Friday, August 19, 2011

I THOUGHT THEY HAD MY BACK


Where is the Bernanke put? Maybe all of those doom and gloom nut jobs on their blogs were right. Maybe we are headed into a depression.

I'm certain those thoughts are entering the mind of many Wall Street traders that have the economic experience that can fit on the end of a thimble. The past three weeks have been a severe blow to the extend and pretend crowd. Can they turn it around again? In short.....no. Can they squeeze the shorts until their gonads begin to pop out of their ears. ABSOLUTELY and don't you forget it. Will they? 100% guaranteed.

This is the part that tests your thesis and your ability to understand the global economic structure and the mechanics of the market structure. In other words you better have been paying close attention to the political and economic lessons that have been discussed here over the past two years. Joe, Red, and many others here have a knowledge of the participants in the mechanics that make the wheels turn and if you have tried to follow their comments and the posts you will be better equipped to get through the coming Kondratieff Winter than most.

Most sheeple are still wondering how to pay down their debt AND buy a new hot tub. They really have no clue what the coming storm is about to bring. Of course some have a feeling of impending doom or vague fear of losing their job. Other than what the MSM feeds them they cannot react. They have frozen 401Ks and retirement accounts that will bear the full brunt of a liquidity trap/collapse.

We just finished with a two year Bull Market. It was designed to bring CONfidence to the sheeple and try and heal a global liquidity collapse by buying time. Now the CONfidence part of the equation is destroyed. So now the real game begins. This is the type of market that the top of the food chain likes. This is where the tiger rules and the harvest of the weak begins. The best advice I can give to most of you is to get out of this market and go to PMs, food, farmland, rural areas to live (at least get out of major metro areas) and prepare for rough few years. Most cannot or will not make these changes and will freely choose to try and play in this game of top predator takes all.

If you have a 401K you can "borrow" against it for instance to buy farmland but you MUST consult a qualified accountant to tell you how to accomplish this within the framework of the law. SEPs and IRA rollovers are easier to use for "other investments" but again you must consult a qualified accountant to advise you. Closing these accounts outright will cost you dearly with taxes and penalties. For some this may be acceptable.

Look for a massive effort by the Central Planners to put some brakes on this next week and shove a lot of the shorts over the cliff. I have no idea what their next form of QE will take but it will be a massive attempt of monetization that will focus on the Eurozone.












59 comments:

  1. Holy Cow, gold up $43 at $1868 as I type this, and futures look blood red, interesting Friday shaping up. Time to hit the sack, will try to follow the blog tomorrow as always.

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  2. Just curious why EUO has been so stable...? It would seem that it should have spiked above 17.25 (at least) over the past 24h.

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  3. From Keystone Speculator (KS):

    No comment about gold so far today.
    KS did have charts about the Euro & Dollar and feels the dollar will strengthen and the Euro fall.

    Both KS and Phil's Stock World feel the sell off is overdone. Phil especially felt the sell off in Germany is overdone.

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  4. well LDK got a nice deadcat bounce. oh well. didnt want to gamble on it. good luck everyone.

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  5. no rush.....look what patience did for the trade on GPL .......

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  6. Didn't expect to see green on the S&P today.......

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  7. Clif Droke's latest article:

    http://news.goldseek.com/ClifDroke/1313700593.php

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  8. Assuming y'all saw this from Zero Hedge on gold/silver backwardation: http://www.zerohedge.com/news/perfect-storm-sees-gold-silver-surge-%E2%80%93-chavez-gold-action-leads-backwardation-short-squeeze-and So, gold is in a bubble, lol.

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  9. So Kli, if not feasible to sell 401-ks/ira rollovers...keep in cash after taking profits? Lots of cash and miners in mine in addition to divi-paying stocks.

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  10. Is it actually a cash account in the 401K? If money market, or better yet "stable value" those choices have their own little issues if stuff starts hitting the fan...

    http://www.investopedia.com/terms/b/breaking-the-buck.asp#axzz1VUJxXAQS

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  11. Yes, I know homer. Don't know what to do, looks like big money already getting out of the dollar...above posted article also on goldseek.com. Can one really own physical in those accts.? I see that advertised...own phys, cef, and pslv...don't know whether they will hold up longer term in dollars. This has haunted me for many moons, stockpiling some food and water, not that it will be helpful in '14!

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  12. All,

    If you believe market is going lower then buy some RWM, it's not leveraged and it's short one to one small cap russell 2000. We have one more upside for the market this yr, with or without QE3 between now and end of the yr and then 2012 to 2014 bear would be roaring. QE3 would not have the upside effect that QE1 and QE2 had, the actual economical problems can not be ignored this time regardless of how much more bernanke prints.

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  13. All,

    Read and understand the latest clif droke's article I posted above and do not let your mind play trick on you.

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  14. One concern for the near term gold outlook is of a technical nature. The gold price is currently overextended from its 200-day moving average by nearly 22%. This is the first time in over two years that this has occurred and it shows how exceedingly “overbought” gold is right now. Below you can see the SPDR Gold Trust ETF (GLD), a proxy for the gold price, in relation to its 200-day MA. -cliff

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  15. hey Sis - I struggle with this as well. I'm afraid at some point I will have to simply cash in the 401K and take the hit. Only real protection in there is the infamous "stable value" fund. Whatta joke. I will never convince the better half to relinquish control. One of the worst things that could have happened for most folks is the bull market of 2009-2010. They are now convinced to ride things out as the markets always go up. I can't even dump some of my company stock which was doing quite well because she is afraid of the tax hit. My answer was so you'd rather less of a tax hit next year when there's virtually no gain or a loss?

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  16. Before Joe jumps on me, I meant better half relinquish control of her SEP/IRA. I control mine and I can also sell the company stock if I really want, which I think I will do!! I do have some control Joe. ;-)

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  17. I have suggested to several friends that they get out of the market this summer. Almost none of them did so. The general response is one of the following:
    1)It's a good company, I just like owning it.
    2)Don't want the tax hit.
    3)It's already down again, I'll wait until it goes up
    4)I'm holding it for the long term.....it's a good company.

    The only "investor" i know who made good decisions was my little brother who got out of mining stocks last April from a 2 year hold, a month later went 50% phys gold and 50% cash. He is still holding.

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  18. Homer,

    Buy 400 shares of RWM and let it ride till 2015, you can always buy more and average down if it goes lower. When S&P 500 reached the high of 1370 in May, RWM was at $28 which means the worst case scenario for RWM is it retraces to 28 from where it is now which is 25 and if that happens then you can average down. RWM is buy and hold till 2015 regardless of updays in the market and the reason is the trend for the market is going to be bear till 2015, bernanke will do some QE3 if S&P gets down to 1000/1050 and that might take the S&P to 1260 and retracement will start after that. Elevator is down any way regardless of how you look at for the next 4 yrs and since you are not a trader, the best deal is what I just said. When S&P hit 660 in 2009, RWM was over $90. The risk/reward in longer term is in RWM side.

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  19. Sister - you can own whatever you want in a truly self-directed ITA. Gold, real estate, tax liens, etc. You need to set up an LLC that is owned by your IRA. Your IRA owns the LLC. The LLC can own most anything.

    You have a trustee handle the funds, records and assets and keep you in compliance with IRA regulations. One such trustee is Pensco Trust Company. There are other such trust companies. You will probably want to consult tax professionals after you buy and read the book IRA Wealth by Patrick W. Rice.

    What you can own in an IRA/LLC is pretty much limited by your imagination.

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  20. I meant, "where it is now which is 35, not 25".

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  21. RWM has been a nice buy and hold since May when it hit 52 week low of 28 when S&P 500 reached 1370.

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  22. Inlet,

    You might want to consider RWM as well, not for trade but for buy and hold. The time horizon to hold is till 2015.

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  23. As always, thanx Joe.

    Hey Inlet - my wife has an LLC so I think I'm going to pass that advice along as well and have her talk to her accountant. I would love to see Gold take a hit as it would make this option more appealing and open up the miners as Joe has pointed out.

    Me and my corporate 401K on the other hand have limited choices.

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  24. “[US dollars] have value because everybody thinks they have value. Everybody thinks they have value because in everybody’s experience they have had value.” – Nobel laureate economist Milton Friedman8

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  25. RWM does not have maintenance margins and decay like the 2X or 3X short index, it's one to one short Russell 2000.

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  26. Homer - She (and you)should be able to invest alongside her IRA as long as you meet record keeping requirements in an LLC. Say the IRA buys 50% of the LLC and she owns (outside the IRA) the other 50%.

    This complicates the record keeping and tax reporting, but is possible. Have her buy and read the book I suggested first as a run of the mill accountant may not be aware of these options. You have to be extremely careful in handling this so as not to trigger a taxable event.

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  27. talk about decoupling....collapsing stock prices ...collapsing dollar....rising gold and silver

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  28. Homer - If I had Kli's money I would probably set up an LLC (for my IRA) and buy 1,000 acres of farm land. I could always lease out the land to tenant farmers to generate income and be a plantation owner. Of course, living on the land would probably invalidate the IRA status, so I would want to carve out 10 acreas to own separately for the plantation home. hehehe

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  29. lol Inlet - and thanx, already ordered the book as your second to last message confused me.

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  30. that's actually a plan i have considered inlet and quite dooable....but as you have stated you may not live on it...SEP/IRAs are easier to administer with less risk of creating problems 401Ks must be done through a qualified administer

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  31. LDK support is 5...lets see if it hits it

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  32. http://seekingalpha.com/article/288596-ldk-solar-slashes-guidance-shares-plunge-over-20?source=yahoo

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  33. silver melting up into the close

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  34. Hi Joe
    How about SH for a long term short position?

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  35. Absolutely - you have to maintain an arms length relationship for any transactions involving yourself and the retirement account or you will invalidate the whole setup. That is the reason you need to have a trustee to maintain that arms length between you and the retirement assets to insure no current benefit accrues to you personally but benefits the retirement account only.

    But an LLC structure allows you to invest in nearly any asset you desire. Borrowing within the LLC to make an investment can present some unique tax accounting situations.

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  36. KLI: JOE: If I can hang on to my job during the upcoming depression, will I be able score a lot of bargains?

    You keep saying deflation is coming. Wouldn't this be a plus if I've got cash supply?

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  37. Jay the kind of deflation we are talking about will be about surviving.....not profiting. You will lose your job OR be so concerned about losing it that you will spend NOTHING except on essentials. Concern yourself with preparation not profiting. Only those with excessive cash 7 figs and above ....liquid with no debt will be playing that game. If you are there then yes you will score.

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  38. If I can I will post some realistic outlines of what might be REALISTICALLY expected

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  39. tom sh is fine but RWM will give you more bang

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  40. Your just surviving post is the most personally depressing thought. In some ways, I have had to trade and proceed like it was not true as I don't see good solutions should it happen. I know what that kind of deflation will do to me, my employees and my company. Try as we might, even with perfect execution, it doesn't look good. We've been a survivor in an industry that has already declined 50%.

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  41. Ken....if its any comfort...the industries that make it through will be the beacons that lead the rest ahead. Awareness is the key and adaptation knowing what is ahead gives you a leg up. gl

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  42. Great info here...thanks. Question: if short sale ban is enacted, what happens to investments in RWM? Any thoughts? THank you in advance

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  43. Kristen,

    They are not going to ban short index, they might ban shorting banking stocks temporarily, and if they ban shorting some individual stocks, regular dumping would intensify which would take the short indexes up any way.

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  44. Thank you.. I have been looking for a strategy for a relatives portfolio... She is disabled and has no prospect for working or increasing wealth other than what I can do for her as her POA. I think this strategy will work for her... And I do consider it conservative. I can liquidate at any time plus I am investing with the trend NOT using 2/3 x etfs with their inherent problems. Blessings... Divine love

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  45. Talked to an old Vietnam vet today, he agrees with me. What we, as a people, need to do is stop voting. When you vote for a bullshit candidate what you're really voting for is bullshit. It doesn't matter what team you're on you're voting for the privilege of being lied to by the liar of your choice. Stop voting. When a real American comes along, your vote will be ready to go. Don't vote, don't vote for the status quo, don't vote for The Man.

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  46. Did you vote for bullshit? I did! I voted for EXACTLY the kind of bullshit I'm being fed! I voted for bullshit to be shoveled into my maw by Al Gore, I voted for it to be shoveled by John Kerry. I was upset when a different bullshit shoveler won each time! Oh no! My fake reality was delivered to me by Dominoes Pizza instead of Papa John's Pizza! DAMN IT I DIDN'T ORDER REPUBLICAN BULLSHIT I WAS LOOKING FORWARD TO DEMOCRATIC BULLSHIT!!!

    What are we doing people?? Please.. Join me and just.. stop..

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  47. Drank with an old Vietnam vet today, so I know what he REALLY believes. It breaks my heart to see the young understand, to see the old understand, and to know we're still so helpless and aimless as this. Evil men.. properly guilted, may come together.. to do good things.. Only for a while, that's all it takes..

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  48. I've been reading this board since it's inception and even followed the regulars here when they were at the SKF board. I rarely comment but reading Morla's post caused me to chime in. Morla, I sense much frustration (and rightfully so) but understand that you are awakening. It's a good thing. You are seeing this game exactly for what it is and it's your awareness telling you so. Like Malcolm X said... we've been hoodwinked, bamboozled, led astray. If you go back in history (and not just the founding of America stuff ;-) you'll see the same struggle played out over and over. Not to get all esoteric and stuff... but I wonder if there isn't some lesson we all need to learn here? :-)

    Anyway, listen to Kli, Joe, Red, et al... their wisdom is priceless. Understand the power structure but more importantly... understand your self.

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  49. The following accurately describes the action lately in the stock market, the trinity is the stock market and the fellow standing up is the trader/investor:

    http://www.youtube.com/watch?v=u70GP8K_DO8&feature=related

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  50. Jay,

    The video kli just posted with George Carlin talking is your ANSWER. It makes no difference whether George Said it or X, Y, Z.

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  51. I posted this earlier, one time I voted was for Reagan and I regretted it. I was still a fan of the guy, but did not do what he promised and make government smaller and return of more power to the states. Other regret was not voting for Ron Paul.

    And while I agree I can't stop thinking of the quote...

    "All that is necessary for the triumph of evil is that good men do nothing."

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  52. Homer,

    Being good requires real sacrifices and struggle, it requires individuals to think of the good goal and what's good for the overall society than what serves their individual short term interest, the quote you mentioned has a pre-requisit which is awareness followed by willingness. Public are still in the mode of pointing finger at others rather than themselves, they forgot solution starts with each individual and their level of willingness to SACRIFICE for the betterment of the society and their fellow citizen. Majority still are part of the problem. not solution, if they were not, the so-called powerful could not take advantage of it. Humans are amazing animals, they have no problem looking other way when their so-called individual wants are met, they only start complaining and pointing fingers when part of the filth that served them no longer do so which means it's not justice they are looking for, they are complaining about the lack of so-called filth benefit. Most of the public always thought that all they have to do is vote and their duty is done,heheeeeeeeeeeeee!

    Let me give you a real example, while back when W was in the office I was in London for business and in the airport I was sitting and enjoying pastry and greek coffee, and noticed couple of young british businessmen were talking politics, the subject they were discussing was how bad George W was and his disregard for other countries and invasion of Iraq,,etc. I approached them and they found out I was a yankee, so they asked me about my opinion, I said I will give them my take on it on one condition and the condition was that I will answer their questions and then I will ask them a question and the condition was that they answer my question HONESTLY and they agreed. My question to them was, is the real reason they were critical of W and our foriegn policies was due to search and awareness about ethics and justice or that they were critical of us because they envied the fact that they were no longer the #1 colonial power in the world which means they complained due to lack of power to be able to impose their will and not lack of justice and asked them clearly to be honest. They looked at each other for 20 seconds silently and one them said, " did not expect that angle, ok, honestly it's due to the fact that we are no longer top dog" and right away after that statement they put their head down and left,heheeeeeeeeeeeee!

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  53. This is off the present topic but just to share.
    From "Medical Economics":
    Physicians saw patients less often last year, and fewer patients began drug therapy for chronic conditions, according to annual report from the IMS Institute for Healthcare Informatics. Visits declined by 4.2% from mid-2009 through 2010. New therapy starts for 17 chronic conditions declined by 3.4 million in 2010 compared with 2009.
    The authors speculate that higher unemployment, rising healthcare cost, and loss of health insurance were responsible.
    I have no reason to doubt their findings. Just more proof the system is cracking.

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  54. Homer,

    We are what we do, think of the line in the batman, " It's not who I am underneath BUT what I do that defines me".

    http://www.youtube.com/watch?v=K2AkZ3akTZ4

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  55. A bit of frustration perhaps, but give me a little slack I was quite inebriated having just retired from a heated discussion with a similarly drunk and frustrated veteran :)

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  56. Hey Morla - again, I agree, I have done for 30 years what you are asking for...but maybe its time to enter instead of withdrawing? Has nothing to do with voting or not voting but speaking up and speaking out.

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  57. Homer - over the past 20+ years I have voted against a lot of politicians and only for a select few. It is always good when you have a 3rd party candidate so you have the option of voting against the major part candidates. Hehehe

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