Thursday, August 4, 2011

MORE WATER!


More accurately.....More liquidity. Its the lifeblood of capital markets. Its what puts out the fire of panic and right now there is a wave of panic sweeping the world markets. The Bernank is monitoring this with a lot more technology and information than we have and its a mistake to underestimate his ability to kick this can down the road further. There is no doubt that a day of reckoning is coming and he knows very well the economic cycle will ultimately have to be dealt with. As Droke and other cycle analyst have predicted a cleansing down cycle of the 60year cycle will clean out the excesses that we have enjoyed for the past boom years. No ammount of liquidity will change this ultimate solution. Deflation will be the outcome.

The debate will rage on how much stagflation (mistakenly labeled inflation) can we take and how long this will continue before they pull the plug but my calculations are another year roughly. It won't be smooth sailing getting there but it look like a walk in the park once the K-wave hits fully. If we are lucky enough time will be taken off the clock that we can continue to store enough acorns away and prepare for the Kondratiev winter more fully. Whether you buy into this scenario really doesn't matter. If you don't then only yourself will be to blame since you've had over two years of warning that it is coming.

Once again physical gold, silver, and cash needs to be accumulated and all debt needs to be erased. Stores of non-perishable food and water with hopefully some form of self sustaining energy source. These are common sense preparations. Whether they become needed or not is open for debate and time will tell. As for as guns go...thinking that having guns to protect yourself from a totalitarian government is just foolish. A police state will simply vaporize you in a literal heart beat. Guns would only serve as protection from the increase in crime FROM the disintegration of the state.

You need to concentrate on making money and forget the politics....That game was lost a long time ago and only nature will affect that outcome. More liquidity and monetization coming. It won't affect the velocity of money simply because the CONfidence cannot be restored. Its all about confidence and has always been. Structural destruction of your economy will not occur without a renewal that takes years and years to take place.

Miners EXK SSRI AG ANV SLW GPL still are in a bullish channel. I've taken a lot of the table and as usual will probably miss a lot of their move but my risk is now very tolerable. EUO is a better play here but the percentage is lower on the return. I'm more of a short term trader with PSLV and my core of PHYS is gone now. GL see ya later today.

65 comments:

  1. Hey Kli. Here is an excellent read on our current state of affairs.

    "The QE process will become an integral part of the monetary policy. The purpose for its continuation has been and will continue to be to prevent USTreasury auction failures which would paint a global billboard sign of USGovt insolvency, ruin, and default."

    http://www.financialsense.com/contributors/jim-willie/2011/08/03/license-to-debase-u-s-dollar-further

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  2. Thanx for the song yesterday Joe...love the Moody Blues, just letting it play low at work. up next, Question...
    http://www.youtube.com/watch?v=IBsdHoTdOmc&feature=related
    then maybe some classic Nights in White Satin, I know you're out there somewhere, on and on, great band...

    You guys have fun with DNDN, what a nightmare for some folks. Checking to make sure it ain't in my better half's portfolio...she loves the bios

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  3. thnks klc......very similar to what I've been saying... i like this..
    They have given the system license to debase the USDollar further, as Gold has responded in a breakout. The President is so clueless as to believe patent reform can make a difference. The bigger obstacles are poor education, minimal math & science requirements, tendency to play video games & text messages than studying (even inside school classrooms). Of course the debilitation is compounded by the US lacking a strong industrial base. So better patent protection would mean the US corporations could more effectively protect their offshore jobs, where the majority of jobs are located.

    Worse, the players on the global debt debate stage exposed the USGovt as Greece times one hundred. The veil of ruin and arrogance has been lifted for all to see, the deep blemishes and skin cancer visible for all to see. The USGovt borrowing costs are near 0% for the same reason that the Greek borrowing costs are at 30%. BOTH NATION'S FINANCES ARE BROKEN. To cap it off, the tombstone on the US Republic will feature a Super Committee to recommend the most difficult of budget decisions. Such fanfare without proper label. The committee is a formalization of the Politburo process, a perverse interwoven political stranglehold fabric that takes the worst of the Weimar Republic and melds with the worst of the Fascist Business Model

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  4. Homer,

    This one as well:

    http://www.youtube.com/watch?v=-umqM9R8cnI

    I am listening to it now while trading.

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  5. "The biggest obstacles are poor education" man is that an understatement, the idiots the have been running our country didn't bother to pay attention in history class....... Same goes for the majority of the American Public. One things for sure after the Debt Debate Circus our Political System is done! Took me a while to get there but I'm there........

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  6. LOL Joe - awesome. Love picking them off the right hand side, like a kid in the candy store. Oooohhh - I remember that one...

    My music collection at home has become too cumbersome to manage so I end up not even listening anymore. Should just jack into youtube

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  7. Homer,

    When surroundings including economy, social issues, family issues and overall negativism seems overwhelming and your FEAR starts to kick in, listen to this one, the purpose of using music as a tool is to create harmony within yourself especially when the inner struggle between your good emotion vs bad one intensifies:

    http://www.youtube.com/watch?v=nvlTJrNJ5lA&feature=related

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  8. Kli - curious if there's a reason you're out of PHYS? Is it just for now? I'm trying to get my better half into it even more...still heavy into equities unfortunately.

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  9. homer.......I trade......PHYS is paper for me and paper is paper.....physical gold I own....and silver..... besides I made my goal on it and I have a discipline that i try to keep trading....I still maintain some miners and even added today to some. I wanna pullback to 1600 or what ever becomes my next support before I add PHYS.....but long term PHYS will hit the moon. So you should NOT overtrade.....just hold

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  10. Kli, how about his reference to the new Super Committee being a formalization of the Politburo process.

    "Slowly forming is the Fascist Dictatorship that follows logically from nationalization of Fannie Mae and AIG, the home mortgage cesspool and the derivative black hole."

    Bye Bye democracy....

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  11. Huge TP fan, saw him once live for my birthday years ago and he was great. Once again going through his separation/divorce, terrible. Vowing to browse through my collection and rebuild the set of 6 CDs with my favorite music that I lost a while back switching cars.

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  12. Understand the paper comment, there is a possibility for redemption but the number is pretty high. I still feel its better than GLD especially from a tax perspective for non-retirement accounts. Of course that may mean nothing in another year or so. ;-)

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  13. kli,

    Market talking loud and clear today, especially natural gas and oil stocks, other side of the coin, heeeeeeeeeeee!

    http://www.youtube.com/watch?v=ARgIC0L9dDc&feature=related

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  14. kli,

    Tape turned at 11.50 for DNDN, in heavy at that price for intra-day trade.

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  15. It's interesting that oil (the commodity) isn't lower. Do you guys believe this is because of the coming QE3? As you mentioned, oil stocks are getting hammered!

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  16. GMXR and DCTH to the woodshed today, beech slaping, heheeeeeeeeee!

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  17. The stock market is crashing!! Where is PPT?!

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  18. target for H&S for S&P is 1130, until then scalping short intraday bounces on high volume like Joe pointed is the short term strategy, otherwise stay out.

    Making a cool shopping list with ATPG and LDK on it.

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  19. No reason to catch this knife yet.....GDX looking for 55 to hold otherwise SHTF

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  20. liquidating gold now to cover margins.......yum yum

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  21. Maybe Ben decided against QE3?

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  22. Fed will do QE3......the only issue is when and in what name You can be assured they aare pumping in hundreds of billions in liquidity today worldwide

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  23. Commodities have really taken a hit in the past hour! Has anyone else heard a rumor about increasing margin req. on gold?

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  24. "Bank of New York is preparing to charge some big depositors, essentially offering a negative interest rate."

    http://online.wsj.com/article/SB10001424053111903366504576488123965468018.html?mod=e2tw

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  25. yes sammy and yes i'm sure they will its all just a stall tactic but gold can easily correct here to 1550

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  26. LOL - the only real fund I play with in my 401K is PCRIX, commodities. Can't wait to see the close today...maybe it's time to dump some more in if it keeps getting crushed.

    SSRI/SLW...

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  27. Glad I let go of RIC yesterday man what a s#$t storm it is today......

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  28. Red,

    Keep ALU on your radar as well, it's going to give you a nice entry position, last time you called the bottom on it right on target, it has already chopped in half from highs of the yr, if it goes below $3 then it's going to get tempting.

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  29. kli,

    make sure you keep tracking the elephant ALU, I like the fact that every day it's getting cheaper. Volume and liquidity is never an issue with ALU, when market starts turning back up ALU would be one of the stocks that will go thru nice squeeze.

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  30. ALU falling knife off the normal 2 sd boundaries at this point. Bottom will be around when S&P turns. Normally around 2.55 to 3.00 but if something goes wrong it could go much lower especially with the plunge and margin calls over the past 2 weeks.

    Looks like everything is being slowly brought down to contain stagflation policies.

    Will hold off on the next tank of gas for another few days.

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  31. all telecommunication stocks getting torched.ERIC, S, ect.. PCS basically got a 50% haircut in 2 days. evryone seems to have abandoned ship on that sector. LDK under $6.00 and heading lower. so much for a rally when the debt cieling was passed. you know the mkt is bad when even SRS is seeing nice gains.

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  32. KLI: What is your opinion of today's market action?

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  33. "you know the mkt is bad when even SRS is seeing nice gains. "

    LOL - rode that monster once...ONCE. ;-)

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  34. I remember the good ole days when KLI pumped SRS.

    Then the boys took over and it got burned.

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  35. SRS seemed like a no brainer, commercial RE was the next shoe to drop...

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  36. WOW!
    I was gone all morning and just turned on the computer now. At least my EUO calls are green.
    I don't mean to sound like a "Pumper" with NKTR, but the poor stock has been pummeled all week. The RSI must now be below 20. Seems like it has been overly punished. They announce earnings after the market closes today. I guess we will find out then what is going on.

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  37. Rudemood & Jay,

    This song for you:

    http://www.youtube.com/watch?v=d-diB65scQU

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  38. Homer,

    An excellent day for playing this song, I actually enjoy days like today in the market:

    http://www.youtube.com/watch?v=d-diB65scQU

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  39. Market action today is a set up for tomorrows unemployment numbers should set up for a nice tradeable bottom in the next few days. what for the SnP to hit Red's bottom. This is welcome and necessary....This is all manufactured.....get your shopping list ready.....but this time EVERYTHING is a trade.....short term holding only.....We have begun a Very dangerous time. You better staRT WORRYING about the real issues.....food water energy

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  40. There will be an announcement tomorrow of the "next" intervention.....it will be coordidnated with the G20 central banks.....first watch Euro tonight to see if Trichet announces and emergency easing......

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  41. LOL Joe, I'm sure you LOVE days like today...what a whooping...I think it will roar back in the last ten minutes...hahaha

    DNDN back under 12...

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  42. Bought some TNA at the close. Love this game.

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  43. Homer,

    Dumped DNDN at 12.40, buy was at 11.50, very nice day, listening to my favorite songs and trading, no FEAR, to me it's all fun.

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  44. gl ryan.....14th WORST point decline for SnP ON RECORD.....CNBS's Bartiromo is in an orgasmic frenzy

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  45. Kli - record it for us!!!! hehehe

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  46. Red,

    If you recall couple of months ago we talked about ATPG getting down to 10 and LDK to 5, let's see what tomorrow brings, so far so good!

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  47. So Joe, should ABAT be forgiven this support break, given the circumstances, or should I be worried?

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  48. CNBC is spazzing out. Bloomberg is spazzing out.

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  49. ABAT's selloff was pretty low volume too..

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  50. Morla,

    With ABAT, short term it comes down to their earning announcement on Monday, if earnings are good then no worries, if it's not good and market keeps going down heavy then it will test 0.80/0.90. I would not worry about closing today at 1.15, next week is important for ABAT depending on their earnings. You have a stock that you bought at 1.27 and not 10.27 or 20.27, so the down side in the worst case scenario is still not as bad as other stocks especially if you do not have heavy shares.

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  51. Homer -

    "Huge TP fan" - me too. Take it from a country boy - corn cobs are rough. lol

    Interesting day. Days like today is whay I keep some QID to hedge my longs. Some pain, but not too bad over all.

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  52. Morla,

    I am not going to ask you how many shares you bought at 1.27 since that's your business and yours only, how ever if you bought heavy then you should have taken some profit at 1.42 to guarantee profit taking and that would have given you 0.15 * number of shares profit which is important depending on number of shares you bought.

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  53. It's just a little position, I'm making small trades lately even by my small fish standards. I intended to buy and hold it a while to see what happens, maybe average down later if things went badly. I guess I'll simply ignore the price until earnings, fits my idiom.

    I'll remember your profit taking advice for any larger buys I make. I can see how quick profit taking is an easy way to lock in a better overall risk/reward on whatever position produced the low-hanging fruit.

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  54. KLI: Nice youtube addition...

    Led Zeppelin never looked so beautiful.

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  55. Profit taking will become critical going out.....fewer long term trades (EUO an exception) this is a trader's market....safe havens like physical gold and silver remain preeminent.....

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  56. Love on the video. Sounds a little like Plant!! Wife turned her nose up at the video, being a female Zep fan, I believe she thinks this is almost sacrilegious. ;-)

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  57. Gold and silver are holding up well, miners got clobbered anyway but unless the metals start plunging there oughta be a bid down there somewhere.

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  58. KLI: I've found the perfect video for when QE3 is announced!

    http://www.youtube.com/watch?v=CRabo7pOfB0

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  59. Hey Inlet - missed the shoutout. Funny how many songs looking through the catalog I love...and can be used in so many situations

    Free falling
    http://www.youtube.com/watch?v=1lWJXDG2i0A
    Learning to fly
    http://www.youtube.com/watch?v=s5BJXwNeKsQ
    Running down a dream
    http://www.youtube.com/watch?v=LkaVSVdOD9g
    Don't come around here no more
    http://www.youtube.com/watch?v=aari42a3YLU
    into the great wide open
    http://www.youtube.com/watch?v=vXETnaD3Ho4

    Also a pretty big George Thorogood fan...women, cars and booze, he pretty much covered it all...

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  60. You need something like Mark Nesler - "Used to the Pain". Now there is some dark music for you. lol

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  61. Hi,all. Checking in from iPad, tough typing...would bead don vacation! Thisi isasfd brutal but hope to add more physical soon. TTYS. Relying on you, need some help w/energy sources. Be good. -- Sis

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