Sunday, February 10, 2013

PEACE AND TRANQUILITY

As we enter into the heart of the Kondratieff Winter many of you share a sense of comfort brought by the extraordinary measures taken by the Federal Reserve, the private banking group responsible for much of the world's developed economies. Amazingly there seems to have been little or no steps taken since the economic collapse of 2008 to address the structural problems the were responsible for the staggering collapse. Massive monetary policy by the Central Banks in an effort to reflate the system and save the biggest banks which produced much of the problem.  Much of the developed world seems to be going through a series of coordinated monetary reflationary efforts principally through currency devaluation. Keeping this coordinated is the key. Recently cracks in this effort are starting to show up with Venezuela and Japan openly taking on a much larger competitive devaluation. It was only a matter of time before the cracks would show up as our own economy experienced a relative boom compared to the pain being experienced by many other countries as our Central bank using the dollar's reserve status maintained our spendthrift status.

That takes us to today. The Tranquility State. Many of us believe the effort being made to kick the can down the road is going have problems, perhaps even fail. Even if it fails most of us really don't understand the full ramifications of failure. Perhaps we have some hard times for a couple of years and then slowly return to America of today. With a slow down we may have to endure some decrease in Military spending......10%?..20%....40%.....Do we close bases overseas? Do we slow down new weapons systems with tens of thousands of high paying layoffs....and for how long? Do we bring home tens of thousands of troops from overseas? Many fiscal conservatives want to exercise budgetary restraint, but the programs being discussed to cut hardly make a dent in the 200 Trillion in unfunded mandates and direct debt. If one believes in Nature's law of mathematics then you meet "the problem". If we cut the budget across the board just 10%........we go into instant depression. You won't be accessing health care. You'll start experiencing major shortages as supply chains begin to break down.  If we don't cut the budget at least 10% then we will keep adding to an already impossible debt equation. Either way we are going over the cliff. 10% will not even correct the math... Default, deflation, hyperinflation, stagflation.........these are all on the table. I'm not going to dig a hole in this post trying to look into which one we get. We're going to get all of them. They're all unavoidable.    

By failing to prepare, you are preparing to fail. 
Benjamin Franklin 


In deference to Budfox, it is truly such a problematic math problem that ANY paper vehicle including the PM miners pose a risk to you......SO BEWARE OF PAPER........THEY HAVE COUNTERPARTY RISKS. Including so called blue chip companies OUTSIDE of the precious metals sector. We're truly in no man's land so if your think that we wind up with some type positive outcome then send me your kool-aid recipe. They didn't order up 1.9 billion rounds for the homeland because they believe its going to end well. NDAA isn't there for the "turnaround". I'm going to the Big Casino for couple of days and will give the boyz my best. gl

Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote. Ben Franklin


66 comments:

  1. CNBC pounding the Gold trade as a move OUT of the safety trade and into the risk trade (equities).....there ya go......go get those "risk equities)

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  2. LOL. Clive Maund has been very accurate over the last yr. or more and he's saying the PTB needs money in BONDS since rates are creeping up so they'll be pulling the money out of equities and esp. commodities: http://news.goldseek.com/CliveMaund/1360595700.php

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  3. Phil Davis writes today that there are bonds to sell and various Fed Governors are speaking this week. Also Option Expiration week. So, maybe a down week.

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  4. More news from the street...

    I was playing my regular gig at the local country club brunch and there was a "wealth management" group there with a room full of folks getting an earful on what to do with their money. I stopped to listen in and caught the presenters' slide on money printing. They explained that Bernanke saved us from a huge depression with his money printing but that the exit strategy for a move was a very tricky feat and that he expected inflation down the road. I stopped by to talk to them after his show and complimented the fact that he had at least not glossed over the most dangerous aspect of our current economic situation. I asked the main guy what ideas he had about how to successfully stop a money printing program as it had never been done in recorded history. He essentially said he didn't know. I told him I was in gold, silver, real estate, guns, and cash. They both laughed. They said "Do you think gold will be more valuable than stocks in twenty years?", rhetorically. I kicked them both in the nuts and left. No actually, I smiled and said maybe, then I left. Who the hell knows. I just want to survive the next five.

    Wilks out.

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    1. It's what you have left after the next 20 months that matter with health (physical and mental) being at the top of the list. It's getting more dangerous to shadow trade the Feds algo programs.

      Don't tell strangers you meet what your position is, not in this current environment. Better to ask opinions like is Alpo and Assault rifles the way to go versus Apple.

      Another Rat(zinger) just left the sinking ship.

      Some basic knowledge in building and using items like a rocket stove and a slow sand water filter will be very important when JIT breaks down.

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    2. Immred,

      What a pleasure to hear from you! I will take your advice and not tell any more folks I don't know what my position is. As always, your insight is quite valuable and I appreciate it more than you know. I remember when I was knee deep in alligators trying to trade SRS (losing badly) and you gave me the sage advice to get back to music and life. I did and it has made all the difference. Thank you for that. Also, luckily, I know how to build, wire, plumb, weld, rebuild engines, and grow vegetables. I have a full working shop in the garage for wood and metal. Don't forget that basic first aid and CPR are really a must as well. Everyone should have that under their belt in addition to their weapon of choice ;).

      Wilks

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  5. Twenty years is a long time. I would think that we would be out of the K-Winter by then. So, it could be that stocks would be doing better that gold at that time. The world could be in recovery mode with lots of new opportunities.

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  6. this miner trade is starting to feel like my SRS trade from years ago. watching so many stocks creep higher while the miners tank is a bit deflating. good luck to all.

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  7. KLI: Put me in the "10% cuts across the board" group. I've been saying this since '08 (although 10% is way too low)

    The first great depression was elongated due to the exact same "toss more money into the fire" policies that we've seen from the last 2 admins + helicopter Ben.

    We can either swallow the pill now and cure the disease or we can let it spread causing more pain down the road.

    And you say that 10% cuts will cause a depression. What's the big deal? Some of America's best inventions and innovations came during Great Depression I. Let's cut the spending, fix the structure and go through hell for a few years. We'll come out a lot better on the other side.

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  8. Shakin the PAL Tree Boss... go ahead and shake that there tree Luke. ;)

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  9. Jay--Your pts. well-taken. If only, IF ONLY we had just taken the meds in the first place, we'd no doubt be on the other side already. But the truly wealthy would have suffered and we cannot have that...

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  10. Couldn't help myself and picked up some AMZN April $250 puts. Chart not looking too hot!

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  11. Like that gamble too hubs.....and I like april

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  12. Hi all .....in the belly of the beast hope all is well

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  13. What? You're in NY or D.C.? Did you change professions?

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  14. getting ready for the "buffing" tonight and had a nice travel day....catching up on the trade...and I see nothing of interest....This is truly a sad time and my country is in peril. My guess is it will be very difficult for us going ahead now but my worst fears are for those of you under 50 .....this will be a long road ....most likely the rest of your lives will be very uphill. My hope is we manage to take back some of the republic but that is going to require a sacrifice that most have no grasp of. I am going out soon an pretending that all is like yesteryear but I can assure all of you things are dramatically changing here also....I am seeing things here I have not seen in many years. We will collapse soon. gl

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    1. I've had that feeling for almost ten years and am mentally prepared for it being somewhat young. The key I believe I've realized which nobody around me really has is that debt is slavery and I am almost completely out of it (Bit left on the mortgage). Will never ever go into debt again of any sort. People think I am extreme and maybe I am but I feel I will have a lot more freedom than them. I'd rather have that than a brand new shiny car every year but that's just me ;)

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    2. Hubz: Once again, I think we might be twin brothers. I am completely debt free myself. When I need a new car, I pay cash. The credit cards are paid in full monthly. 0 student loans. I don't even keep a monthly budget because my cushion cash is ample.

      Debt is giving money away for free. Not to mention all the stress it brings.

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    3. Hahaha maybe so ;) That is great Jay, I love hearing that from others. Congratulations!

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  15. I'm well under 50 and really hate this market.

    I remember when I was a kid, investing in stocks was "go long on anything" and make money. The daily moves were very small but consistent.

    If we see a total collapse. I've got one thing going for me. I have several business associates in Taiwan, China and the Philippines. Maybe one of those places will weather the chaos a little better than America.

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  16. Geez you guys ever entertain the possibility your cyclical thinking is correct but that your timing is off by a few years?

    I am your brother in spirit but I emphatically disagree about when the K winter will strike and why, and the factors which will influence it.

    In my industry, in my market, we are doing things undreamed of even a decade ago. I see transformation of businesses in so many ways happening under the cover of all the doom and gloom out there.

    I see businesses of all sizes and all markets embracing the need for this level of change and transformation, because they are scared s-less they can be made obsolete or become subject to market whims too easily. This is a far cry from even 3 years ago!

    And yet, when you all talk about K winter and collapse and rebirth of society, it makes sense, but why now???

    Or more specifically - why not in the years between 2018-2020, when silicon hits the brick wall of quantum physics, which puts the kibosh on the silicon computing revolution, which also is about 70 years, and would fit with the duration for cycles?

    And the likelihood, leading into that black swan event, all the jobs which will be eliminated, including those of doctors leading up to then?

    Just putting it out there for you all.

    Kli, there's things I would love to share with you to further my viewpoint. ping me if you be interested.

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    1. Fitzy, your points are well taken.

      I should add one more thing. If there was true danger of collapse anytime soon, gold would not be remotely close to it's current price.

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    2. Jay I will warn you on the gold trade. This price is highly manipulated IMO to conceal just how dangerous the current situation is. The headline price is like a massive warning signal that MUST be contained and therefore kept silent. Its doubtful that you know or that you know anyone that hold any gold bullion other than a few coins. I don't know anyone. THAT is how effective they are. But I do know of some VERY well healed big money people that are buying bullion.....ACTUAL BULLION. All of the paper vehicles for gold are there to sop up the money of suckers.....so they will blow up one day when their game is revealed.....gl Jay

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  17. Fitzy,

    I don't mean to jump in here ahead of Kli, but part of the purpose of his blog is to post just what people are seeing out there. I believe some type of collapse will come, but looking more at the 2015-2016 time frame.

    Perhaps you will expand on just what transformations you see coming and why you are thinking 2018-2020.

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  18. sorry on the run today but CERTAINLY there is reasonable doubt as to "when" the collapse/reset takes place ......each one of you must make your own decisions on this important matter. The great depression of the 30s was not a depression for all people and all countries....but for the many that it did affect, its touch was indelible and defined them for the rest of their lives. I hope that the can gets kicked longer than we can imagine.....and i will leave it at that for now. Just remember Madoff ran his Massive Ponzi right up until the very end and had to literally turn himself in to stop it.........imagine what i just said. gl to you all and i encourage you to issue any anecdotal information or opinion to the doom and gloom scenario or vice versa

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  19. This comment from rudemood is the reason why abandoned the miner trade:

    "this miner trade is starting to feel like my SRS trade from years ago. watching so many stocks creep higher while the miners tank is a bit deflating. good luck to all. "

    Maybe this is what they wanted all along, not sure. But I'm starting to get convinced that physical, and not paper, is indeed the way to go here for the right metals play.

    As for an imminent collapse, I also don't see it this year. Both Doctrader (2015-2016) and Fritzy (2018-2020) could be right in their timeframes. That means, we can ride this ponzi for another 2-5 years, and continue to prep away.

    Also, I think AMZN is a great company and I use it all the time, but the stock is not worth more than $30-50/share, at the most. I expect it to see <$200 before they ride it up again to $300, but who knows. At these current levels, more chance of downside than upside, IMO.

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    1. very possible but do remember that the market will come down when you least expect it and when everyone is expecting it to go higher......I have NO shorts but I would NOT want to be long general equities here. Its very healthy to have a divergence of opinion. I think our social, fiscal, political, and morality is already over the cliff. Having said that, then how could I possibly believe that we have the basis for a sound economy and country going forward. Sorry I just can't "buy" it. But then if you believe and see this is normal then you have to go with your instinct.

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    2. budfox,

      "This comment from rudemood is the reason why abandoned the miner trade:

      "this miner trade is starting to feel like my SRS trade from years ago. watching so many stocks creep higher while the miners tank is a bit deflating. good luck to all. ""

      I hope you had other reasons for abandoning the miner trade. I am in no way a barameter of where the miner trade is going. at the moment the miner trade is annoying, but i was just blowing off some steam. its been somewhat frustrating watching the mkt ramp up and the miners drop. but at the same time, i am trying to be patient, and will ride out the storm. for the record, i am still long KGO,KGC,SSRI. best of luck in your decision, i just hope my stupid comment didnt actually influence your decision.


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    3. time will tell on what the best decision is on whether to hold the miners or not. i chose to hold. and to correct my above post, i am long EGO,KGC,SSRI.

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  20. Very interesting discussion. Just at the moment, Christopher Doners is being pursued and it is live on CBS radio...still in Big Bear territory. Lots of confusion of course. Apparently 2 deputies are down.

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  21. Rudemood, not at all. As I indicated in an earlier post, I left the miner trade about 8 months ago (mid-2012), after getting tired of seeing pretty much everything go up while the miners were sideways-to-down. I was also down anywhere from 35-50% on my positions, and had to cut the losses and move on.

    As for this statement from Kli:

    "I think our social, fiscal, political, and morality is already over the cliff."

    I could not agree with this more. In fact, I'm just surprised that the markets and the economy continue to hold up despite all the trouble lurking beneath. That's why I'm thinking this kicking of the can down the road continues indefinitely until it cannot. I realize that the math does not add up, and we should be in a depression, and large parts of the country already are and resemble third-world hellholes. But if you live in your bubble in specific locations, all you see is new construction, shopping malls full of people, grocery store parking lots full, etc, etc. It continues to be a tale of two Americas, for how long, I don't know.

    Other than a few passive Index funds, I'm all cash and not long anything at these levels. Tempted to join Hubz with an AMZN short play, however.


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    1. The miner trade is without a doubt the toughest most costly and brutal trade I have done myself so I completely understand where you're coming from as someone that still continues to trade the casino instead of just buying and forgetting about it. Because of this I believe Kli is 100% right in the fact that they do not want us in this trade at all and over a weekend we will suddenly all wake up to complete change. As you said physical is what we really all need to be getting and not even messing with trading any form of paper. I hope to have my ducks in a row by then and am very close to calling it quits on trading and getting away from this madness not only to prepare and save money but for my own sanity. There's much more personal mental preparing I need to do and I cannot trade and do it at the same time unfortunately.

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  22. Something has to give. There is no one putting money in this casino now. If you think I'm fearful then you need to see what's going on behind the curtain. I don't think they can kick it 6 months

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    1. I cannot get over how much I'm seeing inflation everywhere and your average joe IS starting to notice and talk about it. They've done well buying time by shrinking packaging and lower quality to keep the prices somewhat low but even that is no longer viable.

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    2. I was at the grocery store a few weeks ago and saw some guy yelling and screaming at the meat dept. manager over $6 a pound ground beef.

      Joe six pack finally snapped.

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    3. Yes I've noticed Ground Beef costs about as much as Sirloin... Makes no sense to me.

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  23. the attack of the hacks..

    first they show up at Harvey's site..

    you remember....when Harvey did the pod cast with Chris Martenson..

    well Martenson site did not like it one bit.

    I was a member of the site at that time..I know

    well as things went along.....the site put up a poster who said he was Jeffrey Christian..

    LOL....LOL....are you shitting me

    as a paid member...LOL


    and what did Chris Martenson say......he suck up to the paid members.....you are the man babe...LOL

    so let us get back to the hacks

    why are they trying to get you into priceline.com

    look up the stock.....pcln

    they are trying to get long the S&P

    take gold to 800.00 that is where you will have me in my up right position

    paladin


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  24. I am sorry ...I posted this.

    By Antal Fekete

    http://www.financialsense.com/contributors/antal-fekete/american-bases-germany-gold-basis

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  25. so the hacks upped their game.

    from Harvy's site to Turd's site to this site..

    this is not only site they are thinging to get you into priceline.com.....LOL


    hacks....take silver to 5.00 and see where that gets you....LOL

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    1. They take silver to five bucks and I'm putting my house for sale and plowing all my cash into it ;)

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    2. not a snowball chance in hell silver goes to 5 bucks.....but .....how low can they take it.....If they thought taking it below 30 would help their cause they would do it....but that is their problem. There is NO bullion left and taking it down just brings in MORE buyers now....so gl cartel.....

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  26. Richard Russell says today on KWN that he believes gold has fallen OUT of the pennant and will enter the "clean out corrective" move preceding a dramatic move up just as it did in 79......so be prepared and if you have cash for gold or silver then the best to you

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  27. Look at that PCLN.......hheheheheheh.......over 700......you think they arent gonna butcher that one.....hehehehhehee.....some hedges are gonna get chopped into hamburger

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  28. Ouch on my AMZN puts... I hate low volume gap ups. Will have to be closed I'd imagine but I don't know if I can sit around and wait. Will watch for today and decide.

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    1. Hubz,

      What you think bout PCLN July 550 puts or 500's .....

      Pretty cheap

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    2. I don't watch PCLN too closely honestly so I'm not sure I can give great advice. But I probably wouldn't go any lower than 550's and with that I would only put a small gambling bet on it. That's pretty far out but if the market gets a decent downturn those could definately turn out nice in the next month or two. But I don't like the odds of that bet personally, better opportunities are probably out there.

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    3. What no GREAT advice! I'm canceling my subscription..... hehehehehe

      You might be right it almost seems to easy but I did miss those aapl puts I was looking at when that was over 700.......

      Hmmmm what to do, what to do

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    4. I like AAPL puts right now for sure. Wishing I had done that instead of AMZN currently :)

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  29. I am still holding ZLCS. The chart looks like it is completing a H&S pattern. So, maybe more ugliness in store.

    LDK broke out again.

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  30. Yeah for some reason my gut is screaming at me to sit on my hands. Market *feels* exhausted but I don't like going by my gut much haha... The 10 Year Bond is creeping ever higher. Ben might need to finally scare some money from equities back into bonds.

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  31. Cliff Droke saying could go to $1500 before the real burst...that seems unreasonable but we know better, it could be done.

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    1. they can definitely get gold there but with a "price" and they know it......so dont expect that tail to last very long....they don't want any big bullion buyers getting in there.

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    2. its about the only reason i still am watching the market day to day.....if they take gold down hard its going to be short and sweet so you have to be prepared for your bullion buy

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  32. Replies
    1. Indeed...

      Golden Minerals Company (AUMN)
      3.40 Up 0.20(6.09%) 2:19PM EST - Nasdaq Real Time Price

      First Majestic Silver Corp. (AG)
      18.27 Up 0.36(2.01%) 2:21PM EST - Nasdaq Real Time Price

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  33. Only reason I'm watching the market also Kli, for the gold bullion. I'm personally buying it on the way down though, I don't feel confident that I can time the bottom precisely.

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  34. Same here sammy but my buys get larger when they break 1600. I have been accumulating for four years.....thanx cartel

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  35. I'm also trying to rebalance my silver:gold ratio, was leaning a bit too far towards silver...moving towards parity to be on the safe side. If it does break 1600, I'm gonna beat you to the bullion...refresh, refresh, refresh haha!

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    1. Locked up in paper miner trade which keeps me out of a super heavy bullion buy....I'm sure that the multiple bullion derivative trades are designed to do JUST that to us.....but if you have fiat then you are in the catbirds seat to buy bullion here and on down.....IF there is a down.

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  36. Geez I just killed my AMZN trade for a nasty loss... they smashed me in the face with a hammer. It's okay to be wrong, it's just not okay to stay wrong ;) Now i know why AMZN is a short's widowmaker. It will crash and burn someday but geez good luck timing that.

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    1. You were holding PUTS on this??

      AMZN - Amazon.com Inc.

      269.47
      +10.77
      (4.16%)
      at 21:00 UTC Feb 13


      I'm sure it was just gambling money, but still, hurts to see a fellow options trader get skinned.

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    2. Yeah but bought them two days ago when it seemed stuck under the 50. Yesterday looked very promising but then CBS news at the open shredded it higher on decent volume. Couldn't have seen it coming unfortunately. ;(

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  37. Nice beatdown today with the dollar barely up. Glad I bought some Maker's Mark minibottles, they've diluted and I got the real stuff, lol. But there's no inflation.

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    1. I wonder if Maker's Mark plans to restore the alcohol content after their "supply" problem has been fixed?

      :)

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