Wednesday, June 8, 2011

BERNANKE'S NEXT MOVE


If you listened to Ben's speech yesterday something jumped out that I thought was very telling. Why would Ben spend an enormous part of his speech giving a primer on the costs of essentials. It was bizarre to listen to him go out of his way explaining how the costs of essentials like metals and oil were becoming more expensive due to the demand side of the equation. He even went into the costs of food. Making a case that the demand of food by the ever increasing dietary demands of our emerging markets around the world. Is he right? Of course....at least to some extent the price of these essentials is due to demand. The question is really WHAT PERCENTAGE OF THEIR COST RISE is due to demand. Ben then went into a very bizzare defense of his policy by making a dollar devaluation explanation. Pardon my numbers but I'll take the liberty here of my memory. He used the percentage of devaluation of the dollar (around 16% was his number) and then compared the percentage of rise in some of these commodities. Many up 100%. Then he dismissed their rise with an apple to apple comparison of these two percentages. SERIOUSLY!!. Do you really think we are that stupid??? Wait..don't answer that. Of course he does. And he's right. We are. At least the majority of the sheeop are.

Let's get to the point of this. First his money printing is the issue and IT is what is rolling into these commodity markets and inflating their prices to this percentage. The actual demand of many of these commodities is actually DOWN. Oil demand has been dropping for months but the price has been tripple digits. All hard commodities are down but the prices are higher....maintained by the mad money.

Ben's bizzarre comparison of saying the dollar is down a few percentile and these commodities are up over a hundred percent means it cannot be his policy of easy money and monetization. Something ELSE is the cause. This is clearly setting the stage for another round of QE. It may have a new name but its coming. There will be no choice except immediate depression THIS YEAR. He knows it too. And folks its coming fast. Just watch what happens if he delays this into September. It will get bloody fast. Ben has no tools other than money printing and he WILL print. State and local municipalities need money and they will also start firing people like crazy this summer. Its going to spiral fast. CONfidence can evaporate overnight so you cannot let this go to long. Ben knows this. Let's watch how long he sits on the sideline. I bet it won't be too long.


See if the guy below sounds familiar......

95 comments:

  1. HNR on huge support if it goes down here....its to 7... isay it bounces.....

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  2. Jesse is playing the hedges short miners long the metal

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  3. Looks like EXK is going to 8.
    Maybe a bounce there??
    Looks like support would be strong.

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  4. patience patience tryin dime trades here......hehehhe

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  5. look at oil.....ooooooboy thats gonna hurt..

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  6. I emailed a question to CFO of CFW regarding their 10Q here is his answer His name is Ricketts

    As stated in our 10-Q dated 3/31/11 – Footnote 2 summarizes are efforts to resolve our liquidity issues. As you see in the cashflow statement, we have generated cash from operations of $2.1 million during the 9 months ended 3/31/11, which is an improvement of $3.2 million compared to the prior year. We have reduced operating expenses such as G&A and lease operating expenses. We are seeking a solution that works best for both our lenders and shareholders.

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  7. impressive gang rape of miners.......you know what they say ....if there's blood in the street........

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  8. Bought EXK @ 8.08.
    I sold my CYCC at a loss. Oh well...

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  9. maybe blood in the miners, but unless it is just a trade, I am waiting for lower.

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  10. or to use another saying....try to catch a falling knife..

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  11. or.....anticipate the cross, anticipate the loss.....ok, I'm done :)

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  12. Anything I'm buying in the miners here is a trade.......in fact its all a trade....hehehhe......btw the whole core is looking like a pinatta.......EUO not bad......HNR tryin ta bounce

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  13. they definitely want the lil guy out of the miner trade....

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  14. You are so right about the head count reduction at state and local governments. The last employment # was just a preview. Keep in mind up to 10,000 boomers (first wave) are hitting retirement age a day. That is 300k a month or 3.6 million a year. Within my circle of acquaintances I'd say at least half of these are retiring (say 1.8 million a year), yet the unemployment rate remains high (and jobs scarce). So the employment/unemployment #s don't begin to tell how bad things really are.

    Watching HL and DCTH for a scalp....

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  15. CSLN has seen strength. only have 1/4th of my original buy. RNN has been holding strong in the mid 1.20's. Got CIEN for a $ this morning...scalping is so much easier than swinging in this market.

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  16. Top of the morning ladies and gents....NOG is on my radar......CFW slowly getting out of bed....Joe whats for dinner in the woodshed???

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  17. Ken....really like RNN...DR. AHN the man behind the wheel at RNN has been buying many shares as of late....
    May 18, 2011 AHN CHANG HO
    Officer 1,008,078 Direct Purchase at $1.31 per share. 1,320,582
    Apr 1, 2011 AHN CHANG HO
    Officer 320,846 Direct Purchase at $1.22 per share. 391,432
    Dec 14, 2010 AHN CHANG HO
    Officer 510,000 Direct Disposition (Non Open Market) at $0 per share. N/

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  18. KLI I know you really dont like the BIO but something is brewing...your thoughts???

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  19. DNN and CXZ hitting bottoms...might be an interesting play.....

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  20. that is why I have been watching and holding RNN. I own some now. Not sure about adding.

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  21. llen is getting real cheap, but I don't see a clear bottom.

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  22. Ken......If you dabble in the BIO's then take a look at OPXA...trading at 1.62 now with a target of $6.50
    http://finance.yahoo.com/news/Vista-Partners-Updates-prnews-3567119969.html?x=0&.v=1

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  23. Since I am in a negative market mood. OPXA looks great at 1.30 or at a pull back from a break over 2.10ish. I just don't see support here.

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  24. brian,

    Been shorting ORS, DCTH , SLW, EXK and this morning shorted LDK at 6.90 for scalp.

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  25. Days like today are excellent for shorting 6 or 7 stocks, that way money is spread across different stocks and do not have to wait for big short, combination of stocks and down turn in each one adds up and makes it one big short for the day.

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  26. Bleed FCEL, bleed, kli wants it cheap, heheeeeeee!

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  27. Joe, please be kind enough to let us know when you've stopped shorting the miners...esp. slw, exk, pzg...thanks! Kli, excellent comments per usual and I'm betting on early Aug. will be the longest BB can hold out w/o proclaiming "help is on the way"...but what do I know...my next-dr. neighbor is Greek, has Greek TV and we are NOT being told how bad it is.

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  28. Sister.....I know what your saying...sometimes JOE pulls out the knife on a stock we are into and we begin the pucker a little and hold our breath wondering...where the hell is the bottome going to be...However on the flip side if your nice and ask him for a stock your interested in he will get it low enough for you...I am sure you know but as KLI says...its a game just be nice to the pit bosses...

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  29. Nancy,

    I like DEFLATION not inflation, heheeeeeeeeee!

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  30. I would think to much damage to confidence if they wait until august... Of course the let oil get as high as it did this spring, so who knows.

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  31. Brian,

    I simply react to the market, it's nothing personal, that's what seasoned traders are supposed to do, capability to play both side of the coin without emotion or bias.

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  32. Ken,

    Central bankers are in the point of no return, the actual FUNDAMENTALs of economy, debt and all the good stuff is starting to show it's ugly face in the market as well regardless of any further stimulation, stay sharp and follow the actual market not the so-called ANAL YSTs.

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  33. http://www.zerohedge.com/article/guest-post-death-debt

    interesting read.

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  34. SPY looking to squeeze up here

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  35. Hey Joe,

    Just curious. Did you cover your EXK short, or holding until closer to 200 day ma?

    Thanks. Bill

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  36. Doctrader,

    I did not short EXK at 52 week high which means this one for me was short big scoop heavy at 9, cover when I see the live tape turning for cover which means this one is daily. SLW was the one that was short and hold at 46 for me, covered and shorted again yesterday. You need to be careful even if I cover my shorts since GS, JPM can short further.

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  37. Check out the RSI on LLEN. Short squeeze coming? If and I know its a big if this company is legit, this puppy is going to pop one day soon.

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  38. Joe couldnt agree with ya more...never have emotion in this market nor would I ever bet against you and KLI...actually surprised my buddy chuck went sideways on the RXII trade 2 days ago...

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  39. Brian & Kli,

    Now you owe me that drink since the gap in FCEL is almost covered, tha gap was at 1.47, now it's 1.48.

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  40. watta beatdown of the miners.....hehheheh....i could laugh more if my ass didn't hurt so much....joe warned me not to dabble in the miners hehehehhe

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  41. Joe,
    Thank You sir my 1.50's got filled today :) Not that I want to push my luck but are you still looking for the $1.00 you mentioned the other day? Or you are finished waterboarding fcel. Hehehe

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  42. Nancy are you implying the news is being "manipulated"....hehhehe.....gotta keep th sheep in the field eating their grass

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  43. $1.14.......on it and this week please

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  44. What a classic release of "crisis" news on CNBS......man do they want to knock the hell out of commodities and especially the arch nemesis...PM miners....next on the list GOLD ....should get that with a big dollar strengthening move.....IF we get that then the coup de gras

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  45. Red are you nibbling on the miners yet

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  46. GRH hitting the crosses.
    http://finance.yahoo.com/echarts?s=GRH+Interactive#symbol=grh;range=1y;compare=;indicator=sma(50,100,200)+volume;charttype=candlestick;crosshair=on;ohlcvalues=0;logscale=off;source=;

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  47. Tom,

    I am done shorting FCEL, promised KLI to fill the gap which it did, now I will watch the tape to get an entry to go long which means I hope it's taken down further.

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  48. Brian,

    Another good short so far is TKLC at 9.

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  49. Nancy,

    I warned you guys way ahead of time about miners and kli just mentioned what I said before.

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  50. Joe, when I look for entries, I look at stochastic crosses, MACD (seems late but reliable), volume and general chart patterns. You have written sever times that you look at the "tape". Does this mean that you are looking for specific market makers to start covering, or am I missing something?

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  51. WOW.......WTF happened to TKLC? The meat clever was sharpened on that one....Dinner is served!

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  52. Will 33.08 hold on GDXJ......if it doesn't???? baboom...

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  53. exk covering some shorts here....lets see some buying

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  54. Ken,

    I look at the technical charts which you also do but since I do real time trading I look at the flow of money whether it's accumulation, distribution and that means MMs, and big boyz flow coming in and I also pay attention to volume. Level II info is child's play, I am talking Level III and higher. I also use experience thru behavoral analysis of how the money is flowing and that experience I gain thru 36 yrs of investing/trading in the market.

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  55. Famous frank oz quote Always two there are, a master and an apprentice.”
    Teach us master vader and master yoda....

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  56. Also.....“Clear your mind must be, if you are to discover the real villains behind this plot.”

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  57. look at that stop shopping.....hehhehe......no easy trades here.....NOT IN MY CASINO!!!!!

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  58. When I traded 10 years ago, level II seemed to help, I haven't found anything useful on it since I started back up this year. I have an "instaquote / cobraIQ" platform and would love to get better information about accumulation and distribution, but have yet to figure out how to see it. I try to look at execution volume on buy vs ask, but that is tough.

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  59. As an alternative to not having the data you have, I try to look at buy/sell fading and 2nd tier movements. I combine that with the indicators for plays....but I am pretty much self taught on this stuff.

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  60. EXK big HnS on the daily......holy chit right on the neck line.....oooooooboy could get ugly

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  61. Man the boys are beating the snot out of just bout everything today! What to do, What to do? Not @ PC........ blue light on yet or do we go down a few more floors!

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  62. Ken,

    The key success when it's all said and done is the capability to think and react like big boyz without being them, just like capability to understand other languages, cultures, and different ways of life without being from that particular place. Not many can accomplish it, it requires many yrs of dedication.

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  63. kli,

    "EXK big HnS on the daily......holy chit right on the neck line.....oooooooboy could get ugly "

    MUSIC to my ear buddy!

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  64. If you break the neckline then 5.52

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  65. kli,

    I smell FEAR, heheeeeeeee!

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  66. you smell mucho fear .........but is it enough for short term capitulation....

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  67. only chart I see that looks good is EUO

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  68. kli,

    When you start capitulating then it will be time to go long just enough to get you back in again and then take you for another round of puking, heheeeeeeeeee!

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  69. And this capitulation swing trading stuff is why I have gone back to what I have confidence in; day trade scalping. 6 of 8 green today and 3% increase in equity.

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  70. Tom might play the bounce but should get another week of selling

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  71. look at GORO......Morla......that thing is headed to 22

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  72. 8% beatdown on portfolio in just 5 days

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  73. Waiting for the puke short term capitulation, if I wanted to play the bounce. With biggest bang for the casino speculation day trade being beaten down Chinese stocks like LDK or PZG more miners.

    During a good puke when liquidity dries up you get to name your price. Approximately 1275 is the minimum, 1165 (weekly 200 wma) is the bad case before a bounce, 1095 is the worse case to justify another intense round of QE3. A little fear to repeat the wash and rinse cycle.

    Remember puking is good helps clear the stomache so you can go and gorge yourself some more.

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  74. CRYP up 4 cents today on low volume and has remained solid despite the market's selloff. Something has to be going on there.

    Good point on the HnS on EXK. I will probably protect with some PUTs tomorrow.

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  75. Kli,

    any idea's when its safe add into the core miners? the weekly chart on EGO still looks like it could go a ways down.

    to anyone that owns CRYP, it held strong and finished green again. its slowly moving close to that $2.00 level.

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  76. Rude....$HUI shows first good support at 440 level...thats another 11% down from here. It won't be a straight line so you should be getting some bounce trades if you are a knife catcher. Todays action was VERY bearish.....which means we might catch a bounce here then another couple a legs down. Holding a core and a lot of cash for the next leg down with the MACDs bottoming..may be the smart move. From a fundamental view its all about QE or "more monetization".....without that its to the bottom and its DEPRESSION.

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  77. The big boyz are shorting the miners and the hedges not in the "club" are selling their winners (miners) to cover their margin calls. Thats why the darlings are getting killed...when the big boyz cover you'll get the sign......green reversal on big volume.....could be a ways off though.....weeks maybe months....Ben may have to step in though quick to prevent a liquidity crisis.....this is very tricky territory....like I said INSTANT DEPRESSION

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  78. Carter Wurth on CNBS says we get a bounce here........on CRB hugging the 150ma......We'll see I guess

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  79. short term bottom 2-3 PM tomorrow?

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  80. Yeah GORO could continue down some. What I've got left of that is just a core anyway so I'm not sweating it. Taking a beating in CSUN, hoping that stock runs out of weak hands soon.. PURE still looks healthy for now IMO, if it turns soon that'll be a higher low.

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  81. a couple of crazy moves in the futures, i wonder if a Bernake stick save is in the works

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  82. Joe said "capability to think and react like big boyz without being them".
    Would love find one of these "big boyz" and learn from them in person someday.

    This is tough. I struggle with this every day. Some things I can see clearly in hindsight, like when they released silver to go from 40 to 50. Some are much harder to understand.

    I know they like to let good things get cheap so the can accumulate.
    I know they can use pair trading to sweep something down or up in price.
    I know they like to push things in both directions to panic/margin people out of positions.

    I now look at moves that the miners are taking right now and hear the idea that they want to push the price down so they can get them cheaper and remove us from the trade.
    It makes more sense to me that the price failure of the miners is due to overall market decline plus pair trading with silver. These two combined equal the move down we see. If this is the case, then they anticipate the price of silver coming down hard in the near future. Which implies to me that we are seeing April/May repeat itself, but at a lower level and with less movement upward of silver. Looks like the prices will need to reset at a lower level. Of course I could be wrong, but I see the same thing I saw 6 weeks ago, I am now going to act differently to stay sane and protect what assets I have left.
    Cash until I see a clear signal.
    I believe we are not seeing just a contrived market dump right now, I believe that massive over leverage will start causing forced selling very quickly and fundamentals (poor earnings) we pulverize the market even more. Real damage was done 2nd quarter. I'm not sure what QE3 will be able to do. Throwing money into the market for companies that are showing losses?.......hmmm.
    so we watch the market crash and pull down the good with the bad, when QE3 is ready, we buy the miners since the are actually making money 2nd quarter. Looks like we wait for a QE3 announcement to buy.
    Just my thoughts

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  83. Excellent thoughts....just to parse words a bit with you...your scenario is STILL contrived....contrived is not defined as a "mild" correction.....2008 was "contrived" also.....it was not a mild correction...in fact it was quite horrid

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  84. perhaps I meant "controlled" instead of "contrived. I think this crash, like in 2008, is where control has been lost. They may try to manage it, but they do not control it.

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  85. at what point would you say they do not control it and are simply riding the beast?

    Did they control oil when it went so high this spring? or did they lose control?

    It looks to me like underlying fundamentals are going to remove some of the control.

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  86. HK -
    Soil samples from around Fukushima Prefecture have revealed concentrations of radioactive strontium.
    Japan's science ministry conducted a survey for radioactive substances at 11 locations in 10 municipalities from late March to mid-May.
    It says strontium-90 was detected in all 11 locations.
    In Namie Town, the reading stood at 250 becquerels per kilogram of soil, while in Iitate Village the reading was 120 becquerels per kilogram. The readings in the other locations were between 2 and 18 becquerels.
    Strontium-90 is generated during the fission of uranium in fuel rods in reactors.
    With a comparatively long half-life of 29 years, the radioactive substance poses a risk of accumulating in the bones if inhaled, because its properties are similar to those of calcium. If this happens, it could cause cancer.
    The ministry says the survey revealed that strontium was detected even in the city of Fukushima about 60 kilometers from the plant, suggesting wide-spread contamination.
    It says higher doses of strontium were spread northwestward from the plant, along with other radioactive substances, because of the prevailing winds.
    The Nuclear Safety Commission says the detected doses of strontium were minimal, compared with those of cesium found in the region. It says the substance does not pose any immediate health threat.
    Doctor Osamu Saito is a radiation expert at a hospital in Fukushima City. He says even though only small quantities of strontium-90 were detected in the survey, it still poses a high health risk because it can accumulate in the bones.
    He is urging the government to increase the number of observation points throughout the prefecture, so as to help ease public anxiety.
    The ministry says it is considering taking samples from additional locations in the next survey.
    Thursday, June 09, 2011 06:02 +0900 (JST)

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  87. Control was not lost in 2008, if anything they have more control since 2008 than they did before. In 2007 it was every corporation for himself, fighting and leveraging for a bigger slice of the bubble plunder with no regulation or oversight at all. White collar anarchy. The "central plan" in those days for every manner of participant was "I me mine".

    http://www.youtube.com/watch?v=8pFCPTYq5Tc

    It's nowadays that they've come to their senses, they realize that if they don't find a way to plunder the Earth's resources in a more orderly manner soon there will be nothing left to strip from the middle and lower classes, whereupon many countries not accustomed to such oppression could opt for the pitchfork solution.

    Can it be done without war (on the soil of 1st/2nd world nations), a breakdown of social order (in 1st/2nd world nations), or a rise of fascism (in 1st world nations)? There's the rub for you, the interests of the powers could become mutually exclusive at some point and then bad things could happen. Their interests have already become mutually exclusive with the interest of the plebs, lucky for them we're a disorganized and easily distracted lot who pose them no real obstacle.

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  88. Regardless of how they proceed what has been taken from the public will not be returned. No real economic recovery will happen because the bubble was a lie in the first place. That kool-aid was the only thing they ever planned on giving us without strings attached. All we can hope is that they decide to screw China and Europe before they screw us.

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  89. And when I say screw China I mean their economic leadership, clearly the Chinese people as a whole are already suffering vastly more than any unemployed Greek garbageman.

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