and criminal complaints to nearby Oak Ridge, Ore. Oak Ridge then closed its 911 dispatch service and outsourced it to Lane County Sheriff Department. The savings spread along with the idea. Eugene, Ore now gives its legal work to Lane County Sheriff Dept.
There is on record over 700 cases of New York towns and villages off-loading public-sector tasks to larger government agencies.
Not Just Speeding Tickets
In California almost all rural areas use the California Highway Patrol to keep local law and order. In Florida many counties share 911 dispatch service and sheriff patrols. Bottom line: local government employment is following the lead by corporate America. Agencies are cutting costs which sadly means jobs too.
Liars and Crooks:This week goes to Commodity Futures Trading Commission who are about to drop their investigation into the manipulation of the price of silver on the exchange. Amazingly, Bart Chilton, the Commissioner stated,"he believed there had been "fraudulent efforts" to "deviously control" the silver price. Who benefits? JP Morgan and HSBC. Keep this in mind when the OWS stage their demonstration on 17 Sept. as they are carted off to jail.
Solution?
Send the work to nearby locations, lower our costs by cutting workers, eliminating space/rental costs and equipment servicing. In Molalla, Ore. they have outsourced their building permit and inspections to Clackamas, County. They saved over $400,000.
Lowell and Westfir, Ore. outsourced traffic patrols and criminal complaints to nearby Oak Ridge, Ore. Oak Ridge then closed its 911 dispatch service and outsourced it to Lane County Sheriff Department. The savings spread along with the idea. Eugene, Ore now gives its legal work to Lane County Sheriff Dept.
There is on record over 700 cases of New York towns and villages off-loading public-sector tasks to larger government agencies.
Not Just Speeding Tickets
In California almost all rural areas use the California Highway Patrol to keep local law and order. In Florida many counties share 911 dispatch service and sheriff patrols. Bottom line: local government employment is following the lead by corporate America. Agencies are cutting costs which sadly means jobs too.
Liars and Crooks:This week goes to Commodity Futures Trading Commission who are about to drop their investigation into the manipulation of the price of silver on the exchange. Amazingly, Bart Chilton, the Commissioner stated,"he believed there had been "fraudulent efforts" to "deviously control" the silver price. Who benefits? JP Morgan and HSBC. Keep this in mind when the OWS stage their demonstration on 17 Sept. as they are carted off to jail.
Monday, July 30, 2012
Chance to Make $ on Black Gold...L&C
The media business will get its biggest boost from an election year ever, but a safer, surer bet to make some bread. is on oil. At the moment oil is range bound traded with upper resistance at $100 a barrel and the low end touching $78 per barrel. When trading, it is important to understand the trend of the market. It too is range bound. As this hits the blog-line, the market is touching its highs from April of this year. I'm calling it a top. I see a severe market correction beginning the 3rd of August. I know, I know. This is a Presidential Year Cycle. I heard it. I heard it. The US is growing, although slowly, nevertheless, growing with still positive earnings from its corporations. Ever hear of the
Bradley Model?
It is pointing DOWN! I do not have a PHD after my name and the only place you will read me is here, but I don't mix words. I put it down in plane language. The market will definitely touch 950 on the S&P which means everything will come down in price to which if you have anything left, buy some oil at that point.
Bakken Oil
is the place where I would place my bet. You have many small companies with low P/E ratio with big acreage and a product that is in demand. You could parlay this opportunity with the future alternative fuel for cars, Compressed Natural Gas(CNG). I could post a few names, but after the Synacor disaster, I'm a little gun shy. You can easily do a Google search to find names with these ideas.
Support
comes from many sources, including OPEC. Saudi Arabia, according to Dr.Ken Moors, an energy consultant, needs oil to be priced at $125 a barrel to make ends meet. You see, the Arabs count on the revenues to pay for all the services that they provide, least they begin to suffer from the Arab Spring contagion. So, when the Fed prints money and the value of the dollar goes south, the Arabs need more dinero for their petro.
The Russians also support higher prices, but for different reasons. It seems that corporations cannot deal with Russia, because Russians are paranoid. They make deals, but as soon as they begin to pay off, the Russians begin second guessing the original contract. They always feel that they are being cheated. Putin, step back! Look at the recent history of your nation. You guys fail at every deal you make. Do you know what the result of all this will be? No one will deal with you and you will be isolated again. Poor again! I could point out deals with Chevron, Exxon and the most recent blowup with BP. Wake Up! If you are making money, then you should be progressing as a nation. If you fail to honor contracts, it is all on you, period!
China and India both have over one billion people. They need everything. China just brought a Canadian company, Nexen. In the future countries will put a limit on takeovers by outside interest. It is already happening in South America with mining companies. Sovereign wealth funds add to this mix and together with limited resources, makes for higher prices. Bottom line: oil is not going anywhere until there is another practical energy source like CNG to take its place. In the meantime you can at least get a rebate from all the higher prices that you will be paying at the pump.
LIARS and CROOKS:The Fed, ECB, the UK Central Bank, central banks of the BRIC nations and elsewhere who only see growth by printing money and forcing it into the system, irregardless of the consequences. We will all suffer from their limited, anti-gold, fiat thinking ways. End the Fed!
Bradley Model?
It is pointing DOWN! I do not have a PHD after my name and the only place you will read me is here, but I don't mix words. I put it down in plane language. The market will definitely touch 950 on the S&P which means everything will come down in price to which if you have anything left, buy some oil at that point.
Bakken Oil
is the place where I would place my bet. You have many small companies with low P/E ratio with big acreage and a product that is in demand. You could parlay this opportunity with the future alternative fuel for cars, Compressed Natural Gas(CNG). I could post a few names, but after the Synacor disaster, I'm a little gun shy. You can easily do a Google search to find names with these ideas.
Support
comes from many sources, including OPEC. Saudi Arabia, according to Dr.Ken Moors, an energy consultant, needs oil to be priced at $125 a barrel to make ends meet. You see, the Arabs count on the revenues to pay for all the services that they provide, least they begin to suffer from the Arab Spring contagion. So, when the Fed prints money and the value of the dollar goes south, the Arabs need more dinero for their petro.
The Russians also support higher prices, but for different reasons. It seems that corporations cannot deal with Russia, because Russians are paranoid. They make deals, but as soon as they begin to pay off, the Russians begin second guessing the original contract. They always feel that they are being cheated. Putin, step back! Look at the recent history of your nation. You guys fail at every deal you make. Do you know what the result of all this will be? No one will deal with you and you will be isolated again. Poor again! I could point out deals with Chevron, Exxon and the most recent blowup with BP. Wake Up! If you are making money, then you should be progressing as a nation. If you fail to honor contracts, it is all on you, period!
China and India both have over one billion people. They need everything. China just brought a Canadian company, Nexen. In the future countries will put a limit on takeovers by outside interest. It is already happening in South America with mining companies. Sovereign wealth funds add to this mix and together with limited resources, makes for higher prices. Bottom line: oil is not going anywhere until there is another practical energy source like CNG to take its place. In the meantime you can at least get a rebate from all the higher prices that you will be paying at the pump.
LIARS and CROOKS:The Fed, ECB, the UK Central Bank, central banks of the BRIC nations and elsewhere who only see growth by printing money and forcing it into the system, irregardless of the consequences. We will all suffer from their limited, anti-gold, fiat thinking ways. End the Fed!
Sunday, July 22, 2012
Fiat Versus Gold...L&C
The status quo for fiat banking have all the elements on their side. They control through central banks that paper is currency and gold is a barbaric relic. They have joined with national media's in depicting gold bugs has fanatics of doom. They control all laws governing currency and through this aspect have outlawed gold as a vehicle of exchange and no bank will pay interest on it like paper money. When Ron Paul recently asked Ben Bernanke if gold was money, he said no. I could go on-and-on, but I think that picture has been painted. So, why gold?
Well, if I had a blog back in 2000, I would have recommended gold under $300 per ounce and you would be very happy today. However, I am going a different way this week as I will quote various people and you get a second opinion in a round-about way.
In leading up to the parade of observations, some basic facts need to recognised. The leading central banks of the world have increased their money supply by $12 trillion to spur their economies. So far. they are failing as only China with a questionable 7.6% growth rate is growing. The US is less than 2%, Europe is in recession and the emerging markets are stuck in neutral. I say China is questionable because the central Communist Party dictates that certain quotas must be met and regional managers are known to fluff the books to obtain those results along with other previous facts about the Chinese economy that I have written about in the past.
Anniversary
On the 15th of August 2012 will be the 41st anniversary of fiat banking control of money supply. At present the UK central bank has created the most money out of thin air at an 382% since the year 2000. We are not the worst, yet. The Swiss National Bank expanded money at an 212% clip and all central banks together at a 15% growth rate. According to Ludwig von Mises of the Austrian School of economics, this is inflation.
Prediction
I predict that sometime during the 42cd year a financial crisis will occur as Herbert Stein once said,"If something can't go on forever, it will stop." I base my prediction on this comment from Ayn Rand,"You can avoid reality, but you cannot avoid the consequences of avoiding reality."
Do you save? Have a CD? It is tough when banks and treasuries only pay negative interest rates. Negative rates are those that won't pay enough interest to cover inflation and or the value of the attached currency. With that in mind I defer to my pisan brother of old, Leonardo DaVinci, "Simplicity is the ultimate sophistication." Gold is simple. It is backed by nothing, but everything else seeks to be backed by gold. Compare gold with the modern paper device the derivative. These financial credits are so complex that they cannot even be explained or understood.
Weapons of Mass Financial Destruction
as Warren Buffett once said about derivatives. This paper device is also a form of credit and according to the Austrian School of Economic which I favor, credit is the source of inflation. It is not the higher price of food, fuel or other needs that spur inflation. They are only the visible results, but credit is the cause. Money printing is credit as Samuel Johnson says,"The future is purchased by the present." How about going to the mouth of the horse? In this tidbit from Dennis Lockhart, Federal Reserve of Bank of Atlanta,"In theory, there is no limit to central bank expanding its balance sheet."
Well, Dennis, consider this, if interest rates return to normal historical rates of just 5%, it will result in over a 12% cost to our federal budget. You don't want the math at higher rates. Like my birthday buddy, Ben Franklin said,"He who goes borrowing, goes sorrowing." Our founders would agree with Mises(Austrian School) because they chose gold to be our currency based on history of monetary stability. Even aristocrats agree like Otto von Habsburg who adds,"History is a teacher nobody listens to." Even further back in time, Aristotle favored good money which he defined as having a high cost of production whereby all knew and respected its value. How about today? Alan Greenspan. Yes, the former chief of the Fed who in March 2011 said,"Gold, unlike all other commodities, is a currency(did you hear that Bernanke?)...an escape from what is perceived to be a fiat money system, paper money that seems to be deteriorating." Not a fan of Mises? How about John Stuart Mill who says the same thing in a different way. "Prices do not destroy capital, they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works." Common sense tells you that at some point something has to give or change. Two modern researchers, Reinhart and Rogoff call this concept the
"Bang Point."
It is based on the fact that government revenues do not meet expenses causing a collapse in confidence of credit. I believe Aldous Huxley said the same thing with his,"Facts do not cease to exist because they are ignored." Taxes can't help this problem because the numbers are in disproportion to reality like Austin O'Malley once said,"In levying taxes and in shearing sheep, it is well to stop when you get down to skin."
Bottom Line:
The bankers in charge only know one thing and that is expansion of money to generate economic growth. Albert Einstein would say, "problems cannot be solved by the same rationale that created them." There you have it. Ultimately, it is your choice, but after the disaster in Colorado movie theater, I defer to my good buddy, JL who says,"Not every day is gold, but it's all good." You see the lost soul did not understand this is God's world and it is up to us to leave it better not worse.
LIARS and CROOKS: This week goes to NIA who have been pumping the stock that I also wrote about, Synacur(SYNC). I think that it is possible that a new scam has developed whereby one group buys a stock on margin and this allows another group to sell it or short the same stock as they feed each other. The original stock purchase is covered because of the low entry buy point and thus, every and anyone who buys after that price is at risk to be ripped off like me and countless others. Too bad because the company is solid. The 1919 Sox scandel lives anew. It wasn't baseball, just the players.
Well, if I had a blog back in 2000, I would have recommended gold under $300 per ounce and you would be very happy today. However, I am going a different way this week as I will quote various people and you get a second opinion in a round-about way.
In leading up to the parade of observations, some basic facts need to recognised. The leading central banks of the world have increased their money supply by $12 trillion to spur their economies. So far. they are failing as only China with a questionable 7.6% growth rate is growing. The US is less than 2%, Europe is in recession and the emerging markets are stuck in neutral. I say China is questionable because the central Communist Party dictates that certain quotas must be met and regional managers are known to fluff the books to obtain those results along with other previous facts about the Chinese economy that I have written about in the past.
Anniversary
On the 15th of August 2012 will be the 41st anniversary of fiat banking control of money supply. At present the UK central bank has created the most money out of thin air at an 382% since the year 2000. We are not the worst, yet. The Swiss National Bank expanded money at an 212% clip and all central banks together at a 15% growth rate. According to Ludwig von Mises of the Austrian School of economics, this is inflation.
Prediction
I predict that sometime during the 42cd year a financial crisis will occur as Herbert Stein once said,"If something can't go on forever, it will stop." I base my prediction on this comment from Ayn Rand,"You can avoid reality, but you cannot avoid the consequences of avoiding reality."
Do you save? Have a CD? It is tough when banks and treasuries only pay negative interest rates. Negative rates are those that won't pay enough interest to cover inflation and or the value of the attached currency. With that in mind I defer to my pisan brother of old, Leonardo DaVinci, "Simplicity is the ultimate sophistication." Gold is simple. It is backed by nothing, but everything else seeks to be backed by gold. Compare gold with the modern paper device the derivative. These financial credits are so complex that they cannot even be explained or understood.
Weapons of Mass Financial Destruction
as Warren Buffett once said about derivatives. This paper device is also a form of credit and according to the Austrian School of Economic which I favor, credit is the source of inflation. It is not the higher price of food, fuel or other needs that spur inflation. They are only the visible results, but credit is the cause. Money printing is credit as Samuel Johnson says,"The future is purchased by the present." How about going to the mouth of the horse? In this tidbit from Dennis Lockhart, Federal Reserve of Bank of Atlanta,"In theory, there is no limit to central bank expanding its balance sheet."
Well, Dennis, consider this, if interest rates return to normal historical rates of just 5%, it will result in over a 12% cost to our federal budget. You don't want the math at higher rates. Like my birthday buddy, Ben Franklin said,"He who goes borrowing, goes sorrowing." Our founders would agree with Mises(Austrian School) because they chose gold to be our currency based on history of monetary stability. Even aristocrats agree like Otto von Habsburg who adds,"History is a teacher nobody listens to." Even further back in time, Aristotle favored good money which he defined as having a high cost of production whereby all knew and respected its value. How about today? Alan Greenspan. Yes, the former chief of the Fed who in March 2011 said,"Gold, unlike all other commodities, is a currency(did you hear that Bernanke?)...an escape from what is perceived to be a fiat money system, paper money that seems to be deteriorating." Not a fan of Mises? How about John Stuart Mill who says the same thing in a different way. "Prices do not destroy capital, they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works." Common sense tells you that at some point something has to give or change. Two modern researchers, Reinhart and Rogoff call this concept the
"Bang Point."
It is based on the fact that government revenues do not meet expenses causing a collapse in confidence of credit. I believe Aldous Huxley said the same thing with his,"Facts do not cease to exist because they are ignored." Taxes can't help this problem because the numbers are in disproportion to reality like Austin O'Malley once said,"In levying taxes and in shearing sheep, it is well to stop when you get down to skin."
Bottom Line:
The bankers in charge only know one thing and that is expansion of money to generate economic growth. Albert Einstein would say, "problems cannot be solved by the same rationale that created them." There you have it. Ultimately, it is your choice, but after the disaster in Colorado movie theater, I defer to my good buddy, JL who says,"Not every day is gold, but it's all good." You see the lost soul did not understand this is God's world and it is up to us to leave it better not worse.
LIARS and CROOKS: This week goes to NIA who have been pumping the stock that I also wrote about, Synacur(SYNC). I think that it is possible that a new scam has developed whereby one group buys a stock on margin and this allows another group to sell it or short the same stock as they feed each other. The original stock purchase is covered because of the low entry buy point and thus, every and anyone who buys after that price is at risk to be ripped off like me and countless others. Too bad because the company is solid. The 1919 Sox scandel lives anew. It wasn't baseball, just the players.
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