Sunday, May 31, 2015

THE CORRECTION

When, how much, and do you really care anymore? By now you've either figured it out or you won't until its way too late. That's the nature of the Bear. The rule of alternates, if applied indicate this Bear cycle move within the secular Bear that began in 2000 will be the longest and largest move. When Paul Singer, Ray Dalio, and Greenspan tell you the market is about to dump, you had better believe there is a problem. A BIG BIG problem. I doubt that any shorts in the market will collect once the Bear move begins in earnest. Perhaps at first you will be able to trade within the Bear, but volatility and necessity will apply capital controls within the market destroying your ability to collect. The market will wrest any bear profits once the "blood in the streets" becomes extreme. Strategic short squeeze plays may work for some of the most skilled traders, but most paper plays will be slaughtered.  

I don't intend to apply any shorts as I did in the 2008-09 Bear but IF I get fortunate and the miners manage to stage a nice move within the early stages of the Bear then I will accept some early profits and convert the paper to distressed hard assets at that point. It may be gold or silver or it may be real estate. You may wish to convert to a solar system or alternate home energy source such as Musk's new battery packs. 

On the run still and will be more engaged in 5 days. Best of luck to you and hope you're paying attention to what's going on under you own nose in your own country. gl

Sunday, May 24, 2015

RESET

What happens when 'the' Central Bank of all Central banks hosts the world's reserve currency games in your country of origin? The country that issues the world's reserve currency must run trade deficits or export it's inflation while maintaining "confidence" 
in the currency with inflation, at the same time.  

"The Triffin dilemma or paradox is the conflict of economic interests that arises between short-term domestic and long-term international objectives for countries whose currencies serve as global reserve currencies. This dilemma was first identified in the 1960s by Belgian-American economist Robert Triffin, who pointed out that the country whose currency, being the global reserve currency, foreign nations wish to hold, must be willing to supply the world with an extra supply of its currency to fulfill world demand for these foreign exchange reserves, thus leading to a trade deficit."

In debt based economies, you must always have inflation to service the sovereign debt.

What happens when you repeal Depression Era legislation and replace it with moral hazard?
What happens when "they" are international and you aren't?
What happens when 2008 to 2015 you print 13 trillion and naked short certain markets and "make" others?
What happens when in the US 10 Thousand baby boomers retire every year for the next 20 years?
What happens when your debt increases 40 Thousand Dollars, a second?

From William White chief economist of the Bank of International Settlements.

"Beggar thy neighbor devaluations are spreading to every region. All the major 
central banks are stoking asset bubbles deliberately to put off the day of reckoning. 
This time emerging markets have been drawn into the quagmire as well, corrupted 
by the leakage from quantitative easing (QE) in the West. 
...
We are in a world which is dangerously anchored."

Federal? Reserve Open? Market meetings or the free market, who ya gonna trust?

"We believe that U.S. bank regulators have made substantive progress in establishing a credible framework to resolve a large, failing bank," said Robert Young at Moody's. "Rather than relying on public funds to bailout one of these institutions, we expect that bank holding company creditors will be bailed-in and thereby shoulder much of the burden to help recapitalize a failing bank." 


In October they're going to recalibrate the Special Drawing Rights.

Place your bets hehehe.

-Old Hickory