Thursday, March 1, 2012


You've heard that line before and you've heard the rest also..........a butterfly flaps itself on one side of the world and a hurricane results on the other side. This is the basis for Lorenz's chaos theory. It can be applied loosely to several disciplines and has been with mixed results. I compare it to herding cats. It is of interest to me because I believe it is precisely where I believe we are in this incredible juncture in our current economic cycle. In the effort to bottle lightning, Ben is creating a potential unleashing of the chaos theory on the world of economics that will snowball into an uncontrollable avalanche of economic hell that even the most powerful entity in the world will not be able to contain. Imagine for instance just one aspect of our current predicament. If you listen to the Federal Reserves own account of the financial collapse in 2008 they clearly define that the incredible and out of control leverage created within the Banking industry led to our monumental market meltdown including the bankruptcies of several major banks and corporate institutions. What is interesting at this point is how the current (and I might add "predicted") path is proceeding under the guidance of the Central Bank to address the overleverage catastrophe that virtually destroyed our financial system. What is this "interesting" path of rescue for our country and the world's future.........MORE LEVERAGE!!  Just imagine....these scoundrels have only built a bigger bomb to put out the damage exploded by the first bomb.

Remember the theme of this and realize that you are about to embark on the chaos theory. The butterfly has already flown and the hurricane is headed our way. Of course you really don't believe it........or do you? I think that most of us want to believe that we are wrong but our instincts are telling us something is coming and it is unlike anything we have ever experienced before. Just OVER-LEVERAGE DISASTER WAS TREATED WITH ADDING MORE LEVERAGE! Maybe you're right....maybe it will work....then again I have some nice long term treasuries I want you to buy from Italy right now.......and Spain......and Portugal.....and while we are at it I'll throw in some nice old 30year treasuries from the good ol USA.....Central Banks like should you.

You want to cry about a one day beatdown of gold.......go ahead........but you better know what the future is and why you bought.....have a nice day......I added......and I'll add on all beatdowns......


  1. Phil Davis posted a SPY chart from David Fry on his website. They believe SPY is testing its lower channel line. Will it fail or hold??

    Keystone Speculator continues to post about AAPL and is using that as a proxy for a possible fail in the Nasdaq. Keystone continues to post all sorts of technical signals that AAPL is due to fall, and thus bring down the Nasdaq. Will AAPL fail??

    I have been looking at SVM which has not participated much in the metals rally. SVM pays a dividend and a dividend would be due late this month. I might take a position on a pullback--?7 dollars?? and then hope the dividend gets chased thus bringing the stock back up.

  2. traders or holders.......either way its green doc

  3. Thanks Kli.
    SVM presently @ 7.28.

  4. still looks corrective.....shake the tree? or cut the tree? you pick....I pick its only a shake

  5. I put a limit order in. Will see if it hits.

    NKTR doing well. The shorts are burning.

  6. Kli,

    If you can find the time I would love your opinion on the following interview considering the person they’re interviewing! Seems be to echoing many of the things said right here in KliVille or is it a guilty conscience? btw Great Posts the past few days…….

  7. i like stockmans commentary over the past couple of years tom....and have seen a number of his interviews......this sums up this interview.....

    Q: Why are you writing a book?

    A: I got so outraged by the bailouts of Wall Street in September 2008. I believed that Bush and (former Treasury Secretary Hank) Paulson were totally trashing the Reagan legacy, whatever was left, which did at least begin to resuscitate the idea of free markets and a free economy. And these characters came in and panicked and basically gave capitalism a smelly name and they made it impossible to have fiscal discipline going forward. If you're going to bail out Wall Street, what aren't you going to bail out? So that started my re-engagement, let's say, in the policy debate.

    Q: Are you hopeful?

    A: No.


  9. Tom,

    Thanks for providing the link to the Stockman interview. This was the question & answer I found particularly chilling:

    Q: You sound as if we're facing a financial crisis like the one that followed the collapse of Lehman Brothers in 2008.

    A: Oh, far worse than Lehman. When the real margin call in the great beyond arrives, the carnage will be unimaginable

  10. Kli/Doc,

    Actually the whole thing is chilling!

    When I came across this interview I thought it somewhat ironic at the things he was saying because of who he was, unfortunately I happen to agree with all of what he speaks but wasn’t it on their watch the fuse of Crony Capitalism was lit and correct me if I’m wrong but didn’t they also hang the “For Sale” selling our political soles to the highest bidder? Funny thing is the person most able to maybe buy more time or actually come up with a remedy however painful, they dismiss:

    If you had a (former Fed Chairman) Paul Volcker running the Fed today - utterly fearless and independent and willing to scare the hell out of the market any day of the week - you wouldn't have half, you wouldn't have 95 percent, of the speculative positions today.

    Strange day’s indeed…..

    On a brighter note I’m glad for the minor beat down, I was getting worried my shopping bag was a bit light. Wish I had the chop’s to really appreciate what I was watching December!! O’ well fear, fear and more fear…….. Your right Kli they have no other choice now other than to print and everybody know’s it, even me………. and when they stop, none of this is going to matter anyway

  11. Tom...i wasn't going to comment on Stockman's early history but since you brought it up......hehehhee...Stockman was one of the "mavericks" brought in by Reagan's crew for the OMB and engineered the massive deficits of the eighties...prior to that we had enjoyed a very controllable period of deficits....Stockman promised but did NOT deliver....many of us have made mistakes in life and I am sure he learned......nothing like "born agains"

  12. Wasn't looking to dredge up the bay or anything like that but every once in a while your entitled to a nice slow pitch!


    Enjoy the rest of your weekend