You don't hear that expression much anymore. It means to be taken for a "ride." It goes back to the 1800s, when men were kidnapped to ships sailing to China by compulsory force. That image associated with the word today means a different ride. It is a rocket, straight up from the lows of 2009 on the Shanghai stock market. The index has risen over 122% or from 2025. It set a peak record on 12 June 2015 of 5178. It is up over 3,000 points in just one year. The Chinese are creating millionaires. However, dear reader the root of the word is the word. Like the song by CCR, I see a Bad Moon Rising.
Signs of Trouble
New accounts are off the charts. During the period of late 2008 to the present, there were 4,435,255 new brokerage accounts according to a report by NIA. This works out to a monthly average of 196,671 per week! It sounds and looks like 1929 all over again as the Chinese go All-In. Debt margin has increased on average by 15.24% and it is 4.22% of market cap!
Shanghai has percentage rules in stock trading. After a 10% move, a stock is halted for the day, however, it is different for IPOs. IPOs are allowed up to 44% per day and up to 110% for the week. From January to February in 2015, 18 companies went public. Every one went up the 44% limit and 17 of the 18 made the 110% gain for the week. Who wouldn't want to go all-in?
Roller Coaster
during the ride up, there have been moments of pressure. Last month the index dropped over 6% in one day, however, it steadied and hit the new peak earlier this month until this week. In just eight days the market has dropped 20% which is BEAR TERRITORY. It closed at its lows on Monday at 4053. The Chinese feel that the market will always come back like it did after falling from its all-time peak of over 6,000 in 2007. They don't understand that the market can be irrational for 20 or 30 years and much longer than you can be solvent.
Now, like I declare in my unpublished book, everything is related. Let us look at the other expression, "Greek Tragedy." A deal will be made by the EU with the Greek government because the Greeks are owned by the EU. They sold their sovereignty when they joined. The leaders know, but the people don't. Eventually, they will and this play will live up to the root of Greek plays, a tragedy.
I wrote that on Saturday and I was wrong. Greece defaulted, but the EU got control of the media to make like this was nothing more than a technicality. That, dear reader is pure BS!
It is so bad that the euro rose while the dollar declined which is the biggest lie of all! As I see it, the Greek Prime Minister is made out to be a buffoon, but I feel that he understands that fiat money is just a game. The people in power do not like to be shown up and being small in skin, they will seek to remove the Greek leader. They will get their chance as he has laid out the situation to his country which will vote on acceptance or refusal this Sunday. Already, the media is using fear to scare the vote for acceptance and to stay in the EU. They probably will succeed, but maybe, just maybe, a denial will again save democracy with this tragedy, and once again, Greece will be the cradle of democracy.
In the meantime to gather sympathy and appear like the "good guys," the EU will use one of their phony programs like the Economic Stability Fund to "help" the Greek people get by in this critical time. All they do is print on some paper, click-on their site and presto!: Money for economic stability in a time of crisis.
Nevertheless, no matter what the outcome of the outcome, all governments will stand on the side of the central bankers, so they look like the correct side and the Greek leader the fool. This will spark a world rally in markets, although only temporarily. This rally will stop the bleeding in Shanghai and the belief in this market will only make the final outcome more severe. By mid-July the joy will be over and the smart money long gone as a new low will be reached and I will do a follow up at that time to see how low it can go. At the moment, 3108 is in play. Elsewhere, the US will not be shielded from the fallout. We have a serious economic problem in Puerto Rico, and Illinois will soon make headlines under bankruptcy At present, we are also in a bubble in terms of margin debt. It surpassed the record of 2007 and it is over $507 billion. Margin calls in all markets can start a cascading fall that becomes self generating to the downside. Support for the Dow in the US is 16,500, however the transports never reached a new high which means the US is a conflicted market with over-priced stocks at over-priced evaluations.
Can you say, LIMBO?
Tuesday, June 30, 2015
Tuesday, June 23, 2015
Dead Reckoning Day
One aspect that is overlooked with the Federal Reserve's fiat money system is the fact that our whole economy is based on faith. Faith is what backs our system. We place faith that our currency will deliver goods from purchase. No one rejects the IOU. Please, don't bring up the isolated circumstances of a mortgage lender refusing payment in cash or a rental office demanding a money order or check because they are also variations of faith based on credit. Everyone takes credit.
Credit is an Asset
You see, dear reader, according to the Fed and the government, credit is money. Everything we do is a result of this format. You get a loan(credit)to build a house. Your mortgage is your credit. The builder gets his supplies on credit. His workers construct your house for the first two weeks based on credit of the boss, as everyone in line awaits the release of payment which is numbers in an account that go plus and minus accordingly. No one transfers huge amounts of actual cash. All our bills are plus and minus signs on a ledger. We pay the utility bill by check and the energy company gets a plus while you get a minus in your account. This is the root of the problem. I'll explain.
Experian
the information and market company reported that used car loans(credit)have reached an all-time high of 62 months. Our fellow citizens are buying used vehicles and they will pay another five years to own a second hand car! Why, you ask?
Because we don't earn and save enough to be able to purchase a used car with cash. People, that last word is the focal point of this piece.
Because the convenience of credit allows us to go about our daily needs without carrying a truckload of cash and becoming a potential robbery victim. The problem with real cash as related to credit magnifies itself when someone's check bounces. Not that an individual scam can bring an economy to a halt. However, dear reader, states, cities and government use credit just like we do, but the numbers in the plus and minus accounts are much, much bigger. Therein lies the problem.
It is why Greece is in the headlines. In the US 36 states will soon vie for that space. Pension and medical promises to local, state and federal government are underfunded. They are now do.
GASB
The Government Accounting Standards Board wants states to come clean and update their ledger. Our federal government keeps things off the books and so do local "leaders."
This will only make the problem known because the last resort is you and me to cover these obligations. Rough estimates indicate that $500 billion is needed for pensions and another $500 billion to cover medical promises. Who will pay? (see above)
Now, back to our cash in circulation. Estimates say we have $250 billion. I say that is probably wrong and the figure is much, much higher. Nevertheless, the amount will be no where near the amount of debt and credit that moves our $14 trillion economy with another $23 trillion based on credit.
Dear reader, when states and cities like Detroit fail, that bounced check causes a chain reaction just like the threat of Greece defaulting. Bills must be paid, Cheney!...and there isn't enough cash to go around. When that day arrives and it is not far off because credit keeps expanding, a day of dead reckoning is just behind the promise of a unfunded pension with medical coverage. When that day comes, if you don't have cash, precious metals or something of value to trade, you will go hungry and find yourself homeless. It will get worse because civil unrest will follow and so much fear that none of the charity, food banks or similar goodwill functions will be open to operate. The government will institute capital controls to limit banks and ATMs just like in Cypress and now, Greece. Thanks to the Federal Reserve things will get ugly for awhile which is another reason why I say End the Fed!
Credit is an Asset
You see, dear reader, according to the Fed and the government, credit is money. Everything we do is a result of this format. You get a loan(credit)to build a house. Your mortgage is your credit. The builder gets his supplies on credit. His workers construct your house for the first two weeks based on credit of the boss, as everyone in line awaits the release of payment which is numbers in an account that go plus and minus accordingly. No one transfers huge amounts of actual cash. All our bills are plus and minus signs on a ledger. We pay the utility bill by check and the energy company gets a plus while you get a minus in your account. This is the root of the problem. I'll explain.
Experian
the information and market company reported that used car loans(credit)have reached an all-time high of 62 months. Our fellow citizens are buying used vehicles and they will pay another five years to own a second hand car! Why, you ask?
Because we don't earn and save enough to be able to purchase a used car with cash. People, that last word is the focal point of this piece.
Because the convenience of credit allows us to go about our daily needs without carrying a truckload of cash and becoming a potential robbery victim. The problem with real cash as related to credit magnifies itself when someone's check bounces. Not that an individual scam can bring an economy to a halt. However, dear reader, states, cities and government use credit just like we do, but the numbers in the plus and minus accounts are much, much bigger. Therein lies the problem.
It is why Greece is in the headlines. In the US 36 states will soon vie for that space. Pension and medical promises to local, state and federal government are underfunded. They are now do.
GASB
The Government Accounting Standards Board wants states to come clean and update their ledger. Our federal government keeps things off the books and so do local "leaders."
This will only make the problem known because the last resort is you and me to cover these obligations. Rough estimates indicate that $500 billion is needed for pensions and another $500 billion to cover medical promises. Who will pay? (see above)
Now, back to our cash in circulation. Estimates say we have $250 billion. I say that is probably wrong and the figure is much, much higher. Nevertheless, the amount will be no where near the amount of debt and credit that moves our $14 trillion economy with another $23 trillion based on credit.
Dear reader, when states and cities like Detroit fail, that bounced check causes a chain reaction just like the threat of Greece defaulting. Bills must be paid, Cheney!...and there isn't enough cash to go around. When that day arrives and it is not far off because credit keeps expanding, a day of dead reckoning is just behind the promise of a unfunded pension with medical coverage. When that day comes, if you don't have cash, precious metals or something of value to trade, you will go hungry and find yourself homeless. It will get worse because civil unrest will follow and so much fear that none of the charity, food banks or similar goodwill functions will be open to operate. The government will institute capital controls to limit banks and ATMs just like in Cypress and now, Greece. Thanks to the Federal Reserve things will get ugly for awhile which is another reason why I say End the Fed!
Tuesday, June 16, 2015
Results From Our Experts
Back in 2007 senator Obama pledged in his presidential campaign to end the Middle East wars. After he got elected he actually increased the number of troops and violated another campaign promise. He increased our national debt by giving the military a pay hike. To put this in perspective consider this? Citizens drafted during the Vietnam Era got paid $93 per month and today, they make more than that in a day!
Anyway, eventually he pulled out the troops from Iraq. He stated, "Iraq could self determine..." We trained their military, supplied weapons and money and installed democratic elections. The election went to the Shite's. The newly minted cabinet shut out the competition, the Sunni's.
Back before President Bush invaded Iraq in 2003, other nations warned us to keep out because the nation is fiercely divided. One strong, bad dictator was better for the region than some unknown entity.
Our Experts
new better. Our "military leaders" new better. Today, only our citizens know better. It is a stupid, wasteful war that only makes the world more dangerous and destroys our natural treasures. It will serve no useful purpose.
The first fiasco came to light when President Bush stood on a ship and behind him was a banner proclaiming "Mission Accomplished." There was no plan to establish a new government after the dictator was disposed.
The latest oracle revealed itself with the rising of a fraction known as ISIS. They defeated the Iraqi army and took over Iraq's second largest city, Mosul.
Our "military leadership" didn't foresee this, but after it happened, they had the answer: more training, supplies and money. No one challenged them that this is the same plan instituted ten years prior.
Nevertheless, I draw your attention to the supplies equation. When ISIS defeated the Iraqi army, they took possession of the city which included oil distribution, money and the weapons that we supplied the Iraqi's. They could be using our taxpayer weapons to kill our troops!
Flash Forward
in late 2014, ISIS had another victory by taking Ramadi. In this latest fiasco, we at least know what they took command over. The following taxpayer revenues that will increase our national debt well into the future went into this rogue group. We lost:
2,300 Humvee's worth $16m.
40 Abron tanks worth $172m.
52 Howitzer's worth $2.7m
74,000 machine guns worth $29m.
and who knows what else?
ISIS continues to sell oil in the open market and for all practical purposes are operating as a country within a nation. Our "experts" and "military leaders" offer the same plan as they did back in 2002 when the fool first invaded. Excuse Meeeeee! They are offering the 1964 plan that we used in Vietnam. Send supplies, send some advisers and put up some bases to track the progress. Then what, you ask? Troops on the ground! 50,000 drafted EVERY MONTH!
Oh, by the way those same experts allowed the State Department, White House, the Office of Personal Management and even the US Army website to be HACKED! This will cause undo hardship for many US citizens not to mention what harm that we will pay for future fraud by criminals. The military wastes $-one trillion every two years and our border is unsafe, our national treasures squandered and now, our invention, the internet will cause us all grief!
My response is to call your attention to the words of wisdom from an unlikely source, the QB of the Denver Broncos who reminds us, "The Arc was built by an amateur while the Titanic was built by experts."
Anyway, eventually he pulled out the troops from Iraq. He stated, "Iraq could self determine..." We trained their military, supplied weapons and money and installed democratic elections. The election went to the Shite's. The newly minted cabinet shut out the competition, the Sunni's.
Back before President Bush invaded Iraq in 2003, other nations warned us to keep out because the nation is fiercely divided. One strong, bad dictator was better for the region than some unknown entity.
Our Experts
new better. Our "military leaders" new better. Today, only our citizens know better. It is a stupid, wasteful war that only makes the world more dangerous and destroys our natural treasures. It will serve no useful purpose.
The first fiasco came to light when President Bush stood on a ship and behind him was a banner proclaiming "Mission Accomplished." There was no plan to establish a new government after the dictator was disposed.
The latest oracle revealed itself with the rising of a fraction known as ISIS. They defeated the Iraqi army and took over Iraq's second largest city, Mosul.
Our "military leadership" didn't foresee this, but after it happened, they had the answer: more training, supplies and money. No one challenged them that this is the same plan instituted ten years prior.
Nevertheless, I draw your attention to the supplies equation. When ISIS defeated the Iraqi army, they took possession of the city which included oil distribution, money and the weapons that we supplied the Iraqi's. They could be using our taxpayer weapons to kill our troops!
Flash Forward
in late 2014, ISIS had another victory by taking Ramadi. In this latest fiasco, we at least know what they took command over. The following taxpayer revenues that will increase our national debt well into the future went into this rogue group. We lost:
2,300 Humvee's worth $16m.
40 Abron tanks worth $172m.
52 Howitzer's worth $2.7m
74,000 machine guns worth $29m.
and who knows what else?
ISIS continues to sell oil in the open market and for all practical purposes are operating as a country within a nation. Our "experts" and "military leaders" offer the same plan as they did back in 2002 when the fool first invaded. Excuse Meeeeee! They are offering the 1964 plan that we used in Vietnam. Send supplies, send some advisers and put up some bases to track the progress. Then what, you ask? Troops on the ground! 50,000 drafted EVERY MONTH!
Oh, by the way those same experts allowed the State Department, White House, the Office of Personal Management and even the US Army website to be HACKED! This will cause undo hardship for many US citizens not to mention what harm that we will pay for future fraud by criminals. The military wastes $-one trillion every two years and our border is unsafe, our national treasures squandered and now, our invention, the internet will cause us all grief!
My response is to call your attention to the words of wisdom from an unlikely source, the QB of the Denver Broncos who reminds us, "The Arc was built by an amateur while the Titanic was built by experts."
Tuesday, June 9, 2015
Did You Realize This?
As June is the season for weddings and graduation, I came across these words of advice from an unlikely source. It does not render itself to nuptials, but speaks loudly to the class of 2015 and the rest of us.
Peyton Manning, the QB of Denver reminded us all that an amateur built the Arc and "experts" built the Titanic.
In our so-called modern society we have segregated jobs with education. We classify it as specialization. Then, through time, a certain degree of recognition is gained from experience in the different fields. Of course, doors open faster if you know someone and thus the saying, it is not what you know, but who. Then again, any time one uses the word segregated, it implies another level of difficulty and some doors never open. Dear reader, it is not just minorities that have doors shut on them, but a whole level of society. People, who continue to grow and develop products or ideas have the same doors shut to them. This is a serious problem in America. We are losing our social mobility. This is the problem why my book goes unpublished. Furthermore, almost all the new technology advancements came from venture capitalist, not companies. Shark Tank is a reality. Innovators give up so much just to get a chance. This is very sad for America.
Yes, I'll have some cheese with my whine.
Putting that aside another tidbit has come to focus and the focal point of this piece. Did you know that margin debt pertaining to stocks is included as growth in our economy when the GDP is reported? You see, according to the "experts" margin is credit and credit is considered growth. This obscured manipulation of GDP gets more unreal and dangerous when I add this important aspect to it.
You see, dear reader, that margin debt is off the charts.
Record Level
Yes, it broke the old record of 2007 which broke the previous record back in 2000. Funny thing about those two previous record, the market crashed on both occasions.
This time will be different. Great BS by the pundits and this time, they're right. No, not what they imply, but the fallout will be more devastating than 2008. Margin debt in correlation to our GDP is at 97% in the US which is almost 1-to-1. This is why markets crash. No one challenges the experts that this margin could go south, leaving the investor with debt and losses not to mention what that aspect will do to this manipulated use of credit to be classified as economic growth. With all the people running for office in 2016 not one dares to debate this scary situation. People only spin positives with half truths like this is not another dot.com bubble, now we have earnings. What they don't say is that the buybacks are used to cover shortfalls in revenues, put the company in debt because they use borrowed money from the cheap rates by the Fed. Many, many other examples like Apple taking a loan to provide a dividend.
In addition to this margin debt there is business loans and consumer credit. When you add all three to the picture, you would think that Steven King wrote the script in this economic horror.
Margin debt is 2.89% of our GDP.
Business loans are 10.57% of our GDP.
Consumer credit is 19.04% of our GDP.
32.50%
of our economy is nothing but debt and credit loans. Is it no wonder that America does not create wealth for all its citizens? Is it no wonder that we have a class/wealth gap? And all this hoopla over the market, blinds one to this next very important point.
Market Cap
In relationship to GDP is at its highest peak since 1991 according to a report by NIA(National Inflation Ass.). They looked at the top 24 countries and the average ratio is 90%. Stocks are considered overvalued at 75%. Presently, the US is at 97% and many countries like Japan are at 100%. In fact, over half are at 95%. The last time this occurred was in 2007. Enough said!
If you think or believe the above is bad, I will remind you, dear reader that government
manipulation to GDP is off the charts when you consider the next recent changes.
Lights, Camera, Action...
if you are a movie or television producer and whatever work you perform in your environment is now considered economic growth. All the costs are included as gains in the economy. It doesn't matter whether the movie fails, the show is dropped by a network or even the fact that it was so bad that it didn't even get completed. Yeah, this helps America and promotes the general welfare of... lobbyists and the connected. How about a new computer with all the bells and whistles? This gets a double category. It lowers the CPI because it makes you more productive and this productivity increase is a plus to GDP. All our agencies have been poisoned by appointments as favors, the government only spins positive lies and even with all its manipulation, the economy contracted in the first quarter.
Peyton Manning, the QB of Denver reminded us all that an amateur built the Arc and "experts" built the Titanic.
In our so-called modern society we have segregated jobs with education. We classify it as specialization. Then, through time, a certain degree of recognition is gained from experience in the different fields. Of course, doors open faster if you know someone and thus the saying, it is not what you know, but who. Then again, any time one uses the word segregated, it implies another level of difficulty and some doors never open. Dear reader, it is not just minorities that have doors shut on them, but a whole level of society. People, who continue to grow and develop products or ideas have the same doors shut to them. This is a serious problem in America. We are losing our social mobility. This is the problem why my book goes unpublished. Furthermore, almost all the new technology advancements came from venture capitalist, not companies. Shark Tank is a reality. Innovators give up so much just to get a chance. This is very sad for America.
Yes, I'll have some cheese with my whine.
Putting that aside another tidbit has come to focus and the focal point of this piece. Did you know that margin debt pertaining to stocks is included as growth in our economy when the GDP is reported? You see, according to the "experts" margin is credit and credit is considered growth. This obscured manipulation of GDP gets more unreal and dangerous when I add this important aspect to it.
You see, dear reader, that margin debt is off the charts.
Record Level
Yes, it broke the old record of 2007 which broke the previous record back in 2000. Funny thing about those two previous record, the market crashed on both occasions.
This time will be different. Great BS by the pundits and this time, they're right. No, not what they imply, but the fallout will be more devastating than 2008. Margin debt in correlation to our GDP is at 97% in the US which is almost 1-to-1. This is why markets crash. No one challenges the experts that this margin could go south, leaving the investor with debt and losses not to mention what that aspect will do to this manipulated use of credit to be classified as economic growth. With all the people running for office in 2016 not one dares to debate this scary situation. People only spin positives with half truths like this is not another dot.com bubble, now we have earnings. What they don't say is that the buybacks are used to cover shortfalls in revenues, put the company in debt because they use borrowed money from the cheap rates by the Fed. Many, many other examples like Apple taking a loan to provide a dividend.
In addition to this margin debt there is business loans and consumer credit. When you add all three to the picture, you would think that Steven King wrote the script in this economic horror.
Margin debt is 2.89% of our GDP.
Business loans are 10.57% of our GDP.
Consumer credit is 19.04% of our GDP.
32.50%
of our economy is nothing but debt and credit loans. Is it no wonder that America does not create wealth for all its citizens? Is it no wonder that we have a class/wealth gap? And all this hoopla over the market, blinds one to this next very important point.
Market Cap
In relationship to GDP is at its highest peak since 1991 according to a report by NIA(National Inflation Ass.). They looked at the top 24 countries and the average ratio is 90%. Stocks are considered overvalued at 75%. Presently, the US is at 97% and many countries like Japan are at 100%. In fact, over half are at 95%. The last time this occurred was in 2007. Enough said!
If you think or believe the above is bad, I will remind you, dear reader that government
manipulation to GDP is off the charts when you consider the next recent changes.
Lights, Camera, Action...
if you are a movie or television producer and whatever work you perform in your environment is now considered economic growth. All the costs are included as gains in the economy. It doesn't matter whether the movie fails, the show is dropped by a network or even the fact that it was so bad that it didn't even get completed. Yeah, this helps America and promotes the general welfare of... lobbyists and the connected. How about a new computer with all the bells and whistles? This gets a double category. It lowers the CPI because it makes you more productive and this productivity increase is a plus to GDP. All our agencies have been poisoned by appointments as favors, the government only spins positive lies and even with all its manipulation, the economy contracted in the first quarter.
Tuesday, June 2, 2015
PREDICTION: A Big Move Is Coming In Silver
Yesterday leads to today and together forms tomorrow - Sebastian
In his book, Fisher has traced the history of fiat currencies with one common denominator: they all failed. The average lifespan is 40 - 50 years. The US has held as the world's reserve currency under a fiat system for 44 years. The clock is ticking...
Today
China wants to be the Alfa dog, but opposition is still strong against their desires. However, there is a growing opposition against the greenback due to the policies of the Federal Reserve and our foreign policy of military intervention. In our present environment there are few choices. The IMF has a plan with a new currency called SDR. This is a weighted basket of currencies. China wants to be included and people say that on 20th of October of this year, there will be a major announcement on the subject. Also, we have history's choice: gold and precious metals. Since the central bankers control the game they have outlawed precious metals as money. They call people who follow the Founding Fathers choice as bugs with the euphemism "gold bugs."
One of the complaints by government about gold is a valid point. There isn't enough to back a currency. However, these are the people who make the rules. They overlook the aspect that if platinum were added to form a three tier approach, precious metals could back a currency. In any case gold has found a place in jewelry. Platinum is needed for converters and is also in jewelry. Then, the poor man's choice: silver. It is needed in so many industrial products that it could fill a page. It lost its hold in photography, but solar looms even larger. Solar producers expect to need 150 million ounces in the next two years. Silver is in demand in electronics and water sanitation which will also increase demand. We know one principal that evades even market manipulation: supply and demand. When supply is limited and demand grows, the price rises.
Now
the present climate has all three metals in the dog pound. The miners are hurt by rules and regulations, environmental concerns and financing. In addition, they have labor problems, insurance worries and equipment costs. Low prices has caused them to cut back in production and curtailed future exploration and investment. With this outlook you would expect prices to rise under the simple guidelines of supply and demand. Did I mention a study that claims since silver is a low crust metal, the supply is dwindling due to peak discoveries? Put all of the above in my favorite stock, Silver Wheaton and I will be able to retire with heat in winter and air in summer. However, the focal point of this piece could be the catalyst or the antagonist for silver. Time will tell.
Question
Why would JP Morgan, long whispered to be the shill for the Federal Reserve and fiat money, suddenly have an about face? They have started to stockpile silver. They are no longer just trading, and usually a short on silver, to accumulating. Is this another miracle like Paul on the road to Damascus? Morgan Chase is taking delivery of contracts. In April 2015 they purchased 8,300 ounces of silver. This big dog has caused smaller hedge funds to follow their lead. They now total 55,692,000 ounces of silver. Something is going to happen and this is the difficult part of my prediction. What do they see or know? Were they uncovered in a fraud investigation and they have to replace a truckload of silver? Do they recognize the lack of production while solar needs are increasing? Is Greece going to cause a run to safety? As you can see there are more questions than answers. Of course, with their history the danger of the dumping their load to crush the silver price and market also looms.
I offer this advice. Watch the daily action and weekly trend. If silver breaks down and falls below $15, drop it like a bad habit. However, if it rises in a staircase move with the first step being $18.50, get on board the gravy train. After that, the next step would be over $23.10. And if it continues and passes $25.12, put it all on the nose and I'm not talking American Pharaoh. When and if that day comes, I'll give an update on my triple crown of precious metals.
In his book, Fisher has traced the history of fiat currencies with one common denominator: they all failed. The average lifespan is 40 - 50 years. The US has held as the world's reserve currency under a fiat system for 44 years. The clock is ticking...
Today
China wants to be the Alfa dog, but opposition is still strong against their desires. However, there is a growing opposition against the greenback due to the policies of the Federal Reserve and our foreign policy of military intervention. In our present environment there are few choices. The IMF has a plan with a new currency called SDR. This is a weighted basket of currencies. China wants to be included and people say that on 20th of October of this year, there will be a major announcement on the subject. Also, we have history's choice: gold and precious metals. Since the central bankers control the game they have outlawed precious metals as money. They call people who follow the Founding Fathers choice as bugs with the euphemism "gold bugs."
One of the complaints by government about gold is a valid point. There isn't enough to back a currency. However, these are the people who make the rules. They overlook the aspect that if platinum were added to form a three tier approach, precious metals could back a currency. In any case gold has found a place in jewelry. Platinum is needed for converters and is also in jewelry. Then, the poor man's choice: silver. It is needed in so many industrial products that it could fill a page. It lost its hold in photography, but solar looms even larger. Solar producers expect to need 150 million ounces in the next two years. Silver is in demand in electronics and water sanitation which will also increase demand. We know one principal that evades even market manipulation: supply and demand. When supply is limited and demand grows, the price rises.
Now
the present climate has all three metals in the dog pound. The miners are hurt by rules and regulations, environmental concerns and financing. In addition, they have labor problems, insurance worries and equipment costs. Low prices has caused them to cut back in production and curtailed future exploration and investment. With this outlook you would expect prices to rise under the simple guidelines of supply and demand. Did I mention a study that claims since silver is a low crust metal, the supply is dwindling due to peak discoveries? Put all of the above in my favorite stock, Silver Wheaton and I will be able to retire with heat in winter and air in summer. However, the focal point of this piece could be the catalyst or the antagonist for silver. Time will tell.
Question
Why would JP Morgan, long whispered to be the shill for the Federal Reserve and fiat money, suddenly have an about face? They have started to stockpile silver. They are no longer just trading, and usually a short on silver, to accumulating. Is this another miracle like Paul on the road to Damascus? Morgan Chase is taking delivery of contracts. In April 2015 they purchased 8,300 ounces of silver. This big dog has caused smaller hedge funds to follow their lead. They now total 55,692,000 ounces of silver. Something is going to happen and this is the difficult part of my prediction. What do they see or know? Were they uncovered in a fraud investigation and they have to replace a truckload of silver? Do they recognize the lack of production while solar needs are increasing? Is Greece going to cause a run to safety? As you can see there are more questions than answers. Of course, with their history the danger of the dumping their load to crush the silver price and market also looms.
I offer this advice. Watch the daily action and weekly trend. If silver breaks down and falls below $15, drop it like a bad habit. However, if it rises in a staircase move with the first step being $18.50, get on board the gravy train. After that, the next step would be over $23.10. And if it continues and passes $25.12, put it all on the nose and I'm not talking American Pharaoh. When and if that day comes, I'll give an update on my triple crown of precious metals.
Tuesday, May 26, 2015
Caught: Libor Scandal, FX Scandal and Khara & Salim - Who Else?
From the rear to the front which is always the case: Little guys do the time while the big boys just pay the fine.
Khara and Salim were two gold traders from the United Arab Emirates. They were caught using a manipulative technique known as "layering."
In this scheme you place a buy or short order out of the money. This causes the equity to process a plus or minus in futures. Then, before execution, you cancel which again effects the equity futures. The unfilled order also effects the market. The trader then takes advantage of this move to capture a gain before the equity and market returns to equilibrium.
History Repeats
It is the same scheme that Sarao used to facilitate the "flash crash" in 2012.
Looking Deeper
One realizes that the Commodity Futures Trading Commission(CFTC)isn't serious about protecting pure price discovery. This weakness always reflects back to traders who say that the metals markets is rigged. The CFTC hasn't addressed the problem.
Casey Research
has done a wonderful study into the precious metals market. In their report going back to 1970(rear to front) to today, they found that prices usually rose in the Asian Market, however, they usually tend lower in the US market. Why?
That question is what they discovered and looking deeper, they point a finger. Keep in mind that whatever the price action, it effects your wallet. Let's do an example.
If you had invested $100 back in 1970 at the London AM gold fix and sold your position at the London PM gold fix on the same day, then reinvested the proceeds the next day and did this until today, you would have $12.
However, if you just bought bullion in 1970, held it, now it is worth $2,000.
Conclusion:
The US market consistently drove the price lower. The CFTC has never questioned this price action which is clearly anti-gold. Elke Koenig, a German financial regulator calls it, "collusion, and worse than Libor's scandal."
When you realize that this price action has been repeated for 45 years, it has to be someone with size and power like an investment bank, but it is a long ways from the rear to the front of the line.
In a token case the CFTC recently fined JP Morgan just $650K for years of data falsification on the CME. As for the Libor and FX culprits, they were fined a paltry average of $500K for years of rigging foreign exchange rates and currencies. -- Little guys do time while big boys just pay fines.
Khara and Salim were two gold traders from the United Arab Emirates. They were caught using a manipulative technique known as "layering."
In this scheme you place a buy or short order out of the money. This causes the equity to process a plus or minus in futures. Then, before execution, you cancel which again effects the equity futures. The unfilled order also effects the market. The trader then takes advantage of this move to capture a gain before the equity and market returns to equilibrium.
History Repeats
It is the same scheme that Sarao used to facilitate the "flash crash" in 2012.
Looking Deeper
One realizes that the Commodity Futures Trading Commission(CFTC)isn't serious about protecting pure price discovery. This weakness always reflects back to traders who say that the metals markets is rigged. The CFTC hasn't addressed the problem.
Casey Research
has done a wonderful study into the precious metals market. In their report going back to 1970(rear to front) to today, they found that prices usually rose in the Asian Market, however, they usually tend lower in the US market. Why?
That question is what they discovered and looking deeper, they point a finger. Keep in mind that whatever the price action, it effects your wallet. Let's do an example.
If you had invested $100 back in 1970 at the London AM gold fix and sold your position at the London PM gold fix on the same day, then reinvested the proceeds the next day and did this until today, you would have $12.
However, if you just bought bullion in 1970, held it, now it is worth $2,000.
Conclusion:
The US market consistently drove the price lower. The CFTC has never questioned this price action which is clearly anti-gold. Elke Koenig, a German financial regulator calls it, "collusion, and worse than Libor's scandal."
When you realize that this price action has been repeated for 45 years, it has to be someone with size and power like an investment bank, but it is a long ways from the rear to the front of the line.
In a token case the CFTC recently fined JP Morgan just $650K for years of data falsification on the CME. As for the Libor and FX culprits, they were fined a paltry average of $500K for years of rigging foreign exchange rates and currencies. -- Little guys do time while big boys just pay fines.
Tuesday, May 19, 2015
1960 Democratic Platform v. Trans-Pacific Partnership
The TPP is being pushed by President Obama, the democratic leader and is backed by the Republican Congress. Why is that? We know that since Obama has been in office, the Republicans only use a two letter word for any of his ideas - No!
I'll tell you why and it enforces another reason to abandon the two leading political parties because they are corrupt and only administer to the wealthy. They do nothing for ordinary citizens. In addition, my research has uncovered the 1960 Democratic Platform. Compare it with the present actions by the president and his party. Keep in mind that the Republicans opposed those concepts and I 'll give them consistency because they are still against them. Also, in your comparison, you will soon realize that today, neither party has a platform. They just use vague wording to express thoughts with the only objective to capture your vote. As they shake hands, they declare, "I'm for jobs, lower taxes and economic growth." They never offer a plan to obtain those ersatz issues. This point is so bad that there is even a website addressed to every minute that presidential candidate, Hillary Clinton has not answered a question by a reporter.
Here now is the issues that the democrats stood for back in 1960. Please, remember the first four on the agenda. I will show how the lack of conviction and character by the Democrats is reason to drop them like a bad habit. As for the Republicans, it is the same old same old: we got it and we're gonna keep it and screw you. They are the party that stands for guardian of privilege.
1960 Platform
1) The right to a useful and remunerative job in the industries or shops or farms or mines of the nation.
2) The right to earn enough to provide adequate food and clothing and recreation.
3) The right of every farmer to raise and sell his products at a return which will give him and his family a decent living.
4) The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home and aboard.(italic mine.)
5) The right of every family to a decent home.
6) The right to adequate medical care and the opportunity to achieve and enjoy good health.
7) The right to adequate protection from the economic fears of old age, sickness, accidents and unemployment.
8) The right to a good education.
There they are. Now, there is a valid question about these rights. They do not grow in nature. They are man-made values. So, who provides them? If one takes someone's product and gives it to another the first person is a slave. Our Founding Fathers said, "The right to the pursuit of happiness from his unalienable rights - freedom to think and act."
However, the translation to reality needs clarification. You start an enterprise. You find your product is needed and it is priced right to capture the market. You seek financial help to produce on a larger scale. A richer man takes a gamble on you. Together, you form a partnership. You open a plant and your neighbors help you to succeed. This is the pursuit of happiness. Time passes. Foreign enterprises use your idea and do the same thing in their nation. No patent protection and court costs are too expensive with little restitution. They're there and our plant is here until another rich man makes a deal with the foreign producer to bring his stolen crap here. They call it free trade.
Free Trade
is a lie. There is no such thing. Every nation uses laws and regulations, tariffs and currency manipulation to gain market share. The US uses subsidies. This is Ground Zero. This trading concept dates back to 1700 and the Industrial Revolution. The English aristocracy used it to fight the guilds of Europe. The working man has been under the whip ever since with only a slight rebirth during the union movement in the 1850s. Free trade is anti-worker and the only jobs it creates is from the established to the disadvantaged.
Back to our example, foreign nations use currency manipulation to underprice you and eventually, you are out of business. This is CAFTA, NAFTA in reality. We know that 60,000 plants have closed and millions of middle-class jobs were lost. Now, because wages rose in China, Mexico, Japan, Korea and elsewhere, the greedy rich man is seeking new grounds like Burma, Malaysia and the far corners of the earth to build plants and exploit cheap labor. This agreement will only make us poorer or do I need to remind you that 46 million are on food stamps and although we are at our highest population, at the same time we are at historic lows in our workforce. Free trade is the root to the decline in our standard of living and at last check, the US was not even in the top twenty nations in the world, not to mention our poor education and infrastructure. If it weren't for our subsidies, we would be a low tier third world nation.
There are few people in power speaking against the TPP. Senators Sanders and Warren are our limited hope. We know what past trade deals do to our nation and the economist, Joseph Schumpeter proved to us that the creative aspects in a free capitalistic society develop the actual destruction of products for newer versions. Out with the old 8-track and in with cassettes. Out with the rotary phone and in with the cell. In addition, do you recall presidential candidate, Ross Perot who predicted that millions of jobs would be sucked south of the border and beyond. He was correct!
Today, they say this deal will be different. I will show you how this is B.S.!
Back to the Future
When the last deal was made, they said the same answers. At the time a new US car went for $6K, gas a buck and the medium price for a home was $64,000. What happened?
Two trade deals later, the Fed printing and government waging stupid, useless wars just like Vietnam. There is not one person in Congress from the middle-class or working class. It is only a debate between the rich of both parties and people wonder why there is a wealth gap?
TPP
This deal has been "negotiated" which is a euphemism, by 85% executives or their lobbyists with the remaining percentages being lawyers, interpreters and bureaucrats. No one represents you or me. One other aspect that I found out about this deal is that it is secret and there will be no mention of currency manipulation which is the standard practice by foreign nations. Our political parties are despicable and are border line traitors to our citizens. The first four "rights" of 1960 have long been 86th. I say, " TPP? Hell no!" After all, I know that TP stands for toilet paper which is one level below fiat paper.
I'll tell you why and it enforces another reason to abandon the two leading political parties because they are corrupt and only administer to the wealthy. They do nothing for ordinary citizens. In addition, my research has uncovered the 1960 Democratic Platform. Compare it with the present actions by the president and his party. Keep in mind that the Republicans opposed those concepts and I 'll give them consistency because they are still against them. Also, in your comparison, you will soon realize that today, neither party has a platform. They just use vague wording to express thoughts with the only objective to capture your vote. As they shake hands, they declare, "I'm for jobs, lower taxes and economic growth." They never offer a plan to obtain those ersatz issues. This point is so bad that there is even a website addressed to every minute that presidential candidate, Hillary Clinton has not answered a question by a reporter.
Here now is the issues that the democrats stood for back in 1960. Please, remember the first four on the agenda. I will show how the lack of conviction and character by the Democrats is reason to drop them like a bad habit. As for the Republicans, it is the same old same old: we got it and we're gonna keep it and screw you. They are the party that stands for guardian of privilege.
1960 Platform
1) The right to a useful and remunerative job in the industries or shops or farms or mines of the nation.
2) The right to earn enough to provide adequate food and clothing and recreation.
3) The right of every farmer to raise and sell his products at a return which will give him and his family a decent living.
4) The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home and aboard.(italic mine.)
5) The right of every family to a decent home.
6) The right to adequate medical care and the opportunity to achieve and enjoy good health.
7) The right to adequate protection from the economic fears of old age, sickness, accidents and unemployment.
8) The right to a good education.
There they are. Now, there is a valid question about these rights. They do not grow in nature. They are man-made values. So, who provides them? If one takes someone's product and gives it to another the first person is a slave. Our Founding Fathers said, "The right to the pursuit of happiness from his unalienable rights - freedom to think and act."
However, the translation to reality needs clarification. You start an enterprise. You find your product is needed and it is priced right to capture the market. You seek financial help to produce on a larger scale. A richer man takes a gamble on you. Together, you form a partnership. You open a plant and your neighbors help you to succeed. This is the pursuit of happiness. Time passes. Foreign enterprises use your idea and do the same thing in their nation. No patent protection and court costs are too expensive with little restitution. They're there and our plant is here until another rich man makes a deal with the foreign producer to bring his stolen crap here. They call it free trade.
Free Trade
is a lie. There is no such thing. Every nation uses laws and regulations, tariffs and currency manipulation to gain market share. The US uses subsidies. This is Ground Zero. This trading concept dates back to 1700 and the Industrial Revolution. The English aristocracy used it to fight the guilds of Europe. The working man has been under the whip ever since with only a slight rebirth during the union movement in the 1850s. Free trade is anti-worker and the only jobs it creates is from the established to the disadvantaged.
Back to our example, foreign nations use currency manipulation to underprice you and eventually, you are out of business. This is CAFTA, NAFTA in reality. We know that 60,000 plants have closed and millions of middle-class jobs were lost. Now, because wages rose in China, Mexico, Japan, Korea and elsewhere, the greedy rich man is seeking new grounds like Burma, Malaysia and the far corners of the earth to build plants and exploit cheap labor. This agreement will only make us poorer or do I need to remind you that 46 million are on food stamps and although we are at our highest population, at the same time we are at historic lows in our workforce. Free trade is the root to the decline in our standard of living and at last check, the US was not even in the top twenty nations in the world, not to mention our poor education and infrastructure. If it weren't for our subsidies, we would be a low tier third world nation.
There are few people in power speaking against the TPP. Senators Sanders and Warren are our limited hope. We know what past trade deals do to our nation and the economist, Joseph Schumpeter proved to us that the creative aspects in a free capitalistic society develop the actual destruction of products for newer versions. Out with the old 8-track and in with cassettes. Out with the rotary phone and in with the cell. In addition, do you recall presidential candidate, Ross Perot who predicted that millions of jobs would be sucked south of the border and beyond. He was correct!
Today, they say this deal will be different. I will show you how this is B.S.!
Back to the Future
When the last deal was made, they said the same answers. At the time a new US car went for $6K, gas a buck and the medium price for a home was $64,000. What happened?
Two trade deals later, the Fed printing and government waging stupid, useless wars just like Vietnam. There is not one person in Congress from the middle-class or working class. It is only a debate between the rich of both parties and people wonder why there is a wealth gap?
TPP
This deal has been "negotiated" which is a euphemism, by 85% executives or their lobbyists with the remaining percentages being lawyers, interpreters and bureaucrats. No one represents you or me. One other aspect that I found out about this deal is that it is secret and there will be no mention of currency manipulation which is the standard practice by foreign nations. Our political parties are despicable and are border line traitors to our citizens. The first four "rights" of 1960 have long been 86th. I say, " TPP? Hell no!" After all, I know that TP stands for toilet paper which is one level below fiat paper.
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