Tuesday, November 30, 2010


What a game......can the PTB hold on to the Comex? They are literally under seige by the not so secret Asian buyers......Look for some amazing moves in the PMs with gold and silver during the next several months. It won't be straight up but you need to add to your positions on any weakness. SSRI SLW GFI EGO ANV SLV.....this is the game. Not all in but definitely be in this game. AS usual HOPE they knock it down 10% but this think is a powder keg right now with the physical delivery of Silver being made to put the Ponzi paper short of JPM on notice that it is finished. Stay tuned for more today.


update I

Analyst: Sprint’s Network Upgrade Will Net $2 Billion In Savings Annually
Nov. 30 2010 - 12:30 pm | 690 views | 0 recommendations | 0 comments
Investors have long been waiting for a turnaround from Sprint Nextel. Credit Suisse analyst Jonathan Chaplin thinks the carrier’s planned network upgrade is the key.

In a Nov. 30 note to investors, Chaplin estimated the cost of the upgrade, which is expected to begin in early 2011, at $6.5 billion. Since the work will condense and modernize its network, however, Chaplin also believes that Sprint will save at least $2 billion in maintenance and roaming costs. Those savings would add $2 a share in incremental value to Chaplin’s current price target of $6.


Monday, November 29, 2010

CONTAGION!! update I Droke

All the news swirls around the Eurozone meltdown as the market is manipulated down for a possible pullback and a Goldman profit taking for X-mas bonus distribution. Speaking of distribution look for this sloppy trading with a downward bias for a bit longer. They are trotting out Abbey Joseph Cohen on CNBC today so I think they will keep us in a range. Buy your miners on weakness for the next run to glory as you favorite uncle Ben has told you that he will print money for stabilization and destroy your dollar. Oil is a difficult short here so I will maintain a small ammount of DTO for a touch of 78-80 on the lower trend line. My confidence on that is only 50-50 which makes it a lousy trade here. Gold and Silver on any weakness needs to be accumulated. 1120 on the SnP looks like an area to keep your eye on. Pay attention to sentiment...we need that to shift more bearish, but with the Fed trying to reinstill CONfidence..I don't expect a massive beatdown of the market here.......Remember....the idea is to Extend and Pretend. Cycles indicate the hard down doesn' begin until 2012 so perhaps we continue the game another year. Continued strength in silver and gold bullion. Buy the physical. here is a nice link today. Hope all of you had a nice holiday and watch SSRI ANV SLW EGO GFI For weakness HL had a nice run. GL


from Joes comment

"During the interregnum between now and the fateful year 2012 when the final “hard down” of the 120-year cycle gets in full swing, we’ll likely experience what might be called a “different kind of deflation.” That is, while the deflationary undercurrents of the long cycle continues, periods of sometimes sharp “inflation” will be seen at time on the surface, only to dissipate once the government’s re-inflationary efforts cease. This curious mixture of inflation and deflation, which has been termed “retroflation,” there will be many marvelous opportunities for profiting from the Fed’s re-inflationary efforts, including in the precious metals and mining stock arena. If my reading of the economic tea leaves is correct, the year 2011 will be the last full year for individuals and corporations to shore up their balance sheets before the ugly effects of hyper deflation makes its appearance. With the 4-year and 6-year cycles in the ascent through most of 2011, the chances are high that we will witness additional inflation of asset prices. How then does this jibe with the fact that we’re in the final hyper-deflationary part of the Kress 120-year cycle? Going back to our earlier analogy of the deflationary 1890-1894 period of the previous 120-year cycle we saw that the attempts at artificially inflating asset prices succeeded up until the year 1892, just two years prior to the 120-year bottom."


Saturday, November 27, 2010

pt 1/2 Gerald Celente on KSFO with Brian Sussman 22 November 2010

"What happened to our 4th amendment rights?"

Thursday, November 25, 2010


The US bankers often go home to mommy and order a giant slosh of monetary inflation whenever in deep intractable trouble, like after the previous mistake in QE1 when ordering a giant slosh of monetary inflation. The USFed, led by the academic professor with no business experience, has ordered a fresh supply of gasoline from a lit fire hose, but he does so on a collapsing building. Bernanke has very erroneously diagnosed lack of liquidity within the system to be the underlying problem. He has prescribed a huge swath of 'free money' to be sent into the bond market as a solution. He has prescribed that cheap money continue to be delivered to the USEconomy. Bernanke has failed to notice the insolvency in banks, and has failed to notice that 0% has yet to prompt any revival in lending among banks. Bernanke is fighting INSOLVENCY with LIQUIDITY for a second time after learning nothing the first time.

The USTreasury 10-year yield has risen from a grand bond market dare, not at all from evidence of growth. Bond players dare the USFed to create another $1 trillion in new money. In no way does another lift in retail spending constitute a recovery. Household insolvency rises every month from worsening home loan balances. The USFed wants households to spend more on borrowed funds, yet they have depleted home equity and vanished income security. No, US bankers are confused with their wrecked financial engineering aftermath and the broad banking system insolvency that they refuse to acknowledge or discuss. Ever since the April 2009 decision by the USCongress to bless the falsified accounting practices by the Financial Accounting Standards Board, the big US banks have masked their ruined balance sheets, sold stock for their dead entities, and pretended to act as banks. Instead they are mere carry trade shells taking advantage of the USTreasury yield differentials, and storing the cash profits in the USFed, where it earns interest.

Finance minister Wolfgang Schauble from Germany was hostile in public remarks toward the desperate monetary decisions. At the recent G-20 Meeting, Schauble called USFed Chairman clueless openly (his word), describing his policies as reckless (his word). He ridiculed the USGovt approach to urge China and Germany to reduce their trade surpluses. Take surpluses as signs of success and competent industrial and policy management, where the US is void. He gives his nation credit for a strong competitive industry. He cites a direct contradiction. Schauble said, "The American growth model, on the other hand, is in a deep crisis. The United States lived on borrowed money for too long, inflating its financial sector unnecessarily, and neglecting its small and mid-sized industrial companies. There is no lack of liquidity in the USEconomy, which is why I do not recognize the economic argument behind this measure." Exactly on both counts!!! The USFed is fighting insolvency with liquidity rather than debt restructure for a second time, after learning nothing the first time. The US economists have lost their way so badly, that they no longer comprehend the concept of legitimate income. The US counselors push for putting more cash in consumer hands, regardless of where it comes from. Call it heresy, or call it incompetence, or call it blindness from the Keynesian bright lights that burn bright in the inflation laboratory.

New money does not cure an insolvent banking system or insolvent households. No sterilization of QE2 is in the plan, to serve as protection for the USEconomy. Not in QE2!! My forecast is for the hollowing out of the USEconomy from a massive cost drain with puny export benefit, compounded by continued income erosion. Price inflation will be labeled as growth, even income growth, the chronic sins. The borrowing costs have been near 0% for 18 months with no economic response, making Bernanke's points again vacant, myopic, and deficient. He is fighting an endemic insolvency problem with amplified monetary inflation. A voice with hint of wisdom came from former New York Fed President E Gerald Corrigan Corrigan. He said, "Even in the face of substantial margins of under-utilization of human and capital resources, efforts to achieve an upward nudge in today's very low inflation rate make me somewhat uncomfortable." His experience came under ex-USFed Chairman Volcker during the late 1970 decade, who raised interest rates to 20% to combat inflation, pushing the economy into the 1981-82 recession. That was the final chapter of anti-bubble USFed chieftain linneage. Since the Greenspan Era, it has been full speed ahead with inflation engineering, asset bubble creation, erudite apologists, permitted bond fraud, careful collusion, and reckless management. They have systemic failure to show for it.

The claim by Bernanke and a supporting chorus of economists that QE2 will bolster USEconomic competitiveness is fallacious, and patently backwards as usual. It will push the US further into a wasteland, a vestibule to the Third World. The higher cost structure uniformly imposed will render great damage in a profit squeeze for businesses and discretionary spending squeeze for households. New money does not cure an insolvent banking system or insolvent households. It presents a new problem of significiant price inflation. They want it, so they can call it growth!! Producing high value products efficiently and cost effectively makes the nation competitive. Imposing a fair tax structure that is stable, reasonable, and with proper incentives makes it competitive. Having an active legal prosecution staff to combat bond fraud and defense appropriation fraud makes it competitive. Having a strong education system makes it competitive. A weaker currency raises the cost structure, increases import costs, and assists the export trade if a nation has one. The United States has shipped a large segment of it away in the last 10 years to China, after having shipped a larger segment away in the 1980 decade to the Pacific Rim. Not only did the US promote its financial sector, but it denigrated the industrial sector as dirty. By removing a significant portion of the nation's capacity to generate legitimate added value income, the USEconomy was left vulnerable to debt overload and insolvency. The US Ship of State was hoisted on its own petard. For those ignorant of naval terminology, that means the US killed itself in a great display of cannon backfire in recoil. The QE2 initiative will be disastrous from many angles, certain to push the nation into an Inflationary Depression, from the current chronic Deep Recession.


Increases to the silver margin requirement in futures contracts should be viewed as the final act of desperation. It is a device to control price within the paper silver arena. However, in a grand backfire, a higher margin produces a lower price for the physical buyers, who eagerly step up to place and fill orders. The margin maintenance hike on November 9th was six times greater for silver than for gold. The Big Four US banks are caught in an historically unprecedented short squeeze, bleeding $billions. Tuesday November 9th saw a powerful gold & silver price downdraft. The COMEX raised the silver margin requirement in a bland attempt to slow a raging bull market amidst a broken global monetary system. One week later they raised the margin again for both monetary metals. The price downdraft continued. But some calmer winds in Europe enabled precious metals prices to recover. Silver has snapped back much more than gold.

The Chicago Mercantile Exchange raised the margin requirements for silver on November 9th. It was highly motivated. They wanted to prevent a blowout upside move in silver past $30 before Christmas, and to relieve some of the pain to the Big Four US banks. Unlike gold & silver, no margin hikes were doled out for soybeans, corn, sugar, or cotton despite their concurrent price gains. The message is clear, that desperation has set in relative to precious metals, as conditions are breaking down badly. The CME sent out a memo raising the margin maintenance requirements for silver futures by up to 29%, from $5000 to $6500 per contract. Initial positions have a slightly higher margin. It is their right, being the market maker. Let not their fast disappearing silver inventory deter their path. Less than two weeks later, the CME raised the silver margin maintenance requirement another 11.5% to $7250 in a sign of desperation. They also raised the gold margin, but only by 6% from $4251 to $4500 in a symbolic gesture. The CME motive is less about risk mitigation concerns and more driven by the desire to restrain the bull market movement. The investment world will regroup long before Christmas, like in the next week or two. Just when the European woes focused on Ireland, and a rescue aid package seemed in the offing, the silver price jumped upward by $2.00 on a single day, November 18th, a strong telegraph across the paper-physical silver table. The Powerz cannot halt the silver juggernaut, which will see $30/oz by January. If a double hike in the silver margin is the best they have, then they are truly whistling in the grave yard.

READ THE ENTIRE ARTICLE....This tells you the GAME... buy SSRI SLW SLV ANV HL....THIS is going to be a TITANIC and EPIC struggle...read it all


Chomsky on the economy


Vietnam has extended until the end of the year the period in which traders may import gold to try to bring local prices back into line with the global market, according to the Vietnam Gold Traders Association.

About 10 traders may import the metal from Nov. 24 to Dec. 31, with allowances of 300 kilograms to 1,000 kilograms, Vice Chairman Nguyen Thanh Truc said today. Previously, a central- bank directive permitted imports only for the 14 days to Nov. 23, according to a Nov. 9 statement from the State Bank of Vietnam.

Local prices have climbed to more than international levels as three devaluations of the dong in the past year, slumping stock prices and faster inflation boosted demand. The government has suspended gold imports in the past to help support the dong, which investors sell to buy dollars and gold. Vietnam consumes more gold per head than India, the biggest overall user.

“Although local prices have eased” after imports were allowed, they are still sometimes higher than world prices, Truc said by phone. One tael is about 1.2 ounces.

Local gold traded at 35.8 million dong per tael in Hanoi today, according to a phone-information service run by Vietnam Posts and Telecommunications. That compares with today’s global spot price of $1,372 an ounce, which is equivalent to about 32.1 million dong per tael, according to Bloomberg calculations using the official exchange rate for the Vietnamese currency.

Central Bank Policy

The central-bank decision on Nov. 9 to allow imports for 14 days was meant to “continue stabilizing” the local gold market, according to that day’s statement. Central bank Governor Nguyen Van Giau wasn’t immediately available for comment today on the extended import period.

Global gold prices surged to a record this month as weaker currencies and Europe’s sovereign-debt concerns boosted demand. Immediate-delivery gold peaked at $1,424.60 an ounce on Nov. 9, while Vietnam’s prices climbed to a record 38.2 million dong per tael the same day.

Rising domestic gold prices contributed to inflation, Prime Minister Nguyen Tan Dung told delegates at the National Assembly in Hanoi yesterday. Inflation accelerated in November to 11.09 percent, the highest rate since March 2009.

The dong traded at 19,495 per dollar today, according to Bloomberg data, and has weakened 5.5 percent this year.

Vietnam imported 6.86 tons of gold in the first nine months of 2010, the Vietnam News newspaper reported yesterday, citing data from the State Bank of Vietnam.

from Bloomberg

Tuesday, November 23, 2010


With gold and silver consolidating recent gains, King World News interviewed James Turk out of London. When asked about the action in both gold and silver Turk stated, “I think the important point today is that gold has moved back above its short-term moving averages. This should bring a great deal more buying into the market. I was very impressed today that gold was strong in spite of the fact that the US dollar was up a full point. Jim Sinclair has been bringing up this point, and it looks like he nailed gold separating from the dollar in terms of the action.”
November 23, 2010

Turk continues:

“The big shock here in London is the Irish bailout. Many were not expecting it, and when it was announced, the size of the bailout was the second shock. The implications are now that everyone is starting to look at Portugal and Spain. Portugal is a small player, so therefore its impact will be limited. Spain on the other hand is a big economy, it is larger than Ireland, Portugal and Greece put together.

So the interesting thing is once the Irish bailout is finished and a bailout is put together for Portugal, more than 50% of the 750 billion Euro stabilization fund will be used on these periphery countries. The question therefore becomes will there will be enough left in the fund for Spain? And don’t forget about Italy, who’s economy is as big as Spain’s.

All in all Eric, problems in Europe have a long way to go. So expect more people to look for safe haven alternatives. This will be yet another catalyst to propel gold and silver much higher.

Silver had a bit of a breather today, and the gold/silver ratio went back up to test resistance at 50. It may work sideways for another day or two, but look for 48.5 to be taken out soon on the way to 40 to 42. I am watching that 48.5 level carefully because when we see that fall it will most likely occur as silver is making a new high above $29.30.


Barbra Streisand - The Way We Were (1975)

INSIDE JOB: New Documentary Exposes How 'Banksters' Continue To Steal Ou...

"There's nothing we can believe in anymore"

"You gotta be kidding....If you would have looked you would have found something."


This is JPMs soldier that now runs the silver short. This is the critical short of the Fed to keep this monster under control...Let's hope that the forces of nature can defeat this cabal soldier.


Run for cover....Its the end of the world. Meanwhile we need to make some money today in the stock market....added a little SLV...and will make a physical silver purchase today....thats my first "call to arms"> I'm in a hurry as usual and advise all of you to ignore the Korean BS. Its all a chessgame and if North Korea wants to get nuked to the Dark Ages then I guess they can hava a war. In other words ignore the nonsense. Look for a boost to the dollar with this and the Eurozone issues.

My play today will be eighteen holes of "my game". My lovely daughter is in town and I am thankful for the ponzi giving us all another year to trade paper assets. With a little luck and a well laid plan we just might get out of this with a nasty depression to short to hell in a year. Otherwise near term stagflation ahead this year so enjoy the prices.....of goods and essentials. Remember its not a joke for people living on a shoe string....and that person could easily by you or me. gl gang

Monday, November 22, 2010

Harvey Organ proposes position limits of precious metals to the CFTC

Please note that this gentleman is one of the foremost experts in this trade and I have included him on the left in My Blog List...I encourage all of you to closely follow his posts. They put me to shame. Also I have placed the Watchtower with Turd Ferguson on the list......If you wish to be informed in detail on the entire Ponzi then you need to follow these closely. gl


Running thoughts....trade silver.....its the game. The JPM Silver short is under attack. YOU have to make the play. Buy bullion silver and store it yourself. This will be the last play in my opinion. It could pullback to 23 area but its a stretch. Doesn't really matter anymore, this ponzi is getting long in the tooth and the real meltdown is close. Hve fun in this game. Silver took its usual morning hit by the PTB and now is rebounding. I'm doing my part to fight the ponzi with a silver bullion purchase this week and of course will continue the paper trade through slw slv ssri. Just remember buy um on weakness. Don't be timid now. This game is rigged and with QE you have to play.

Look at NBR ATPG CHK...as trades also here. CLDX is also attractive along with a favorite DCTH.

Dull week ahead but money can be made in a narrow trading range market .......have fun ...gl

Saturday, November 20, 2010

Friday, November 19, 2010


Web Censorship Bill Sails Through Senate Committee
By Sam Gustin November 18, 2010 | 2:50 pm | Categories: Intellectual Property, Politics Who says Congress never gets anything done?

On Thursday, the Senate Judiciary Committee unanimously approved a bill that would give the Attorney General the right to shut down websites with a court order if copyright infringement is deemed “central to the activity” of the site — regardless if the website has actually committed a crime. The Combating Online Infringement and Counterfeits Act (COICA) is among the most draconian laws ever considered to combat digital piracy, and contains what some have called the “nuclear option,” which would essentially allow the Attorney General to turn suspected websites “off.”

COICA is the latest effort by Hollywood, the recording industry and the big media companies to stem the tidal wave of internet file sharing that has upended those industries and, they claim, cost them tens of billions of dollars over the last decade.

The content companies have tried suing college students. They’ve tried suing internet startups. Now they want the federal government to act as their private security agents, policing the internet for suspected pirates before making them walk the digital plank.

Many people opposed to the bill agree in principle with its aims: Illegal music piracy is, well, illegal, and should be stopped. Musicians, artists and content creators should be compensated for their work. But the law’s critics do not believe that giving the federal government the right to shut down websites at will based upon a vague and arbitrary standard of evidence, even if no law-breaking has been proved, is a particularly good idea. COICA must still be approved by the full House and Senate before becoming law. A vote is unlikely before the new year.

Among the sites that could go dark if the law passes: Dropbox, RapidShare, SoundCloud, Hype Machine and any other site for which the Attorney General deems copyright infringement to be “central to the activity” of the site, according to Electronic Frontier Foundation, a digital rights group that opposes the bill. There need not even be illegal content on a site — links alone will qualify a site for digital death. Websites at risk could also theoretically include p2pnet and pirate-party.us or any other website that advocates for peer-to-peer file sharing or rejects copyright law, according to the group.

In short, COICA would allow the federal government to censor the internet without due process.



Gold as a deflation hedge (United States, 1933)

Webster defines deflation as “a contraction in the volume of available money and credit that results in a general decline in prices.” Typically deflations occur in gold standard economies when the state is deprived of its ability to conduct bailouts, run deficits and print money. Characterized by high unemployment, bankruptcies, government austerity measures and bank runs, a deflationary economic environment is usually accompanied by a stock and bond market collapse and general financial panic -- an altogether unpleasant set of circumstances. The Great Depression of the 1930s serves as a workable example of the degree to which gold protects its owners under deflationary circumstances in a gold standard economy.

First, because the price of gold was fixed at $20.67 per ounce, it gained purchasing power as the general price level fell. Later, when the U.S. government raised the price of gold to $35 per ounce in an effort to reflate the economy through a formal devaluation of the dollar, gold gained even more purchasing power. The accompanying graph illustrates those gains, and the gap between consumer prices and the gold price.

Second, since gold acts as a stand-alone asset that is not another’s liability, it played an effective store of value function for those who either converted a portion of their capital to gold bullion or withdrew their savings from the banking system in the form of gold coins before the crisis struck. Those who did not have gold as part of their savings plan found themselves at the mercy of events when the stock market crashed and the banks closed their doors (many of which had already been bankrupted).

How gold might react to a deflation under a fiat money system is a horse of another color. Economists who make the deflationary argument within the context of a fiat money economy usually use the analogy of the central bank “pushing on a string.” It wants to inflate, but no matter how hard it tries the public refuses to borrow and spend. (If this all sounds familiar, it should. This is precisely the situation in which the Federal Reserve finds itself today.) In the end, so goes the deflationist argument, the central bank fails in its efforts and the economy rolls over from recession to a full-blown deflationary depression.

During a deflation, even one under a fiat money system, the general price level would be falling by definition. How the authorities decide to treat gold under such circumstances is an open question that figures largely in the role it would play in the private portfolio. If subjected to price controls, gold would likely perform the same function it did under the 1930's deflation as described above. It would gain in purchasing power as the price level fell. If free to float (the more likely scenario), the price would most likely rise as a result of increased demand from investors hedging systemic risks and financial market instability (as was the case globally during the 2008 credit meltdown).

The disinflationary period leading up to and following the financial market meltdown of 2008 serves as a good example of how the process just described might unfold. The disinflationary economy is a close cousin to deflation, and is covered in the next section. It provides some solid clues as to what we might expect from gold under a full deflationary breakdown.

Gold as a disinflation hedge (United States, 2008)

JUST AS THE 1970s REINFORCED GOLD'S EFFICIENCY as a stagflation (combination of economic stagnation and inflation) hedge, the 2000's decade solidly established gold’s credentials as a disinflation hedge. Disinflation is defined as a decrease in the inflation rate over time, and should not be confused with deflation, which is an actual drop in the price level. Disinflations, as pointed out above, are close cousins to deflations and can evolve to that if the central bank fails, for whatever reasons, in its stimulus program. Central banks today are activist by design. To think that a modern central bank would sit back during a disinflation and let the chips fall where they may is to misunderstand its role. It will attempt to stimulate the economy by one means or another. The only question is whether or not it will succeed.


Thursday, November 18, 2010


Solar panel producer Suntech Power (NYSE: STP) swung to a third quarter profit from the previous three-month period as shipments and revenues hit new quarterly highs.

For the third quarter, attributable net income was $33.1 million, or $0.18 per diluted American Depository Share (ADS), compared to a net loss of $174.9 million, or negative $0.97 per ADS, in the second quarter of 2010. Each ADS represents one ordinary share.

The company, which operates in China, Switzerland and the US, said non-cash impairment charges and provisions related to credit risks had a negative impact of $1.00 per ADS in the second quarter.

Suntech has increasingly looked to diversify its sales globally, and the effects are now being seen, having recently undertaken a 5MW project in Thiva in Greece, one of the largest grid connected solar projects in the country, and a 44MW project in Thailand.

During the most recent period, total net revenues grew 19.0% sequentially and 57.2% year-over-year to $743.7 million, as the company said it sold more product in the Americas in the third quarter than it did in the full year of 2009. Suntech even opened a module manufacuturing facility in Arizona with expected 50MW capacity to help the company service the increasing demand in the region.

Indeed, total photovoltaic panel shipments increased 25.3% sequentially and 107.1% year-over-year, and the company expects this to grow by 10% more in the fourth quarter.

Suntech also said that it reached production capacity of 1.6GW during the third quarter, and that the company is on track to achieving its target of 1.8GW cell and module capacity by year-end.

Separately, the company announced Wednesday it is in the process of acquiring 100% of the 375MW of ingot and wafer slicing capacity in China for a total cash consideration of $127 million. The wafer manufacturing capacity is being spun off from a subsidiary of Glory Silicon Technology Investments, in which Suntech holds an equity investment.

"As we expand our internal wafer manufacturing capacity, we are confident we will have an improving earnings profile as we benefit from lower wafer cost," said chairman and CEO Dr. Zhengrong Shi.

"Upstream integration is in line with Suntech's strategy to continue to reduce the cost of solar energy and stimulate greater global adoption of clean, renewable energy."

Suntech has delivered more than 12 million photovoltaic panels to over one thousand customers in more than 80 countries. The company's cash and equivalents totaled $946.2 million at quarter-end.
from Seeking Alpha

Wednesday, November 17, 2010


Cisco (CSCO) designs, manufactures and sells Internet Protocol (IP)-based networking and other products related to the communications and information technology industry and provides services associated with these products and their use. The product portfolio consists of a broad line of products for transporting data, voice, and video within buildings, across campuses, and around the world.

CISCO’s fiscal year ended on July 2010. It recorded $40 Billion in Sales with a Gross Profit or $25.6 Billion and a net income of $7.7 Billion. Earnings per Share increased with 26.7% from fiscal 2009 to 2010. Operating and Net Income have on average increased with around 11% in the last 10 years. Total cash and investments ($39.8 Billion) is more than twice the size of its total debt. CISCOs performance in the last 10 years has been impressive and it has built up a rock solid balance sheet


Tuesday, November 16, 2010

John Perkins "Courage"

I encourage you to peruse this mans other videos and find out who he was. One of the most courageous men I know...GL


From ZH.... just a reminder that QE and dollar destruction as predicted will create stagflation as asset prices such as homes deteriorate.........this is not overall inflation.
The question of the night is whether Wal-Mart can absorb a 30% price increase in cotton products, because as Bloomberg reports, it will very soon have to. Gap Inc., J.C. Penney Co. and other U.S. retailers may have to pay Chinese suppliers as much as 30 percent more for clothes as surging cotton prices boost costs. Reports Bloomberg: "It’s a little terrifying to deal with cotton suppliers now," said Vicky Wu, a sales manager at Suzhou Unitedtex Enterprise Ltd., a closely held, Jiangsu province-based clothes maker that counts Gap and J.C. Penney among its clients. This is not an exaggeration - in last week's What I Learned This Week, 13D.com's Kiril Sokoloff, a China expert, noted: "We bought cotton back at around $0.99 because we thought the fundamentals were still very powerful. We liquidated the entire position on October 26 at around $1.29 because many Chinese clothing manufacturers were nearing bankruptcy and the Chinese government was cracking down on hoarders, speculators and investigating position sizes." Note the completely unwanton use of the word "bankruptcy" by the otherwise mellow Bulgarian - what has happened in cotton prices is setting off a seismic shift for low-margin retailers, and many traditionally safe and stable companies will soon be forced to attempt to pass on surging costs, or go out of business, especially as the ranks of low-cost vendors goes up in smoke. Bernanke's inflation exporting model is about to backfire with a vengeance. In this most direct consequences of excess liquidity-driven near-hyperinflation, the best possible outcome would merely a total collapse in margins. If you think a very irrelevant Dick Bove hates Bernanke now, wait until you listen to the Walton family's thanksgiving dinner...

There are those who see absolutely no inflation in the future. Then, there is Ben Bernanke's "but he is really not printing money" reality:

“American consumers better get used to rising prices on the shelves of Wal-Mart and other retailers,” said Jessica Lo, Shanghai-based managing director at China Market Research Group. “China’s manufacturers are getting squeezed not only by rising cotton costs but also soaring real estate and labor costs.”

John Ermatinger, Gap’s Asia president, declined to say whether it would raise prices. “We are going to be mindful of our competition,” he said in a Nov. 10 interview in Shanghai. “We are going to be mindful of our consumer. That’s how we’ll ultimately establish our prices.”

Shandong Zaozhuang Tianlong Knitting Co., which makes Polo Ralph Lauren Corp. T-shirts and track suits for Le Coq Sportif Holding SA, has raised prices as much as 70 percent from a year earlier, said sales manager Fred Hu. “If cotton keeps rising like this, we will need to lift prices by 30 percent by the Spring Festival next year or we lose money.”

Unitedtex, which sells $24 million worth of shirts and jackets annually to Gap, plans to raise prices by 5 percent to 30 percent for products that will be available in April, Wu said in an interview. The supplier plans to increase capacity to meet the retailer’s demand, she said.

“It’s very hard to budget for input cost, if prices are as volatile as they are,” said Peter Rizzo, Sydney-based managing director at FCStone Australia Pty. "It heightens the awareness of Chinese textile manufacturers to look at risk-management tools.’’

Never mind collapse, corporate margins are about to prolapse, possibly turning negative. Guess what that means for record S&P EPS estimates for 2011...

Monday, November 15, 2010

End of Liberty

Enjoy the parade.....hehehe


Does this date in 1999 ammount to a declaration of war on the American People. I suspect some here may thing so... but of course it is only an exercise in futility for you to believe the structure of the government that has been carefully crafted will ever punish these individuals. They are all now living off off their NINE figure payouts in palatial estates and still speaking publicly as though they are experts and economic heroes to the people they screwed. I love to see how this all plays out as the system created now reduces to ashes the assets that were bid up to the sky and sheeple gorged on the excesses created while believing there would be no end to the flow of fast money. Now the true power will scoop up all of your excess as it deflates to pennies on the dollar over the next few years. All in a day's work.

"On November 12, 1999, President Clinton signed the Gramm-Leach-Bliley Act (GLB) into law. This landmark legislation does much to unravel the influence of the Glass-Steagall Act on the United States' financial system."

Watch out for the next week gang only quick trades and watch for a reversal to buy the PM miners .....I'm trading ANV EGO SLW SSRI GFI......Oil is a nice short here.

Sunday, November 14, 2010


I thought that today might give me a chance for an original post that addresses the next several years as it applies to us in our everyday life. By the way this is what I think is a middle of the road prediction with a plus or minus error of 1.2%....;-).

The current effort by our Gov and FED is directed towards consumer confidece, since we are a GDP that is 70% consumer driven. Without a return of consumer spending then there is can be no growth of the economy. Of course as the consumer grows our trade deficit with China would explode also which can only exaccerbate the structural trade imbalance. Short term this may appear to be a healing economy but as most of us know it is only an extend and pretend bandaid.

QE....the big bad Ben attack on the deflationary spiral intended to restore consumer CONfidence by raising your "feeling of wealth" with hundreds of billions of USD will only be a temporary "stimulus" for the stock market. The reason is simple. Ultimately the stock market will succumb to the "true" underlying economy and resultant earnings deterioration as the consumer drowns in a failing effort in extend and pretend.

The "real or hidden" reason for QE is to increase the reserves of the "big banks" at the expense of the USD. The reason for reserve increases in the big banks (that by the way got us into this mess) is that the deleveraging of their MBS is not even close to being complete. This is also dovetails into Derivative/dollar carry trade, that Ben had decided to be the controller of. Liquidity is the lifeblood of the bankers and if it is not perpetuated in some fashion then turn out the lights. The Yen carry trade was approximately 1.6 Trillion/day in 2007. The dollar carry trade has been the liquidity leader since 2009 and is now over 4Trillion/day. These are ominous numbers that will provide a collapse that cannot be stemmed like the September 15 2008 meltdown was by guaranteeing all money market accounts and pumping in almost a Trillion dollars of world liquidity that day.

When this liquidity nightmare pops as this carry trade unwinds the effects will be devastating and a global banking holiday for several days will be imposed as measures to restore banking are taken. Your accounts will be frozen at your local bank(take measures by holding cash on hand).

Enough boring economics, lets get to the practical aspects. First lets address STRESS. There are many signs of this currently occurring throughout our country with increased evidence of child and spousal abuse. Many areas are reporting large increases in burglaries which I believe are on beginning. The unemployment payments have kept this from exploding, but that is running out fast and with the Republicans in control of the House it coud unwind dramatically.

As global liquidity continues to rise essential will continue to accelerate in cost so be prepared for essentials shock at the grocery store and utilities. There may be some respite from the cost of essentials when the liquidity crisis occurs..but remember...there will be NO MONEY in a deflationary collapse so even if prices of essentials moderate...no one can purchase them.....AND the pipelines for some essentials will be disrupted. Many of the imported essential will simply disappear and diverted to more favorable markets. In other words mass confusion as new markets become established by the emerging market exporters. A trustworthy currency exchange will be the driver of the new markets. My guess is at some point we will not be viewed faborably...in part due to our current manipulation of our own currency. After all we did engineer this entire crisis. After all we have over 800 military bases in 125 countries. After all we have imposted dicatorships (in the name of democracy) for over 100 years around the world. You may wish to ignore this at your own peril but when this unravels in the next year or two.....THOSE PEOPLE WILL NOT!

Friday, November 12, 2010


But they can't.......from Lew Rockwell

John Maynard Keynes thought he had pretty well killed gold as a monetary standard back in the 1930s. Governments of the world did their best to help him. It took longer than they thought. Gold in the money survived all the way to Nixon, and it was he who finally drove the stake in once and for all. That was supposed to be the end of it, and the beginning of the glorious new age of paper prosperity.

It didn’t work out as they thought. The 1970s was a time of monetary chaos. What was worth a buck in 1973 is worth only 20 cents today. Stated another way: a dime is worth 2 cents, a nickel is worth a penny, and a penny is worth...nothing at all. It is an accounting fiction that takes up physical space for no reason.

Welcome to the age of paper money, where governments and central banks can manufacture as much money as they want without limit. Gold was the last limit. Its banishment as a standard unleashed the inflation monster and leviathan itself, which has swelled beyond comprehension.

But guess what? Gold actually hasn’t gone anywhere. It is still the hedge of choice, the thing that every investor embraces in time of trouble. It remains the most liquid, most stable, most fungible, most marketable, and most reliable store of wealth on the planet. It has a more dependable buy-sell spread than any other commodity in existence, given its value per unit of weight.

But is it dead as a monetary tool? Maybe not. Whenever the failures of paper become more-than-obvious, someone mentions gold and then look out for the hysteria. This is precisely what happened the other day when Robert Zoellick, head of the World Bank, made some vague noises in the direction of gold. He merely suggested that its price might be used as a metric for evaluating the quality of monetary policy.

What happened? The roof fell in. Brad DeLong of Keynesian fame called Zoellick "the stupidest man alive" and the New York Times trotted out a legion of experts to assure us that the gold standard would not fix things, would hamstring monetary policy, would bring more instability rather than less, would bring back the great depression, and lead to mass human suffering of all sorts.

One thing this little explosion proved: newspapers, governments, and their favored academic economists all hate the gold standard. I can understand this. The absence of the gold standard has made possible the paper world they all love, one ruled by the state and its managers, a world of huge debt and endless opportunities for mischief to be made from the top down.

One of the funniest explosions came from Nouriel Roubini, who listed a series of merits of gold without recognizing them as such: gold limits the flexibility and range of actions of central banks (check!); under gold, a central bank can’t "stimulate growth and manage price stability" (check!); under gold, central banks can’t provide lender of last resort support (check!); under gold, banks go belly-up rather than get bailed out (check!).

His only truly negative point was that under gold, we get more business cycles, but here he is completely wrong, as a quick look at the data demonstrates. And how can anyone say such a thing in the immediate wake of one of history’s biggest bubbles and its explosion, which brought the world to the brink of calamity (and it still isn’t over)? Newsflash: it wasn’t the gold standard that gave us this disaster.

As Murray Rothbard emphasized, the essence of the gold standard is that it puts power in the hands of the people. They are no longer dependent on the whims of central bankers, treasury officials, and high rollers in money centers. Money becomes not merely an accounting device but a real form of property like any other. It is secure, portable, universally valued, and rather than falling in value, it maintains or rises in value over time. Under a real gold standard, there is no need for a central bank, and banks themselves become like any other business, not some gigantic socialistic operation sustained by trillions in public money.

Imagine holding money and watching it grow rather than shrink in its purchasing power in terms of goods and services. That’s what life is like under gold. Savers are rewarded rather than punished. No one uses the monetary system to rob anyone else. The government can only spend what it has and no more. Trade across borders is not thrown into constant upheaval because of a change in currency valuations.

Of course the World Bank head was not actually talking about a real gold standard. At most he was talking about some kind of rule to rein in central banks that attempt what the Fed is attempting now: inflating the money supply to drive down the exchange-rate value of the currency to subsidize exports.

Still, it’s good that he raised the topic. The Mises Institute has been pushing scholarship and writing about gold since its founding. To be sure, the issue of the gold standard is largely historical, but no less important for that reason. The people who hate the gold standard of the past have no desire for serious monetary reform today.

We should be thrilled should the day ever come when monetary authorities really make paper money directly convertible into gold (or silver or something else). I doubt we can look forward to that day anytime soon. But one thing they could let happen right away: free the market to create its own gold standard by permitting true innovation and choice in currency. It’s a fair guess that opponents of the gold standard would oppose that too, because, as Alan Greenspan himself once admitted, the people who oppose gold are ultimately opposed to human freedom.

This debate isn't really about monetary policy, much less the technical aspects of the transition. It is about political philosophy: what kind of society do we want to live in? One ruled by an ever-growing, all-controlling state or one in which people have freedom guaranteed and protected?

Thursday, November 11, 2010


BE aware that the Eurozone is breaking down.......BUT...they will plug it for awhile longer ....maybe. Silver and gold still with bias up and 1500 this year in gold should be met. Danger will exist for many banks and liquidity when this unwinds so keep cash on hand...REMEMBER THIS. DANGER DANGER. Bens game of increasing reserves has NO chance of filling this liquidity crisis when the Eurozone starts the dominoe default. DO SO NOW. I could be wrong on how long he extends the game. For now though ...lets play.

Here is an article Joe posted...
You know what the mainstream media is saying about some of the hottest small cap stocks out there, but what are traders - the ones who actually push a stock higher or lower - saying? Here are some 'behind the scenes' thoughts on six stocks you need to watch.

It's not that the news was bad for Sunesis Pharmaceuticals, Inc. (NASDAQ:SNSS); Vosaroxin seems to be working reasonable well per Phase II data. It just hasn't helped the stock... and that's the alarming part. If Sunesis Pharmaceuticals can't move on news that should be scooting it considerably higher, there may be something else looming - for the worse - here.

Was it a short-covering rally for China MediaExpress Holdings Inc (NASDAQ:CCME), or was it deserved? It may have been more of the former than most buyers care to admit. Short interest in CCME fell from 44.4% to 34.3% over the last two weeks of October. As of the last look, there are 3.558 million shares of China MediaExpress Holdings still being held as a short position.

The touted reason behind Tuesday's rocket ride from EDAP TMS S.A. (ADR) (NASDAQ:EDAP) is the possibility that the FDA will be clearing Sonolith within the next few days. The expectation was voiced assuming it takes 2 to 3 months to work through a 501k. [Editorial note: There was no substantiation regarding this claim about EDAP TMS S.A., and there's also a suspicious lack of follow-through from the stock today.]

Sign-up for Free to Receive Future Commentary
and Trading Alerts on CYCC, EDAP, DRYS, and SNSS.

Ouch! SMART Technologies Inc (NASDAQ:SMT) is down 27% this morning after unveiling last quarter's numbers. Clearly the market didn't like them. At the current price of $9.52 though, there's something else investors may want to keep in mind about SMART Technologies... margins/profits widened despite the dip in revenue. The bulk of the challenge is budget constraints from its potential customers. However, the worst-case scenario now seems to be priced in. And, annualizing last quarter's EPS, the current P/E is a nice 7.3.

While trading in Anadys Pharmaceuticals, Inc. (NASDAQ:ANDS) has not only been boring lately, but bearish as well, potential buyers should be reminded that Piper Jaffray is rating ANDS as an overweight stock with a target of $3. Between lots of cash ($42 million, versus a market cap of $73 M) and a nice pipeline with some key Phase II studies, Anadys Pharmaceuticals can go the distance by themselves, or on the case of ANA598, possibly find a partner. [Editorial note: There something to be said about buying a stock when nobody else wants it or is even thinking about it.]

Wednesday, November 10, 2010


This is an article from Seeking Alpha that I believe is more than a silver of truth. Yesterdays manipulation of the silver and gold trade will not last long so buy on weakness.

I have literally sat in my chair, struggling with a question for over two hours: "why has silver moved parabolic since the QE2 announcement?" It has been surprising for the following reasons:

1) QE2 was a nominal disappointment (see the immediate tanking of the market post-Jackson Hole announcement), Goldman set expectations for $100 million month, 10 months
2) Major investment banks declarted before the actual announcement that QE2 was "priced in" (how an unprecedented action with no apriori modeling in a open system can be "priced in" is beyond me)
3) Silver has traditionally lagged gold's movements for the past year

My questions, knowing this, are why

1) Why has QE2 been expressed most fervently in the precious metals market?

2) Why silver specifically ?

3) Why so dramatically?

4) Why has the major movements been witnessed post-QE2 announcement (when things were said to have already been "priced in")

5) Why has it decoupled its synchronizing with general fall of dollar (if you notice, it rose on Nov. 8th despite the dollar strengthening in many categories)

I think I have a theory that explains this.

Simply, I believe that SLV (SLV) and SIVR (SIVR) and DBS (DBS) and USV (USV) and whatnot act, whether intentionally or not, as massive price suppressors due to the creation of "paper silver" (parallel to "paper gold") that satisfies investor's demand for precious metals.

Buying physical bullion is deemed socially atypical, a mix between the bizarre, conspiratorial, and apocalyptic. One would expect the purchaser to wear an aluminum (industrial metal) hat during their precious metal purchase. In the real world, buying physical bullion is crazy.'

But how crazy is it in a post-QE2 world? A world where Glenn Beck and Rush Limbaugh spent the day and night raving about hyperinflaitonary money printing on November 3rd and 4th?

Very possibly, QE2 announcement spurred a lot of people to get off the computer, and physically go to a bullion shop to buy their lazy selves a physical hedge due to fears that are becoming increasingly more rational in a post-QE2 world.

It explains why the movement can especially be seen in PMs, as a major media attention on the action raised the awareness and cognizance surrounding QE2 to the general public.

It explains why it was seen in "poor man's gold" or "common man's gold" rather than $1,400 dollar/ounce gold as silver would be more malleable (pun intended) to public revulsion regarding QE2.

It explains why so dramatically, because announced QE2 raised the fear about money printing, lower the stigma about making actual purchases of bullion. This increased "physical demand", both newly created and shifted from "paper demand", due to changing social perspectives and has overwhelmed the traditional structure of the COMEX bullion market.

It explains why the price increase has increase irrespective to the general movements in the dollar vis-a-vis other paper currencies and other more illiquid and less egalitarian commodity markets as we witnessed on November 8th

Thus, the thesis as follows. Precious Metal ETFs have absorbed demand for precious metal by creating a large supply of "paper silver". The actual QE2 announcement reduced social stigmas (due to increased fear and stronger rationales) regarding physical bullion purchases to create more "physical demand" (which is what drives bullion prices on the COMEX). This demand for "physical" allocated capital in the more liquid and "popular" markets, which have lower barriers to entry, overwhelming the traditional supply and demand metrics in the market.

Tuesday, November 9, 2010


Desperate measures for desperate times. Like the child that refuses to take their medicine for their pneumonia, we continue to refuse try and get our sugar high instead with QE. Gold continues to explode and is trying to break through a hidden pivot of 1422 today. As talked about on this blog for almost two years Gold and Silver will be monsters that will shock you and now reality is beginning to be evidenced. The carry trade unwind with the yen in 2008 that fueled the global liquidity crises then can easily occur again here in the near future with the dollar carry trade that is now at 4 Trillion a day. It was 2 Trillion a day in 2007. Think there might be a problem? Look for Europe for the first cracks soon.

From the Irish times...

Irish bond yields rose for the tenth day in a row today ahead of EU economic commissioner Olli Rehn’s visit to Dublin.

The risk premium demanded by lenders on Government 10-year bonds rose to 7.87 per cent this evening, a record 5.48 percentage points ahead of the rate paid by Germany.

Last week the spread reached 5.34 per cent, the most since Bloomberg began collecting the data in 1991, before narrowing to 5.2 per cent.

"Irish debt is trading poorly, along with Portugal, and that lends support to bunds," said Peter Schaffrik, head of European rates strategy at Royal Bank of Canada Europe in London. "There are clearly concerns over the current Irish budget, the plan and the political support."

NCB Stockbrokers said it was “increasingly likely" that Ireland would have to seek aid from the European Union-backed rescue fund (EFSF).

"When your sales force doesn't believe it can drum up sufficient demand for Irish bonds at feasible rates, it gives an indication of sentiment," NCB chief economist Brian Devine said today, referring to comments by primary dealers in Irish bonds.

"It is increasingly looking like the European Financial Stability Fund is the most likely scenario."

The Government, which said it needs €15 billion in savings over the next four years, is struggling to convince investors it can reduce its budget deficit and cover the cost of bank bailouts without outside help.

Mr Devine said tapping the EFSF may be a "positive for both the Irish economy and the bond market" as long as the government can retain control of its tax policy, especially its 12.5 per cent corporate tax rate.

However, investment bank Nomura sounded a more upbeat note, suggesting bond yield premiums demanded by investors to hold Irish and Portuguese debt may stabilise.

"This crisis, fuelled by little true news, has entered a new phase and we expect some shorter-term stability," a team of analysts in London wrote in a research report today.

Nevertheless, Greek bonds also rose after prime minister George Papandreou ruled out calling snap election after a first round victory in local elections.

"Bunds are being driven by concerns over the peripherals," said Christoph Rieger, head of fixed-income strategy at Commerzbank AG in Frankfurt.

"The market is focusing on these issues after last week concentrating on the Federal Reserve and its quantitative easing."

German bonds have returned 8.6 per cent this year, compared with an 8.9 per cent gain for US Treasuries, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies.

Greek debt has lost 18 per cent, Irish securities lost 9.9 per cent, while Portuguese bonds lost 7.9 per cent, the indexes show.

The euro fell against the dollar on the back of solid US jobs and renewed concern over euro zone peripheral debt.

With the US Federal Reserve's decision to launch more quantitative easing out of the way, euro zone debt problems seemed to have reappeared on traders' radars.

The euro dropped 0.5 per cent to $1.3953, after triggering stops as it fell through $1.4010 and $1.3990, its low of last Wednesday when the Fed said it would increase its asset purchases.

Some experts said the euro could fall towards $1.3750, having hit a late October low of $1.3756.

Euro/yen selling out of Tokyo was also said to have helped send the single currency lower, which in turn weighed on other currencies against the yen.

Monday, November 8, 2010


The legend and romance surrounding the famed stock plunger Jessie Livermore has long held a fascination among traders. Livermore has become somewhat of a cult in recent years and there are several books that purport to reveal his secrets for making a fortune in the stock market. None of them can hold a candle to the book which Livermore himself commissioned (written by journalist Edwin LeFevre) entitled Reminiscences of a Stock Operator.

This book is essentially an autobiographical account of Livermore’s trading career as told to LeFevre. It chronicles his meteoric career starting with his early days as a small time operator in “bucket shops” and culminating with his heyday as a big Wall Street mover and shaker. Market students have for years combed this book hoping to find the “hidden secret” to Mr. Livermore’s successful career as a speculator but their efforts have largely been in vain. Livermore left no abiding set of rules for consistently beating the stock market. In fact, he himself fell victim to Mr. Market as he won and lost a fortune on more than one occasion. His life and career came to an inglorious end when he killed himself in the cloakroom of a Manhattan hotel at the age of 63.

The fact that Livermore was never able to crack the secret code of the stock market hasn’t stopped his legions of fans from their endless pursuit of the market’s “Holy Grail.” Had they listened to Mr. Livermore himself, however, they would realize that there is no Holy Grail when it comes to forecasting the stock market with consistent accuracy. (Tragically, Livermore himself seems to have forgotten his own advice on occasion).

Yet there is a wealth of wisdom in Mr. Livermore’s autobiography and much of what he wrote some 90 years ago is just as applicable in today’s financial marketplace as it was in his own day. His assessment of human nature and the markets could easily be applied to the recent credit crisis. “Nowhere,” wrote Livermore, “does history indulge in repetitions so often or so uniformly as in Wall Street. When you read contemporary accounts of booms or panics the one thing that strikes you most forcibly is how little either stock speculation or stock speculators today differ from yesterday. The game does not change and neither does human nature.”


Sunday, November 7, 2010


From Analyze .... and I do not disagree overall.

I have some clients in town starting tomorrow, so I am out of pocket, but felt I should leave a post on what to trade in the upcoming week. As you may have noticed, most of the leaders here have overshot, and need a retrace before you could buy them. Friday was essentially dumb money chasing after gains, I had already sidesteped on Thursday. The trend up remains solid, and there is no selloff here period to break the trend. A gift from the gods here is a selloff of -25 SPX, you could go all in on that right here and crush this, there is little chance of that happening, but dare to dream. Over the next several weeks you will hear that there is no way a given position could run, trade to the T/A targets and ignore the noise. I would not go OTM here on future targets, since I expect time consolidation for SPX in most of the hottest sectors. Right now is the game of, "Is this a topping pattern or not?" - it is not a topping pattern, but a pause to rip higher. The max down here on SPX is 1192, but there is low probability that it is attained. The sectors you should target here are coal, miners, tech, smallcaps to midcaps, and selected retailers such as AMZN. I have been spammed over the last couple days from some sites on the great uptrend coming in Uranium, I like the charts, but am not totally on board. CCJ one year chart is interesting if it breaks out, but I am not a fan of early plays on it here. It is easier to go brute force with what is working on retrace. Whenever you have an extreme on SPX that overshoots its prevalent trend (which is where we are right now), the usual play for that is to target backtest support on breakout patterns for the sectors that are ramping. You will notice that this occurred on the miners recently. Despite the chart patterns, the best of the miners/metals are SWC and SLW. Those are both buys on weakness and any gaps gets filled, period. The current perspective on SPX is to expect a consolidation through time phase, with a bottom of 1200 (being pretty generous for downside), and an upside of max 1250. This will continue for several days as the leading sectors consolidate gains, and those not in favor have a dollar drain. Most consolidation phases on SPX in general are to allow for this sector switch, it will turn into range-bound trades on the sectors I mentioned, and breakdown on lower timeframes for other sectors not in vogue, those will appear to be great shorting opportunities for the bears, but they get a short squeeze that dies at intermediate trend extremes. The sector switch will give an appearance of weakness to the trend overall uptrend in general, and the talking heads of CNBC will claim the top is in, no way we go higher with unemployment blah blah. Whenever something like that occurs, you need to trade to lower timeframes in terms of range extremes. In other words, upside do not chase, but buy bottom ranges on hot plays. A green Monday is sidestep, wait for a downdraft and load your favorites on daily range support backtests. My current target on SPX is 200 points up from here, and I keep that perspective until something happens to prove me wrong. GL

Saturday, November 6, 2010


Reuters) - Federal Reserve Chairman Ben Bernanke on Friday defended the U.S. central bank's bond-buying against beggar-thy-neighbor criticism, saying it was "critical" for global stability that the U.S. economy regain its strength.

Doing so, he suggested, would bolster a dollar whose weakness has sparked cries of foul from Bogota to Beijing.

The U.S. central bank's decision to buy $600 billion of government debt has drawn scathing comments from a host of nations who contend it is generating global instability by ramping up their currencies against the dollar, inflating asset bubbles and stoking inflation in their economies.

"With all due respect, U.S. policy is clueless," German Finance Minister Wolfgang Schaeuble said in Berlin.

Bernanke, answering questions from college students, stressed that Fed policies aimed at giving a boost to the weak U.S. recovery would pay dividends around the world.

"I think it's important to emphasize ... that a strong U.S. economy, a recovering economy, is critical, not just for Americans but it's also critical for the global recovery," Bernanke said.

The Fed's easy monetary policy, ramped up on Wednesday with the new bond-buying plan, has rankled, especially among emerging market economies and it looks set to be a bone of contention at a G20 summit in Seoul next week.

South African Finance Minister Pravin Gordhan said Fed policy "undermines the spirit of multilateral cooperation" that the G20 had sought to achieve. The money will find its way into financial markets of emerging nations with potentially devastating impact on their exports, he charged.

Bernanke said U.S. policymakers were fully aware of the dollar's importance in the global economy as a reserve currency. The dollar has weakened sharply and did so again after this week's decision on a new round of so-called quantitative easing.

"The best fundamentals for the dollar will come when the economy is growing strongly," Bernanke said. "That's where the fundamentals come from."

He told the students that while commodity prices have risen sharply, they were the exception amid generally muted prices for other products and should not cause a serious problem.

Bernanke said there was ample slack in the U.S. economy that will prevent producers from being able to fully price costlier commodities into finished products that consumers buy.

He added that once inflation pressures become visible, the U.S. central bank will be ready to modify its current stance of accommodative monetary policy to block inflation. Official interest rates have been near zero for nearly two years.

For the moment, inflation expectations appear to be quite low, Bernanke said, adding the Fed was committed to keeping them that way and expressing confidence it had the tools to do so.

Friday, November 5, 2010


While investors sit idly by, waiting for any confirmation in direction of Fed policy-making, a much larger issue is being critically overlooked. That issue, of course, is negative real interest rates.

Negative Real Interest Rates

Negative real interest rates occur when the rate of inflation is greater than the cost to borrow. Therefore, if inflation was 5% and the cost to borrow is only 4%, one could effectively earn 1% per year in purchasing power, pending they could purchase an asset that tightly tracked the rate of inflation.

Insert precious metals. Since precious metals have tracked inflation since nearly forever, they've become a staple in the negative real interest trade. Investors can afford to leverage up, buy hordes of precious metals, and simply sit in wait while their metals appreciate at 5% per year (example inflation rate) and their debt grows by just 4% (also an example). While this 1% real return won't make anyone a purchasing power billionaire, leveraging will.

The average American who wants to buy a new home might find acquiring capital a labor intensive process, but on Wall Street, easy credit is also available. Simply opening a new trading account entitles most to margin, and traders have little problem accessing leveraged lines for carry trades like gold. Therefore, going forward, we should expect little in the way of big investors seeking nominal and adjusted profits in a negative interest rate trade. Just like the carry trade ultimately broke several currency pairs, it'll break the price of metals – and for the better!

When opportunity is spotted in arbitraging rates, volume and interest explode. Where only a few people would play gold without leverage, a number of speculative investors will be willing to leverage to infinity to buy as much gold as they can.

However, while the supply of paper and credit to buy all the gold imaginable is there, the gold isn't. The supplies are still horribly low, and any increased interest will go directly to the bottom line. What happens when you add more customers to an already sold out store? Extreme prices.

Quantitative Easing is Icing on the Cake

At this point, any quantitative easing from the Federal Reserve is merely icing on the cake and nothing more. Negative real rates, with or without any moves by the Fed, will persist until rates, not the supply of money, rise. Inflation, of course, would rise with quantitative easing, but with so much money on reserve, and so little being lent, there's still plenty of time for higher inflation and lower interest rates.

The market has taken future quantitative easing to mean higher gold and silver prices, and that without quantitative easing, prices will simply stagnate. This, of course, couldn't be further from the truth. We're sitting atop record low money multiples, microscopic interest rates, higher inflation rates and plenty of incentives for leveraged investors to start picking up physical assets.

It does not matter what number Ben Bernanke ultimately decides will be required to bring the economy back to life. The only numbers that matter are his already $1 trillion-plus quantitative easing and negative interest rates.

Dr. Jeffrey Lewis


Thursday, November 4, 2010


Never trust his conclusions. As Joe has repeatedly made clear.....he is employed by the puppet masters to divert attention from them. The real bankers that control it all. I love how they use elements of truth....THEY ARE OBVIOUS TO EVERYONE....and then Beck transfers the sheeple's attention to Soros and unions.....If it weren't so sad it would be funny. ITS THE PROGRESSIVES doing it to us says Beck. No Glenn sorry. You are just another tool for obfuscation. Try the Banking Cabal. It goes back Centuries ....they are NOT progressives. They have started all the wars that you support wholeheartedly. Good luck Glenn....you got your premise right....you missed who's stealing it.


update I.....Insanity....Money is free .......


Wednesday, November 3, 2010


I have missed the last move in PMs completely except for gaily gap trades in the miners.....so I won't chase the PM miners here. If one is going to look at these technically coupled with the current threats of massive QE then if you are holding a core I would have to believe you are right in doing so. I am not. I could be waiting for a pullback a long time. LOL... Anyway here is a nice read for those holding.

CFTC Silver Revelations
Last week we had Silver shocking news from the Commodities Futures Trading Commission (CFTC) that silver futures pricing may have been manipulated:

I do believe that there have been repeated attempts to influence prices in the silver markets,” Mr Chilton said on Tuesday at a meeting in Washington. “There have been fraudulent efforts to persuade and what I consider deviously control that price.

With this news and revelations being priced into the markets, Silver appears poised for a new movement upwards. The author reviews the silver price and the status of his Six Silver Stocks recommendation made on September 17th, 2010.


Tuesday, November 2, 2010


Erstwhile reporter F2K gave an eyewitness report to D.C rally ........

I attended the Restore Sanity Rally in DC this past weekend, and want to share my observations with the board. In particular, I want to give my first-hand account of the event, since both sides of the media and political spectrums are avoiding coverage of the rally like it was political Kryptonite (and for them, it IS!).

Both parties are terrified by what they saw at the Stewart-Colbert rally. Instead of the anger and fear they have worked so hard to cultivate, the media and the politicians found widespread REJECTION - of their culture of hate and fear, of justice and law for sale to the highest bidder, and of the perpetual political shell game and the tyranny of false choice offered up to them at every election cycle (Brilliant phrase, Willsin - start making the T-shirts and buttons!). To a much larger degree than I expected, this event went beyond bi-partisanship, into a strange new land of NON-partisanship.

The rally was the most significant non-covered event of my lifetime. The happy, well-behaved crowd stretched from the Capitol building in the east to beyond the Washington Monument in the west, and every side street was jammed at least 1 block deep. My brother, a resident of Fairfax VA and a bona-fide BeltWay Bandit/Washington insider for more than 15 years, has seen a multitude of events on the National Mall, and said this was the largest gathering by far that he has ever witnessed. His crowd estimate: 250,000 to 300,000.

I expected some shocked reactions to my sign ( "Bestiality! Dumbos + Axxes + Cash: Congress With Animals Is Perverted"). Instead, I found cheers, thumbs-ups, and people forming queues to get close enough to take pictures of it (and me). I went in character, as a Vietnam veteran in fatigues, and received more "Thank You's" for my service than I had in the preceding 35+ years.

Those voters who are stuck in the partisan prison of "Either/Or" need to seriously expand their thinking to include "Other", or they will be left out of the new political landscape that is emerging in this country. The rally made this Vietnam veteran more hopeful about the future of my country than anything since the anti-war protests of 1969. As Bob Dylan sang so long ago"
"....The Order is rapidly changing,
and you better start swimmin',
or you'll sink like a stone
For the Times, they are a-changing".

Thanks Fish.......

DROKE update I

The stock market has always been a dynamic affair but until the turn of the century 10 years ago, there were always a few tried-and-true relationships you could always count on. For instance, in the 20th century it was almost always true that if the broad market as reflected by the Dow or the S&P was rallying and the gold and oil stocks were also rallying, the rise in the broad market was viewed as suspect and in most cases would soon reverse. It was said that “What’s good for gold/oil is bad for stocks.” Then along came the bull market of 2003-2007, which completely blew that relationship out of the water.

There was also a long cherished market bromide that if the S&P was rising while the semiconductors weren’t, the S&P rally should be viewed with extreme suspicion. And for the most part the semiconductors had to confirm a broad market rally lest the market was more or less on weak legs. But then along came the rally of late 2004-2005, following the 10-year cycle bottom of ’04 and once again another long-held truism was disproved as the S&P continued to rally without any help from the semiconductor stocks.

More recently another market truism has seemingly been destroyed, namely the relationship between the financial stocks and the S&P. It has always been said that if the stock market rallies for any length of time without participation from the bank stocks, the rally is almost certainly doomed to failure. This has been one of the longest and most firmly cherished market belief – and one that has rarely been wrong. Well once again we’re seeing that the old saying, “Nothing is as constant as change,” is coming to pass before our eyes.

In recent years we’ve talked about how many of the old stock market relationships and indicators that were true in the 20th century are no longer true in the 21st. What has been responsible for these changing relationships in recent years? The changes have largely been brought about by the forces of globalization. As the stronger, burgeoning B.R.I.C. countries (Brazil, Russia, India, China) flex their economic muscles and expand their industrial bases, the former leaders of the Western hemisphere have entered a long wave decline. This decline is attributable to demographic factors as well as major shifts in levels of industrial manufacturing. These changes can be summarized by the Kress series of long-term cycles, most of which are in the down phase for the U.S.

China, India, and the emerging market countries are operating with an entirely different series of long-term cycles and because of the reticular connections the U.S. enjoys with these countries the long wave upswing these countries are in the midst of will help in some measure to mitigate our country’s long wave demographic/economic downswing. This is one reason behind the crossing currents in the financial markets since any appearance of weakness (as with the 2008 credit crisis) tends to be mitigated by the upward currents in the emerging countries.

These crossing currents have also made financial forecasting a much more difficult endeavor than it was in the 20th century. With so many more global variables added to the mix, it’s difficult sometimes to get a decisive reading on where the markets are headed in the longer-term outlook. The forecast isn’t as cut-and-dried as it would be without the element of a highly integrated global economy. This is also why many of the market “truisms” of years past are no longer reliable.

Our strategy in recent years has been to focus more on the short-term outlook and let the longer-term market picture take care of itself. As the old saying goes, “Take care of the short-term and the long-term will follow.” The advent of the Exchange Traded Fund (ETF) has also made it easier to follow a wide array of foreign and domestic markets and affords investors with a truly global macro view of the markets. The Emerging Market ETF (EEM) is of tremendous value all by itself as showing us where the most important global markets are headed. This particular ETF has also been of tremendous value in leading and/or confirming the S&P 500 Index and has seemingly supplanted the old Dow Jones Transportation Average (DJTA) as the quintessential “Dow Theory” confirmation indicator.

While many of the old market relationships we talked about may no longer hold true, one that still does hold some validity is the relationship between the tech stocks and the rest of the broad market. It’s interesting to note that the NASDAQ 100 Index (NDX) has recovered to a new high since the May “flash crash” while the other major indices, including the benchmark SPX, haven’t yet made a full recovery. The higher high recently made in the NDX should be viewed as a leading indicator for the broad market and is a positive sign that the recovery rally hasn’t run its course on an interim basis.

The fact that tech stocks have been the big winners this year is a major clue that any recovery in the jobless rate (see section below) will most likely come from the tech sector. As we saw in the previous commentary, the market hasn’t finished flushing out all of its near term internal weakness. By later this quarter, however, the market should be firing on all cylinders again as we head into 2011, a year that holds out the promise of being perhaps the last bull market year before the 60-year Kress cycle bottoms in 2014.

Employment Outlook

Probably the number one hot button issue of this election season has been the high level of unemployment. With the jobless rate hovering around 10 percent, pundits have focused on the fact that this is one of the longest high-unemployment rate trends in memory.

There is little in the way of optimism that this trend will reverse anytime soon. According to data provided by the Bureau of Labor Statistics, a record 30 percent, or 4.4 million, of the nation’s 14.7 million unemployed workers were out of work at least a year in August, up from 23 percent in December. As USA Today put it in a recent article, “A hefty share of the long-term unemployed – 71 percent – were out of work at least a year in August, up from 48 percent a year earlier.”

Temporary U.S. employment is showing signs of improvement, although experts agree that temporary work is no substitute for long-term employment. At this point, however, even temporary work is better than none at all. As we’re heading into the holiday season, we can expect to see an even bigger surge in temporary employment and the leading indicators are forecasting an increase in temp jobs.

One of the most useful benchmarks for gauging the strength or weakness in the labor market is Monster Worldwide (MWW). The stock price of MWW has proven to be a leading indicator for the rate of change in the employment rate in the short-to-intermediate-term outlook. All year long Monster’s stock price has languished in a downward sloping trading range, hitting a 52-week low as recently as August. Monster’s stock price slowly turned around in September and on Friday, Oct. 29, Monster’s stock price shot up an incredible 20% on an earnings-related announcement. Granted the stock has only just recovered its losses since the May “flash crash” but it’s nearing a 2-year high. Monster executives foresee improvement in job bookings, particularly for tech-related jobs, and the stock price is reflecting this.

Monster is also a component of the New Economy Index (NEI), which measures the intermediate-term (6-9 month) strength in the U.S. economy. The latest rally in Monster helped push the NEI to its highest level in over three years. This is a positive omen for the intermediate-term economic outlook. It also suggests the upcoming holiday retail sales season should be a consensus-beating one.

Now contrast the recent strength in Monster Worldwide with that of another leading employment stock, 51job.com (JOBS). JOBS is basically the equivalent of Monster Worldwide for China’s job market. If you want to know what the employment situation is like for China, just look at the stock chart for JOBS. Here’s what the 3-year price history of JOBS looks like.

As you can see, the U.S. employment outlook is inferior to that that of China, which fits with the assessment we made earlier in this commentary. While the U.S. jobs outlook is improving, it has much room for improvement compared to that of China’s healthier job market outlook.

Silver ETF

The iShares Silver Trust ETF (SLV) temporary succumbed to the selling pressure that had plagued the gold ETF and gold stocks a couple of weeks ago. SLV pulled back sharply on Oct. 21 at the same time that a Barron’s article appeared containing the headline, “Hi-Ho Silver! The White Metal’s Riding High.” This gave a clear indication of the inflated expectations on the white metal in the near term and the enthusiasm was duly corrected. While the article was hardly exuberant in its tone, it was optimistic enough to put a damper on the silver price, temporarily, from a contrarian standpoint.

Silver and the silver ETF have since shown relative strength versus the gold market and on Friday, Oct. 29, SLV closed to a new recovery high. SLV has remained above one of its most important short-term trend lines since the rally began in August, a testament to the strength of the uptrend.


update I...


Monday, November 1, 2010


I believe that silver is due for a correction. If you’ve read any of my articles this week, you’ve heard me talk about Ben Bernanke and the upcoming Federal Open Market Committee (FOMC) meeting where he will announce the next round of Quantitative Easing.

Ben’s announcement could strengthen the dollar, which would be bearish for all commodities, not just silver. As I said, silver is due for a correction. Bernanke’s announcement could be a catalyst for silver prices to drop 5-10% in the short term.

That would create an excellent buying opportunity for people like me, who are long term bullish on silver.

I’ll be bullish on silver as long as the Federal Government keeps interest rates absurdly low, and as long as huge amounts of government debt is the only realistic option to keep paying for all the bells and whistles that politicians promise voters and constituents.

But there’s an additional wrinkle in the silver story that I think could give silver an additional, long-term boost...

For years and years, silver prognosticators and analysts have talked about silver price manipulation. In short, the long-running conspiracy theory is that a handful of global banks have placed massive short-side bets in order to manipulate the price of silver.

Well, it’s not a conspiracy theory anymore.

According to a recent story in Bloomberg,

At a hearing in Washington on Oct. 27, CFTC Commissioner Bart Chilton said there have been ‘fraudulent efforts to persuade and deviously control’ silver prices and that violators should be prosecuted.

If you’re not familiar with the Commodity Futures Trade Commission, they’re the Federal Government body in charge of regulating and monitoring all commodity futures transactions on exchanges in the United States.

They run a pretty tight ship, so it will be surprising if they let any of the offending parties in this manipulation scandal off the hook easily. So what’s the upside for manipulating silver futures contracts?

It’s a little complicated, but these banks were placing phantom or “spoof” orders on silver contracts with the intention of skewing prices of options contracts.

The effect, allegedly, is that these spoof orders made some options worthless while boosting the value of other options.

In any event, these “spoof” orders had the supposed consequence of keeping silver prices artificially low.

In light of the announcement from the CFTC that they believe the price has been manipulated, I think we can see an additional boost as short-side orders are either cancelled and/or filled by the offending parties.

When you take a short side bet and you’re wrong, when the options contract expires, you have to buy the security at current prices. The additional volume usually spikes the price further to the upside.

Now that the CFTC is on the case, I’ll expect silver to continue to make new highs.

It still has quite a bit further to go before it hits inflation adjusted highs - but as I’ve been saying: wait for Bernanke’s announcement next week to add to or build a position in silver.


update I strap in for this one.....