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Urban Survival Techniques – Black Market Shopping (#3)

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Urban Survival Techniques – Protect Yourself – Black Market Shopping (#3)
(continued from Urban Survival Techniques – Avoiding Trouble)
Editor’s Note: This urban survival technique from GT is about how it will be necessary for you to deal in the black market. The black market is actually the free market. Governments everywhere try to control free markets. That interference leads to the creation of black markets. In good times, black market activity is confined mainly to illegal products and activities such as drugs and sex. When chaos strikes, government will enact controls dealing with everything, which will create shortages of, and restrictions on, even legitimate products and services. This will lead to a massive increase in the black market. You will not be able to get many vital products and services in the legal or so-called white market; you will have to buy and sell in the black market.
DB
Here’s what GT has to say about the black market — the free market:
The most important and the the most civilizing activity in a society is trade. Free and open trade has brought untold benefits to everybody at large. Unfortunately, governments like to interfere with free trade and so you get black markets. When the dollar finally collapses because it is worthless fiat, you are going to see an explosive boom in black markets. It is the only way you will be able to accomplish urban survival.
You may not want to participate in the Black Market. You will have no choice. Right now (~2000) Argentinian citizens are only able to survive and get the food and other stuff they need by shopping in the black market. The banks are closed. A lot of people cannot get the money they deposited to pay their bills. They barter because things are so uncertain. There is a risk markup, the sort of markup associated with black markets.
You may have already shopped in the black market. If you have ever bought illegal drugs or sex, you’ve shopped in the black market. Those markets are extremely violent but there is an unwritten rule. You can kill your competitor or other dealers, but the customer must be protected from the violence. I judge this from my own observations. In the business district, every day at lunch, I see yuppie businessmen buying drugs. These people want drugs and are willing to pay big bucks. They do not want the violence that comes with the drug trade. They are so wimpy they could not mentally deal with the violence. The violence is handled far away from the customer view. So no violence. What happens is you have a very quick sale — so fast if you’re not looking for it, you’ll miss it. Someone drive up to somebody standing on a street corner and in less than 30 seconds, a trade has been made. Drugs for cash. This is one of the urban survival techniques that will expand in all products and services when the monetary and credit collapse creates chaos.
The black market will probably be more civil and polite than you probably imagine. Yes, the potential for violence, for being ripped off and worse is there, but I don’t think it will necessarily be a major factor.
What will the black market consist of? Mostly people will be buying food, medicines, and other necessities. They will spring up automatically. Let’s say the local supermarket has been cleaned out. The parking lot of that store will still be a place where people will meet and barter. The people of the neighborhood are used to going there to shop, so naturally it will turn into an open air market.
As it gets harder to buy things you need legally and openly, the black market will increase. In Italy, the black market has gotten so big, it probably would turn out to be 1/3 of the economy if you could count it accurately. Things you would expect to be handled in the white market, such as light manufacturing, gets done by hundreds of thousands of individuals working out of their garages. If you have a real good workshop, you can match the quality of any mass produced product and achieve quite an output. An example: The black market research division of the drug trade can match the best research labs in the world. The latest product is “roofies” (“rufies”, Rohypnol), also known as the “date rape” drug. No legitimate drug company would want to make such a product. They have enough problems with product liability. But, you can buy it on the street easily enough.
Roofies was probably a byproduct from trying to create cheaper and more effective drugs so you could get high. The research goes on in other areas, mainly to develop a version of cocaine that can be grown in the United States. It would bring in a whole new generation of drug abusers just as crack did. The advantage of crack for the user is that it is cheap, as forms of cocaine go. There is probably research going on by the drug trade as how they can use gold and silver. This happened a while back: I was watching a cop shake down a drug dealer. The cop took his cash, jewelry, almost everything. He didn’t take a gold coin, a Krugerrand, that the dealer had. The cop didn’t recognize it as gold and the dealer did some fast talking. He said it was nothing more than a cheap copper good luck charm. Since most people have not had the chance to see gold in coinage form since 1933, there is a high possibility they will think of it as copper instead of gold. Anyway, the cop, to show he wasn’t all bad, let the dealer keep his “Good luck” charm. Don’t think that dealer didn’t tell his friends about it. That means the drug trade has considered gold as a way to safeguard their money since no one recognizes it. Of course things may have changed and if you tried that today, the cops would probably take that coin along with everything else.
So what makes me think that sooner or later you will be involved in the black market? After all, most gold bugs have the wisdom to prepare far in the future buy not only buying precious metals but food and the things they need. There is also going to be the reluctance to break the law.
As I said in the beginning, trade is extremely important to your well-being. No matter how much you have prepared, you cannot have thought of everything you need and so you will have to trade for it. I can see you entering the black market in one of two ways. Either a medical need or to help your neighbors. A medical need does not have to be an emergency. You might think you should add to your survival disaster kit or to your survival first aid kit. You could need something as simple as just a bottle of aspirin. It is the simple things like that you tend to forget, that you forgot to put on your preparedness checklist, but if you need it, you really need it. If the stores are closed due to looting, how do you find it? It will be out there somewhere on the black market.
The next example that could get you into the black market is you want to help your neighbor. You have prepared but they haven’t. What is the best way to help them? From long experience, I learned it is best not to just give away things if you want to help somebody. You may have intended the help to be one time only. If you just give away stuff, the neighbor may expect to to helped whenever he needs it and things could get ugly. In the situation I envision, by trying to help your neighbor by giving away your stuff, you end up in front of the local commissar to explain why you not really a hoarder.
Trading with each other instead of giving charity will be better for the both of you. By trading, both of you will have to trust each other instead of it being a one-sided relationship where betrayal lurks. Neither you or your neighbor may have much to trade. The one thing you can trade however is mutual protection. You protect me from the looters, including the government, and I will protect you. It is a start. A start that build trust. The trust will be important because both of your lives, and the lives of your families, may depend on that trust. What better way to start trusting than by agreeing to protect each other?
When the economy collapses, it will take time for the black market to start up. That will be a very dangerous period. Since you have not had time to build up trust, how do you keep yourself safe? First, if you can — wait. Wait and watch to see how the black market develops. Like all markets, it will have ways of knowing who can trust and who you can’t. You will see in the beginning some people ripping other off. These people don’t realize that dealing in the black market is going to be a long-term relationship. For the rip-off artist they get a very short term advantage. Sooner or later, their greed will get them killed. Or no one will deal with them and they go hungry. You don’t want to be hungry in that situation. As in Africa, if you’re hungry, and if there is a famine, that means death!
Since both your life and the lives of the ones you will be dealing with are on the line, your word must become an absolute bond. Most people, and I am guilty of this too, make promises but fail to keep them. These are simple things like promising to call a friend or business relationship the next day. Or being on time for an appointment. I am becoming aware of doing this and so try not to do it. If you are in a situation where your life depends on your word, not keeping small promises is a very self defeating. It is very easy to promise these small thing. If you break the promise it is a very noticeable lapse of trust. Your life depends on who trusts you, so unknowingly, you could have thrown your life away. It gives others a very good excuse not to deal with you.
Another question: How do you know who to deal with? Before entering any deal, ask yourself: “Will I regret this?” If I have any doubt I try not to enter the deal. Another deal, another bargain, will always come along later. However, the regret you feel for making the wrong deal can last a lifetime. This is good advice not only when things are crashing around you but worth following today.
Last question: What if I get ripped off? In the black market, you do not have the options of getting refunds or having the seller make good in some way. For example, if you buy a bag of dope and it turns out to be talcum power, you been ripped off. The best thing you can do is take it as a learning experience and not deal with the seller again. Otherwise, if you seek recourse or revenge you open a can of worms. You will very likely encounter the violence of the drug trade. It is not worth your life to correct things.
I can’t foresee the future so my version of what it will be like to deal in the coming black markets may be accurate or may be wildly off. I just hope I gave you something to thing about.
Thank you.
The “Golden Trumpet”

by David Bean
Taken from Golden Trumpet’s Urban Survival Techniques: Protect Yourself

Editor’s Note: This urban survival technique is about how it will be necessary for you to deal in the black market. The black market is actually the free market. Governments everywhere try to control free markets. That interference leads to the creation of black markets. In good times, black market activity is confined mainly to illegal products and activities such as drugs and sex. When chaos strikes, government will enact controls dealing with everything, which will create shortages of, and restrictions on, even legitimate products and services. This will lead to a massive increase in the black market. You will not be able to get many vital products and services in the legal or so-called white market; you will have to buy and sell in the black market. Here’s what Golden Trumpet has to say about the black market – the free market:

–––––––––––––––––––––––––––––––––––

THE MOST IMPORTANT and the the most civilizing activity in a society is trade. Free and open trade has brought untold benefits to everybody at large. Unfortunately, governments like to interfere with free trade and so you get black markets. When the dollar finally collapses because it is worthless fiat, you are going to see an explosive boom in black markets. It is the only way you will be able to accomplish urban survival.

You may not want to participate in the Black Market. You will have no choice. Argentinian citizens were only able to survive and get the food and other stuff they needed by shopping in the black market. The banks were closed. A lot of people could not get the money they deposited to pay their bills. They bartered because things were so uncertain. There is a risk markup, the sort of markup associated with black markets.

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A snake eating its own tail

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A Snake Eating its Own Tail
By : James Howard Kunstler
I’d like to know what Barack Obama thinks he’s doing with the fiasco we call the US economy.  He can’t pump it back into the credit-fueled freak show it used to be, of course, but he could steer it in a practical new direction.  Even people who have lost a lot, and stand to lose more, can be motivated to behave more self-beneficially. The president doesn’t have very long before his economic problems become really awful political problems.


The current mass delusion that will go down in history as the “green shoots fugue” can’t possibly bring the credit freak show back because the credit — i.e. money borrowed from the American future — was swindled away.  Something like $14 trillion worth of nominal dollars is being sucked into a cosmic vortex never to be seen again.  It was last seen in the spectral forms of so many collateralized debt obligations, credit default swaps, so-called structured investment vehicles and other now-obvious frauds.  That giant sucking sound we hear means the process is still underway, and the “money” disappearing into yawning oblivion will out-pace any effort orchestrated by the Federal Reserve and the US Treasury to replace it with new “money” (or credit).  Therefore there is no chance between heaven and hell that the pre-2008 suburban homesteading and shopping fiesta can ever come back. The American polity is tapped out in all sectors, personal, corporate, and public.


Notice the two words largely absent from whatever public discussion exists around these matters — “swindle” and “fraud.”  The reason they’re missing is because if they happened to enter the conversation, something would have to be done about them, namely investigations and prosecutions. The president is the person in the best position to set the terms of this public discussion, and by avoiding these two words he’s blowing the chance to begin the process of correcting the tragic course we’re on.


These swindles and frauds range from malfeasance at the highest levels to indecency in the lowliest cubicles — i.e. the collusion of a revolving cast of cabinet-level officials with Wall Street executives to loot the US Treasury, the probable criminal dereliction at the mid-level of agencies like the Federal Reserve’s oversight office and the SEC, to certain and outright street grifting in the traffic of securities known to be worthless at their creation. The current fiction that the public seems to be swallowing (for the moment) is along the lines of the old “mistakes were made” locution, which is an easy way to avoid holding individuals responsible for misdeeds.   


The competence and hence the legitimacy of the US government is on the line here. The US economic situation is going to get a lot worse. Many more people are going to lose incomes and chattels and will suffer, and the moment will arrive when they will direct their anger outward.  They need to be told two things:  that the borrowed-against future is now here, requiring very different  behavior; and that those who received lavish payment for looting the American future unlawfully will be subject to due process of law. So far, nobody has even been fired, let alone officially investigated.


Meanwhile, the nation is lumbering toward an epochal moment of truth when the non-viability of how we get by day-to-day is exposed for all to see, including those other nations who have been lending us colossal sums of their hard-earned money to keep our operations afloat. This will be the moment when the US renounces its debt — or just proves unable to continue pretending to service it.  This moment is liable to come sometime after the middle of this summer. It will be the moment when all the green shoots babytalk stops and the scope of onrushing hardship becomes self-evident. It will be the moment when all of America finds itself in something like the aftermath of Hurricane Katrina, when the federal government proves comically impotent and the cold reality hits that we’re now all on our own.


If it comes to that, I will be sorry to see Barack Obama in the goat-leader role formally occupied by George W. Bush. I voted for Mr. Obama mainly because I thought he had the capacity to tell the public the truth and inspire them to move forward out of childish indulgence into a more rigorous and challenging way of life consistent with the mandates of reality. I’m still not convinced that he’ll fail at this, but time is growing awfully short.


The dreadful moment may arrive with the functional bankruptcy of California, which is on-schedule, as it happens, for July.  Governor Schwarzenegger, who really seems to have tried introducing fiscal reality out there, and just plain failed, will surely come to the White House begging for a bail-out.  It would be hard for President Obama to turn him down, but then forty-nine other governors will line up behind Arnold and everybody in the world will see what a farce our governance has turned into: a snake eating its own tail.
James Howard Kunstler

by James Howard Kunstler
www.kunstler.com/

I’D LIKE TO KNOW WHAT BARACK OBAMA thinks he’s doing with the fiasco we call the US economy. He can’t pump it back into the credit-fueled freak show it used to be, of course, but he could steer it in a practical new direction. Even people who have lost a lot, and stand to lose more, can be motivated to behave more self-beneficially. The president doesn’t have very long before his economic problems become really awful political problems.

The current mass delusion that will go down in history as the “green shoots fugue” can’t possibly bring the credit freak show back because the credit – i.e. money borrowed from the American future – was swindled away. Something like $14 trillion worth of nominal dollars is being sucked into a cosmic vortex never to be seen again. It was last seen in the spectral forms of so many collateralized debt obligations, credit default swaps, so-called structured investment vehicles and other now-obvious frauds. That giant sucking sound we hear means the process is still underway, and the “money” disappearing into yawning oblivion will out-pace any effort orchestrated by the Federal Reserve and the US Treasury to replace it with new “money” (or credit). Therefore there is no chance between heaven and hell that the pre-2008 suburban homesteading and shopping fiesta can ever come back. The American polity is tapped out in all sectors, personal, corporate, and public.

Notice the two words largely absent from whatever public discussion exists around these matters – “swindle” and “fraud.” The reason they’re missing is because if they happened to enter the conversation, something would have to be done about them, namely investigations and prosecutions. The president is the person in the best position to set the terms of this public discussion, and by avoiding these two words he’s blowing the chance to begin the process of correcting the tragic course we’re on.

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Written by aurick

25/06/2009 at 10:25 am

An ingenious plan to pay all debts

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An Ingenious Plan to Pay All Debts
BY RICK ACKERMAN ON JUNE 22, 2009 12:01 AM GMT · 35 COMMENTS
With the U.S. sinking hopelessly into a black hole of debt, and households facing an avalanche of tax hikes that will at best postpone the nation’s day of bankruptcy, we are all hard-pressed at this point to see a way to a happy ending. Lo, along comes an anonymous e-mail that describes a way to solve everyone’s debt problems painlessly. If you think the plan can work, I would urge you to forward it to your congressmen. But if you see a fatal flaw in the logic, please drop by the Rick’s Picks forum to explain. The forum can be accessed by clicking on the word “Comments” under the headline on today’s commentary.  Here’s the magical plan to cure America’s”Accounts Receivable Crisis”:
“It is the month of August, on the shores of the Black Sea . It is raining, and the little town looks totally deserted. It is tough times, everybody is in debt, and everybody lives on credit.
”Suddenly, a rich tourist comes to town.
”He enters the only hotel, lays a 100-euro note on the reception counter, and goes to inspect the rooms upstairs in order to pick one.
”The hotel proprietor takes the 100-euro note and runs to pay his debt to the butcher.
”The butcher takes the 100-euro note and runs to pay what he owes the pig farmer.
”The pig farmer takes the 100-euro note and runs to pay his debt to his supplier of feed and fuel.
”The supplier of feed and fuel takes the 100-euro note and runs to pay his debt to the town’s prostitute that, in these hard times, proffered her ’services’ on credit.
”The prostitute take the 100-euro note and runs to the hotel to pay for the rooms she rented when she brought her clients there.
”The hotel proprietor then lays the 100-euro note back on the counter so that the rich tourist will not suspect anything.
”At that moment, the rich tourist comes down after inspecting the rooms, takes the 100-euro note off the desk, tucks it back into his wallet, and explains that he did not like any of the rooms. He then leaves town.
”No one earned a penny. However, the whole town is now without debt and looks to the future with great optimism.
”And that, ladies and gentlemen, is how the United States Government is doing business.”
Come to think of it, that is almost exactly the way Uncle Sam is handling the debt problem. Your comments are welcome at the forum.

by Rick Ackerman
Posted 22 June 2009

100euronoteWITH THE U.S, SINKING HOPELESSLY into a black hole of debt, and households facing an avalanche of tax hikes that will at best postpone the nation’s day of bankruptcy, we are all hard-pressed at this point to see a way to a happy ending. Lo, along comes an anonymous e-mail that describes a way to solve everyone’s debt problems painlessly. If you think the plan can work, I would urge you to forward it to your congressmen. Here’s the magical plan to cure America’s “Accounts Receivable Crisis”:

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Written by aurick

23/06/2009 at 10:59 pm

Posted in Banking, Financial

Tagged with ,

No gold, no bullets: now it’s personal

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No Gold, No Bullets: Now It’s Personal
By: John Rubino, Dollar Collapse

– Posted Monday, 22 June 2009
Facts have a different feel when they’re personal. And speaking personally,  evidence that Americans are seriously spooked is starting to pile up. In the past few months:

• While researching a magazine article on offshore investing I interviewed Erica Nolan, executive director of the Sovereign Society, a Florida-based consultancy. She noted that her client base is changing: “Historically, offshore solutions have been reserved for very high net worth individuals. But starting in about 2001 we started to see people in the ‘mid-tier millionaire’ stream — $1 million to $30 million net worth — saying ‘I’ve worked really hard, I don’t want to have my assets at risk.’ Most recently we’ve been seeing a big demand from Americans saying ‘I just want to put $100,000 or $500,000 offshore. I’m reporting it; it has nothing to do with taxes.’ It’s just asset safety at this point.”

• My father-in-law decided he wanted some gold, so I called a local coin store and asked Kevin, the shop’s owner, to find us some Krugerrands. He predicted a few weeks for delivery, which seemed reasonable given the chatter about tight supplies, so I placed an order and wrote a big check. That was three months ago, and the coins still aren’t in. I called Kevin the other day and found him both busy and frustrated. “I could make a million dollars this year if I could only get inventory,” he said. “This would be a career year.” He apologized for the long wait and said there were now only a few people ahead of us on the list.  

• I checked in with a friend, a business owner and semi-professional poker player just back from a Seattle gambling trip. But instead of talking poker or kids we toured his stash of freeze-dried food and his growing arsenal that includes a Dirty Harry-style 44 magnum pistol and a very cool black pump-action shotgun. This guy is well-educated, well-traveled, and well-off, and he’s preparing to blow away looters from his bedroom window. 

• My 11-year-old son Alex and I stopped by a local gun store. This is going to be a “skills acquisition” summer in which we learn to ride horses, handle guns, and change a bike flat (and when I finally learn to Salsa) so we had some general questions for Charles, the gun shop owner, about gun safety classes and which rifle is the best starter model. Charles said our selection was limited: It seems that there’s a run on ammo, and he can’t guarantee anything more than low-velocity 22 caliber bullets. When we got home I did a quick Google search for “bullet shortage” and sure enough, that market looks just like those for gold and silver coins, with demand swamping supply, long waiting lists, and panicky hoarding. 

It’s no secret, of course, that small-denomination bullion is hard to come by and gun sales are way up, but finding out first-hand that this stuff is unavailable brings home the reality of the situation, which is that the social mood is growing darker. On the surface everything looks normal; no one is protesting in the streets, the trash is getting picked up, and elections are as orderly as ever. But the market is quietly reallocating resources as individuals insure against a systemic breakdown. Hope those Krugerrands come soon.
BUY OFFSHORE GOLD AND SILVER AT GOLDMONEY
— Posted Monday, 22 June 2009 | Digg This Article | Source: GoldSeek.com

by John Rubino http://www.dollarcollapse.com
Posted Monday, 22 June 2009

FACTS HAVE A DIFFERENT FEEL when they’re personal. And speaking personally, evidence that Americans are seriously spooked is starting to pile up. In the past few months:

• While researching a magazine article on offshore investing I interviewed Erica Nolan, executive director of the Sovereign Society, a Florida-based consultancy. She noted that her client base is changing: “Historically, offshore solutions have been reserved for very high net worth individuals. But starting in about 2001 we started to see people in the ‘mid-tier millionaire’ stream – $1 million to $30 million net worth – saying ‘I’ve worked really hard, I don’t want to have my assets at risk.’ Most recently we’ve been seeing a big demand from Americans saying ‘I just want to put $100,000 or $500,000 offshore. I’m reporting it; it has nothing to do with taxes.’ It’s just asset safety at this point.”

• My father-in-law decided he wanted some gold, so I called a local coin store and asked Kevin, the shop’s owner, to find us some Krugerrands. He predicted a few weeks for delivery, which seemed reasonable given the chatter about tight supplies, so I placed an order and wrote a big check. That was three months ago, and the coins still aren’t in. I called Kevin the other day and found him both busy and frustrated. “I could make a million dollars this year if I could only get inventory,” he said. “This would be a career year.” He apologized for the long wait and said there were now only a few people ahead of us on the list.

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Let’s talk about… inflation

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International Forecaster June 2009 (#6) – Gold, Silver, Economy + More
By: Bob Chapman, The International Forecaster
Posted Sunday, 21 June 2009 

The following are some snippets from the most recent issue of the International Forecaster.  For the full 29 page issue, please see subscription information below.
US MARKETS
Since hyperinflation is clearly in our future, let’s talk about what inflation really is, what causes it, what the different degrees or levels of inflation are, and what it takes to put a stop to inflation?
By modern definitions, inflation is basically an overall increase in the prices charged for goods and services in a particular economy over time. This is a pretty simple concept, but there is some real confusion as to what the root cause of inflation is.  It does not come from people willy-nilly charging more for their goods and services.  People can raise prices all they like, but if there is not enough money and credit available to purchase their goods and services at the prices they are charging, they will eventually have to either lower their prices, or expect to make far fewer sales.

          What you have witnessed for the past two years is the above concept in overdrive, especially in the real estate and automobile markets, as the supply of money and credit has greatly contracted for all but the anointed Illuminist institutions that are parking their profits and bailout money at interest with the Fed for fear that they might lend it out to a zombie financial institution or business corporation and never get it back.  As their money is sidelined with the Fed to sterilize it (i.e. to keep it from stoking inflation) the smaller fry who depend on them for their supply of financial capital are being allowed to die of money and credit starvation so the anointed can purchase the most valuable parts of their financial carcasses at pennies on the dollar via bankruptcy auctions and fire-sales in a blatant attempt to eliminate their competition and consolidate their power.  This deflationary contraction in the supply of money and credit due to the exposed loan, mortgage and derivative fraud is a strong undertow to our economy which threatens to drag it out to sea until it runs out of air and drowns.  The Fed must therefore inflate and swim for shore, or die.  And inflate they will.  We can absolutely guarantee it.  Obama will go down in history as the King of Stagflation, as he joins forces with the inimitable Gordon Brown, the King of Fire-Sale Gold.
On a microeconomic scale, prices for specific goods and services are usually set by supply and demand (that, of course, would be in a free economy which we no longer have, so manipulation becomes an input for pricing specific goods and services in our economy, and is sometimes even the main input, as with gold and silver prices).  However, the microeconomic factors which determine prices for goods and services are by far trumped by the macroeconomic factors of supply and demand.  The supply side on a macroeconomic scale is determined by the amount of goods and services that are produced for sale in the overall economy.  The demand side on a macroeconomic scale is the amount of money and credit available to the overall economy with which those goods and services can be purchased, or expressed another way, the amount of money and credit that is available to chase after those goods and services.
This is why the price of gold and silver must eventually skyrocket. The microeconomic supply, demand and manipulation factors which currently have sway over gold and silver prices will eventually be trumped by the macroeconomic factors, namely, a profligate increase in the supply of money and credit to unheard of levels which will drive prices up across the board.  The Fed cannot suppress the price of all goods and services as it rampantly expands the supply of money and credit, and can only influence a chosen few, such as gold and silver, which are suppressed because they are the canaries in the coal mine.  When everything else gets more expensive, and as fiat currencies are shown to be the “worthless paper” they really are, gold and silver will become the only real safe-havens from the resulting inflation and financial deterioration.  That will then generate a demand for precious metals that is so great, it will drive the price of gold and silver up until they catch up with the overall supply of money and credit, and there is nothing the Fed can do to stop it, short of pulling the plug on money and credit and destroying our economy, along with the privately owned Fed itself and its Illuminist cronies with it.  This eventual destruction is planned to be sure, in order to pave the way for a one world Orwellian police state.  The trick for the Illuminists is how to get out of their paper assets and convert them to real assets on the cheap before pulling the plug on money and credit.  The problem is that as they bail out of paper, and into tangible assets, along with other foreign creditor nations anxious to trade their “worthless paper” in for things of real value, their bailing activities will drive inflation, and the price of gold, silver and other tangible assets, to unheard of levels, thereby dramatically decreasing the amount of tangible assets that they can absorb with their dollar reserves and their sales proceeds from the dumping of paper assets.  The US and its creditors will be competing with one another in the race to dump dollar-denominated paper assets in exchange for precious metals, commodities, real estate, factories and equipment and other tangible assets, as well as shares in companies which own such assets, including shares in gold and silver producers.

          The obvious answer is, of course, that they can’t pull this off on the cheap, and they will use the resulting hyperinflation to wreck the rest of the economy while they are desperately attempting to bail out of dollar-denominated paper assets behind everyone’s backs, as part of their Big Sting Two criminal enterprise.  They will attempt to accomplish this insider trading scam in secret through unregulated dark pools of liquidity such as Project Turquoise and Baikal, as well as through the unregulated gambling casino which some dare to call the OTC derivatives market.  They will use their sales proceeds to buy all the real, tangible assets they can get their hands on and leave everyone else holding a bag full of “worthless paper,” aka Federal Reserve notes, US Treasury bonds and GSE bonds.  But the amount of “worthless paper” is so great, and there are so many substantial players who will be trying to do the same thing, that market chaos will result, and the paper assets will deteriorate, and the price of tangible assets will simultaneously appreciate, at a rate that leaves everyone breathless.  Truly, this will be a situation where he who loses the least, and he who buys gold and silver and their related shares early on, are the ultimate winners.  The biggest losers will be those who fail to take physical delivery of their precious metals, such as gold and silver ETF shareholders and holders of mint certificates, who will be thoroughly Madoff’d, as well as holders of any leveraged gold and silver futures positions who will be wiped out by manipulations before the final run-up, thus losing all their investment capital.
The elitist oligarchs who run America, Canada and Western Europe and their privately owned central banks own tens of thousands of tons of gold already, and will seek to take the proceeds from the sale of their paper assets and use them to increase their gold holdings in an attempt to maintain monetary dominance over major players like China and Russia, who will also attempt to add to their holdings by many thousands of tons.  There is only so much gold to go around, and when all the big players become gold bugs themselves, gold, and also silver, will go ballistic.  They want the gold mine (literally), while you get the shaft.  That is, has been, and always will be, “The Plan.”  Bernanke and Geithner are now Obama’s twin Tattoo’s, with our apologies to the producers of “Fantasy Island,” a show which has become a perfect metaphor for what the US economy with its so-called “Green Shoots” has become.  De plan, boss, de plan.  De plan indeed.
On a technical macroeconomic basis, an economy suffers from inflation when the amount of its total money and credit available over a period of time (the demand) grows at a rate in excess of the rate of growth in its total value of goods and services produced over that period of time (the supply), which valuation is based on price levels in effect at the beginning of that period of time.  In more simple terms, inflation occurs when the rate of expansion of the supply of money and credit exceeds the rate of expansion in the production of goods and services.  In fact, in the past when we still had a modicum of integrity in measuring economic statistics, inflation was defined as an increase in the supply of money and credit, period.  Higher prices were simply a symptom of inflation, not a definition of inflation.  The supply of money and credit was what was inflated, not the prices of goods and services, which simply rose as a direct outcome of the inflated supply of money and credit.
Since central banks are currently in control of the supply of money and credit in most modern economies, it is the bankster-gangsters who are, ergo, solely responsible for any overall increases in inflation, and that goes double for any large increases.
In the US, the privately owned Fed plays the role of our central bank, and it presides over our nefarious banking system, which is a fiat-money, debt-based, European form of fractional reserve banking that once powered the British mercantilist system.  All major US inflationary issues and debacles can therefore be squarely placed at the doorsteps of the Fed, and of our Treasury Department, which is little more than a doormat for the Fed, which together with Wall Street, runs a revolving door with the Treasury.  In fact, our current Treasury Secretary is the former President of the New York branch of the Federal Reserve Bank.  So much for checks and balances and avoidance of conflicts of interest.
We now have the Fed increasing total money and credit (M3) at a rate of 18% while our GDP is contracting at a rate of minus 6%.  That is a 24% differential, and that means that the amount of goods and services being produced has an ever-growing supply of money chasing after it, money and credit that is growing at a pace that is 24% more than the pace at which goods and services are growing.  Based on all the foregoing, we’ll give you three guesses as to what the outcome will be somewhere down the road when the Fed’s ever-burgeoning money blob starts chasing after a shrinking supply of goods and services.
Inflation comes in basically three varieties.  Normal inflation, which is basically harmless, is a temporary increase in prices caused by an increase in the supply of money and credit by the central bank which is intended to precisely anticipate the rate of growth in the production of goods and services.  You have more money and credit, but you also have more goods and services being produced. The temporary bout of minimal inflation caused by the anticipatory increase in the supply of money and credit is offset or absorbed by the greater pile of goods and services that is accumulating, so prices remain stable over time.  This is obviously not an exact science, so there are some up-ticks if the money supply grows a little too fast, but over time this can be corrected.  It is best to overshoot a little so as not to start an economic contraction, which, if left unchecked, could lead to a recession or depression.
The next type of inflation we would characterize as elevated inflation.  This is what we have currently at a rate of about 10% and growing.  This type of inflation results where the central bank consistently grows money and credit at a rate far in excess of the rate of growth in the production of goods and services, measured in terms of GDP growth, over an extended period of time.  What the Illuminati have done for over 20 years now, was to have the Fed, which they privately own, raise the level of growth in the supply of money and credit to ludicrous levels, while they simultaneously ordered their lackeys at the BLS to lie about the rate of the resulting inflation by using hedonics (statistical manipulations) that were intended to greatly understate inflation.         As a result, when real GDP was calculated, the GDP deflator, which is based substantially on the official (and falsely low) rate of inflation, and which is used to calculate real GDP, was obviously far too low.  This farce resulted in higher levels of real GDP than were warranted by the data, because inflation was not being properly taken into account.
This is how they covered up the destruction of our economy via free trade, globalization, off-shoring and outsourcing, along with both legal and illegal immigration (slave labor).  If the true figures were used, our real GDP would show that the rate of growth in our economy has been virtually flat to negative since 1990.  That means all the growth in our stock markets since the early 1990’s has been nothing but false puffery, which resulted from profligate growth in the supply of money and credit, and not from growth in production.  For this reason, when the Dow finally bottoms, we expect it to track back to its levels during the early 1990’s, which means roughly 2,500 to 3,500.  That level will destroy everything, especially the wealth of our middle class, but the elitists themselves are going to take it on the chin.  They are afraid the system will implode before they can bail, and that they will go down with the ship also.  We wholeheartedly confirm their fears.

By Bob Chapman, The International Forecaster
http://news.goldseek.com/InternationalForecaster
Posted Sunday, 21 June 2009 


PART ONE Part Two will be posted mid July

SINCE HYPERINFLATION IS CLEARLY in our future, let’s talk about what inflation really is, what causes it, what the different degrees or levels of inflation are, and what it takes to put a stop to inflation?

By modern definitions, inflation is basically an overall increase in the prices charged for goods and services in a particular economy over time. This is a pretty simple concept, but there is some real confusion as to what the root cause of inflation is. It does not come from people willy-nilly charging more for their goods and services. People can raise prices all they like, but if there is not enough money and credit available to purchase their goods and services at the prices they are charging, they will eventually have to either lower their prices, or expect to make far fewer sales.

What you have witnessed for the past two years is the above concept in overdrive, especially in the real estate and automobile markets, as the supply of money and credit has greatly contracted for all but the anointed Illuminist institutions that are parking their profits and bailout money at interest with the Fed for fear that they might lend it out to a zombie financial institution or business corporation and never get it back. As their money is sidelined with the Fed to sterilize it (i.e. to keep it from stoking inflation) the smaller fry who depend on them for their supply of financial capital are being allowed to die of money and credit starvation so the anointed can purchase the most valuable parts of their financial carcasses at pennies on the dollar via bankruptcy auctions and fire-sales in a blatant attempt to eliminate their competition and consolidate their power.

This deflationary contraction in the supply of money and credit due to the exposed loan, mortgage and derivative fraud is a strong undertow to our economy which threatens to drag it out to sea until it runs out of air and drowns. The Fed must therefore inflate and swim for shore, or die. And inflate they will.  We can absolutely guarantee it.  Obama will go down in history as the King of Stagflation, as he joins forces with the inimitable Gordon Brown, the King of Fire-Sale Gold.

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Ten things you should and should not do during Deflation

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by Robert Prechter
President, Elliott Wave International Posted June 19, 2009
http://www.financialsense.com

1) Should you invest in real estate?

Short Answer: NO
Long Answer: The worst thing about real estate is its lack of liquidity during a bear market. At least in the stock market, when your stock is down 60 percent and you realize you’ve made a horrendous mistake, you can call your broker and get out (unless you’re a mutual fund, insurance company or other institution with millions of shares, in which case, you’re stuck). With real estate, you can’t pick up the phone and sell. You need to find a buyer for your house in order to sell it. In a depression, buyers just go away. Mom and Pop move in with the kids, or the kids move in with Mom and Pop. People start living in their offices or moving their offices into their living quarters. Businesses close down. In time, there is a massive glut of real estate.

2) Should you prepare for a change in politics?

Short Answer: YES
Long Answer: At some point during a financial crisis, money flows typically become a political issue. You should keep a sharp eye on political trends in your home country. In severe economic times, governments have been known to ban foreign investment, demand capital repatriation, outlaw money transfers abroad, close banks, freeze bank accounts, restrict or seize private pensions, raise taxes, fix prices and impose currency exchange values. They have been known to use force to change the course of who gets hurt and who is spared, which means that the prudent are punished and the thriftless are rewarded, reversing the result from what it would be according to who deserves to be spared or get hurt. In extreme cases, such as when authoritarians assume power, they simply appropriate or take de facto control of your property.

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Written by aurick

21/06/2009 at 12:13 pm

Constitution Avenue’s Nightmare

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Constitution Avenue’s Nightmare
By Roger Wiegand
Jun 18 2009
“President Barack Obama said on Tuesday that worrying about the U.S. government’s finances keeps me awake at night” and the country needed to start planning now to tackle soaring deficits.” -Reuters
Yes, Mr. President we agree. However, you are totally on the wrong path by implementing an FDR-like fiscal destructive nightmare. With a soaring debt-to-GDP ratio, we saw big trouble when the numbers went past 6% but are now heading toward 12%. Historically, no nation, after ruining their finances past the 6% number has ever been able to find a normal recovery. The U.S. won’t either and they are instrumental in taking down Asia and Europe with all the Americas from Brazil all the way to Canada.
Columnist Mona Charen has told us, “The entitlement mentality so carefully cultivated by liberal academics, politicians, clergymen, and journalists continues to corrode the self-sufficiency that once defined the American character.”
Mr. Alan Greenspan spawned the technical Nasdaq stock bubble that blew-up in 2000 when all markets should have endured an identical correction. Instead, Mr. G. moved swiftly lowering interest rates and tossing gobs of cash at big banks. In the hollow, er, hallowed halls of congress his persona was redeemed. Nobody with half a brain (many half brains reside in congress) could understand what in the world the Greenman was saying anyway. We are not so sure he did either. However, this is the kind of corrosive economic policy so damaging to character and country as Ms. Charen has told us.
When bankers have the cash what do they do? They loan it, spend it and worst of all moved it into derivative land where most lenders previously feared to tread. Instead of a shorter term and less nasty recession we are getting a prolonged Greater Depression II. This one will be the mother of all big ones with a distinct potential for giving us a one in 300 years cataclysmic catastrophe.
On normal cycles, the 70 year K-Wave was right on time in the year 2000. We’ve seen various expressions of K-Wave cycle times but ours says its every 70 years. Thus, 1929 plus 70 is 1999; just when the big smash was to be found. It hit on a perfect beat as Mr. Nasdaq took a heroic smash.
This was distinctly unpalatable for Mr. G, and his other Federal Reserve Cabal Members and those New York banksters. With almost invisible interest rates, global banks had a reckless lending-spending field day. Take a minute and think. How did those super-rich hedgies, bankers, and other fund managers get so much money so fast? It’s quite obvious in a simple review of the past ten years. It used to be hot stuff when a guy became a multi-millionaire. Now we’ve got multi-billionaires regularly worshiped in the halls of New York lenders and on daily CNBS news. Pirates and robber barons have reached a lofty new high within their respective vocations of stripping fund cash.
Normal lending was not good enough for these boyz. Instead they invented derivatives of all stripes giving them exotic names old-time country bankers could not even imagine let alone pronounce or spell. As we all know, markets go up and they go down. When the rubber band is overstretched the snapback is inevitable. This is the normal trading and investing routine and must be expected.
However, this time, due to a superman stretch, the snapback was so swift and vicious, it tore their little banker heads-off and cut-off their fiscal legs at the same time. In hindsight we would have rather taken the big bank smash and its terrible aftermath. Now it’s us working dolts who are faced with decades of pain paying for the market antics of rich criminals in New York and Washington.
What we get is a 10-20 years of dripping economic water torture with unimaginable pain for all.
After watching top business leaders in nearly a lifetime of observation, we now see these CEO wusses caving-in to Uncle Sam Obama, forgetting about their shareholders, or in fact paying any attention to normal business operations. Instead, they pander to politicians with tin cup in hand, force-feeding themselves with the next government give-away program staying alive, keeping lofty personal perks, hoping to escape this tragedy with a hot pension and all the benefits going with it. As for you and me, we can eat cake or maybe dog food.
Market Hopes And Wishes Spring Eternal
It’s nice to be positive and believe or not we are quite positive on a daily basis due our engaged outlook for the special kind of contrarian investing and trading we recommend. However, we are realistic and will trade either long or short; taking whatever Mr. Market will offer. In that realistic vein, let’s review some cold hard facts and clarify our short, intermediate and longer range thinking.
The funds, fund managers, hedgies, banksters, congress, and Federal Reserve along with all of their other minions, buddies and buddettes, tell us all is well, buy now and buy often as we are in for the long pull. And of course, you know wide-spread diversification and buy and hold forever really is the best approach. Ask Warren Buffet the world’s champion buy-and-hold guy who lost -40% in 2008.
It’s the best approach if you choose to toss hard-earned cash into the stinking swamp of investments designed to pay huge fund fees, commissions and bonuses. Where is your yacht? Where is your McMansion? Where is your pension? Those crooks got it all and worse yet are still busy taking more!
Of course this plan is best; just like those broken-dreams of 25 long years from 1929 to 1955 taking late 1920’s investors forever to entirely recover. Thousands of those formerly solvent investors and wage-earners died as paupers before Mr. Market reappeared with vigor in the 1950’s. Is that where you are going?
Ain’t No Silver Lining Except In Pure Gold And Silver
1. Keep in your mind the major fact that mainstream market pundits and stock-pushers must be invested, or their investors pull-out. If they pull out its adios personal gains. Many of them know of the forthcoming disaster but deliberately invest-trade anyway encouraging more Sheeple to contribute. Gotta earn those big fees to feed the McMansions, yachts and private jets. Momma demands big diamonds and jewels, and vacations. Also, do not forget the private schools for kids and the hired help. It’s very important to keep up with the Joneses, Clintons, Greenspans and of course the Obamas. Keep sending in the money you suckers.
2. This is the system. This is the game. This also represents 90% or more of all players. This is why we are in the tiny minority and why our ideas are so reviled. Gold and silver and other contrarian investments ruin mainstream trading and investing ideas. We are the antithesis of the way the New York trading dudes and dudettes prefer you to think and behave. The juxtaposition of our ideas versus theirs makes us their trading enemy. This is why the top three, global Big-Boy-Banks gang-up on us periodically and short gold. Have patience; they will lose big time. Nobody can corner a market. Ask the Hunt brothers about trading silver.
3. The best and largest successful mainstream fund I know of last year posted +60% gains. Almost all of their trades were shorting credit, banks and financials as well as some individual shares and short-only ETF’s. This success flies in the face of those comprising the larger majority. Those derivative origination gang members prefer you should not know this.
4. Since the largest majority controls the US Congress, Treasury, Federal Reserve and most of the get-in-line-or-else-media, most Sheeple still do not get it. When they finally do, it’s Hi-Ho silver and gold with a vengeance as new buyers pile in disregarding failed trading ideas.
5. In our camp, we all watch the US Dollar’s direction for signals on our stuff. Be careful with this. As foreign nations and their residents dump domestic debts and trades, they do so mostly in dollars. This tends to support our very weak and over-printed dollar creating temporary USDX rallies. This also tends to fool participating traders. The dollar should be crash selling but there are other more powerful mitigating factors propping it up. Watch this carefully and consider gold and silver can rise right along with the dollar; temporarily.
6. We are not fans of shorting gold and silver bull markets during pullback, profit-taking corrections. This can be done but you better be a pro and be fast on the buy-sell button.  Rather, our choice is to use faster, short-selling share’s ETF’s. Trade and invest in gold and silver shares, on the long side using ETF’s, futures, options and spreads. Buy physical first.
7. The stronger (temporarily) dollar will create shorter term selling in commodities including gold and silver in mild and normal corrections. The current event, now in process, could take gold back to $850 as a maximum low in our view. Could it be worse; yes of course but we doubt it.
8. Our primary concern for now is the potential selling and profit-taking on senior and junior precious metals SHARES. Many of our readers are share traders and investors exclusively. With this view we get either a hard or soft shares sell, and you can (A) sell them all; (B) sell half and keep half; (C) hang-on, get a grip, and stay in for the longer view understanding you can potentially get either a mild hit, or nasty one like last year. It’s your choice, but protect gains if possible and for heaven’s sake stay watchful as trading speeds-up in all markets.
9. When you find a good short in most markets and its works per your plan, the event is usually 2-3 times faster than sitting long in a rally. These can be fun but plan your entire entry, trade management and exit strategies all before you install new positions. Making critical trading decisions on the fly in the middle of mayhem creates mistakes. Stick with your plan.
10. We’ve got a near bearish double top in gold right now. Does this mean this is the end of this longer view trade? Absolutely not. We personally recommend and hold gold positions out to December, 2009 and are looking for more. All markets in rallies climb in steps and stairs. Do not be out when the big one takes-off, which could be later this year. We think once gold decisively cracks the price sound barrier at 1050, we should be moving up faster than the recent 15% annual average over the past few years.
11. Mainstream press China news is quite inaccurate. A current false commodities bull in base metals and related others is mere stock-piling. The plan is to pay cash now for future needs and more importantly dump US dollars and maybe even trade commodities for Chinese-held US bonds and notes. China knows they must dump this sinking US paper as fast as possible. Their current commodities rally is a false flag composed of restocking materials; not actual current demand for manufacturing, construction, or other normal, positive building of things.
12. When Chinese stockpiling stops the music stops on base commodities. Food, gold, silver, platinum and others in demand (in lieu of money) will skyrocket. These are the “go-to-must-have-real-items for mandatory needs. You gotta eat and must have real cash not fiat cash.
13. China needs grain, coal and other related food items. Weather is bad over the world and food supplies are way too low. These special rallies are for real as China and Japan are buying wheat wherever they can without driving prices too high. China is also buying soybeans.
14. China is now the world’s largest gold producer and they are not only not selling any but are buying more from others over the world. What does that signal?
15. Chinese bailout money was tossed with central planner impunity much faster than Obamanomics. All it did was buy some time and stockpile stuff. Their factories are closing in droves just like in Japan who is sinking even faster. Keep this one in mind: If the American consumers are broke and have quit buying Asian stuff, who will buy their export goods to keep their game afloat? The answer is nobody; and it’s all sliding faster. Some are forecasting Asian civil wars. We hope not but are beginning to wonder how they avoid it.
16. The Chinese economy is only 25% of the US’s and their exports fell the most in 13 years according to the Wellington Letter. Does that sound like good times just ahead? We say this is desperation just like all the Hail Mary TARP passes thrown by Geitner, Chopper Ben and their congressional free-cash-for-all lackies. I cannot wait for the 2010 election. This one is going to be better and more fun than the Super Bowl. Some suggest it would be outstanding if all congressional incumbents were losers and we had a new political party dedicated to the U.S. Constitution, freedom and the Bill of Rights. What we’ve got instead is the Bill of Wrongs.
17. One key measure of economic activity is production capacity. The less there is the better the economy to a point. As of this time cycle, we are seeing severe idle capacity world-wide reaching 1930’s depression levels not seen in decades. This will not change overnight.
18. Another critical measure of global growth or lack thereof is the automobile and truck industry. Our primary guideline is the very well managed Toyota Corporation now probably number one in the entire world. Last report we saw was their sales are off -40% and they lost $8 Billion in one quarter. If this is the best managed and most productive auto builder what is the condition of the rest of these auto companies?
19. Crude oil, natural gas and coal are mostly over-supplied for the shorter term and could stay that way for some time as the depression deepens. However, on the flip side, crude oil fundamentally is going short as major fields slowly decline. Mexico’s big one going dry is a major event. Yet, new larger reserves of natural gas have been discovered in Louisiana and Mississippi. Next the huge Bakken fields in the U.S. Dakotas, while being ten years from production, offer a major discovery. Coal demand has flattened but remains supported. The green guys and gals represent only 2% of all US energy for years. Solar, wind and gophers on treadmills won’t cut it. For all their new noise this one is nothing compared to traditional fuels. Oil is firm at $70 and should probably go higher as the traders go carefully long.
20. In the 1930’s event there were no less than six major share market moves up and down. With each new rally hope sprang eternal only to be crushed once again in following markets’ failures. So far we count only two. If history repeats we have at least four more and it could go beyond that cycle depending upon how much stupidity congress and the administration impose on us. We think the worse it gets the more frenzied, crazy moves are instigated by these mindless dolts. How about 8-10 more cycles and 20 more years of mayhem? Only a war can stop it and most US administrations understand this fact. Despite working with half-baked, hair-brained economics, these fools know a war makes believers and supports broken economies.
21. Housing green shoots are dying weeds. While some oversold markets are attracting bottom feeders scraping around for bargains, the worst overbuilt markets have further to fall as banks having cash won’t lend it to you. These credit markets are paralyzed. Watch what happens when the next big batch of pending five year refinancing failures arrives with a huge thud. Smart consumers will rent for 3-5 more years, or longer living under the radar, saving money, avoiding debts and hunkering down for future housing buys at 10 cents on the dollar.
22. A major turning point arrived in credit markets this spring when Chopper Ben and Timmy were forced to monetize, or buy each other’s paper in a spiral down the dollar-bond drain. As foreigners shun this paper, the Boyz have to do something with it so they print dollars and bonds and pretend they’re sold putting paper on the Federal Reserve’s Bond Purgatory Shelf. The game cannot last as yields rise, inflation rears its ugly head and all this paper is recycled to the outhouse. This is big news and signals the beginning of the end. Watch for a conspicuous absence of buyers at bond and note auctions. More must be held by Timmy and Benny.
23. Obamamaniacs think all of this “spread it around” stuff is really keen policy. The problem is it cannot and will not continue. The Big Three Automakers are toast and even remaining Ford Motor will be asking for help within 18 months or less when sales skid further and their cash burn marches on. We think Chrysler and GM are goners despite major handouts. The industry Achilles Heel is failing parts companies and no sales as consumers are broke and broken.
24. Big bankers got hands-full of cash from Uncle and were supposed to lend it for economic enhancement. They kept it to replenish balance sheets, then fooled the shares markets into giving them more cash for junk paper so they can pay back the TARP. And then they say to hell with you and the public who just happened to bail them out and save their spoiled bacon.
25. As we have reported in recent weeks, Europe is falling faster than the US and so is Asia. Germany was the primary support in Euroland. The latest news from their economy was a reported dive toward the cellar along with France, Spain and the worst of them all, Gordon Brown’s U.K., essentially bankrupting faster than the US. If you think whole nations cannot go BK look at Iceland, Latvia, Russia under Gorbechov and all of those banana republic, South American failures. How about some neat stocks or investments in greater Zimbabwe?
26. Japan’s economic slide down is an astounding horrific 15%. This is an unbelievable free-fall. We haven’t seen any jobless stats but can only guess they are severe. Japan is a major exporter to the world (world’s second largest economy). In recent years much of their manufactured stuff was made in China and then resold by Japan. Both nations get a double whammy today as all this business evaporates.
27. Some of the anti-American nations along with Middle Eastern oil producers and Russia with China are moving slowly toward other currencies, bonds, and investments. Their primary problem is they have too much cash for other choices.  Only the US has the big market offerings enabling cash investors to park gazillions in cash. For the time being the US dollar, notes and bonds are the only logical option for parking big cash. This will change over time but the weaker dollar can hang on longer than we all suspect. Yet, in our view the dollar is cut in half again over the next 3-5 years.
28. Government jobless reports are fiction. Most know this and we chuckle when Rick Santelli says so on TV periodically. However, this problem is not the least bit funny for those without work trying to pay bills and feed children. The food pantries are in high gear working with new energy to manage growing demand. We encourage everyone to help neighbors and friends to the extent you can. Government has the funds and the food stamps, but no workable distribution system, and they are terribly disorganized. The worst of it is these bureaucrats have no conception of the current huge and growing demand for food for the needy and hungry. I have personal plans to expand my participation to the extent I can help. Please do your part and help if you can. This mess is spreading to even well-to-do communities.
29. As we’ve been reporting, retail is a goner. Sales are off, malls are closing and the strip centers with those mom and pop stores went down first. Retail within the five major, commercial rental groups is in the worst condition. Office is still holding-up the best but hotels and industrial are falling faster. Watch for the REIT investment funds to enter a complete crash by this fall. We did forecast this in 2007.
30. The Obamamaniacs will hit us with two more double whammies. (1) Their dictatorial reorganization plans for the entire USA financial system is being announced this week and; (2) The mammoth health care debacle will follow, which the president insists must be approved and in place by this fall.
31. We predict the health care plan has a chance of being thwarted by smarter heads (he sez hopefully) if the fall stock market crash hits before this impending approval it might be stifled permanently. Really all they need to do is hand out health debit cards (pre-paid vouchers) for 23 million uninsured and go home calling it a day with problem solved. That’s too easy and effective so it won’t happen. There are not 43 million uninsured as they cannot count.
32. Lastly, the big unknowns are geopolitical fever rising in the Middle East, Russia, and China. Since the president has obviously thrown Israel under the bus they will eventually have to attack Iran to protect themselves from another holocaust. The North Korean nut job might do anything and is holding some cards. China better get busy getting that client state under control, or the US and Japan will have to do it for them making a bigger mess.
Markets are nearing a peak in precious metals shares that generally follow primary stock indexes. As the current stock market peaking descends into the tardy Sell in May, PM shares normally follow. With each cycle we think gold and silver shares might sell less posting higher lows. This could be decided on the shorter term by how low our S&P’s trade. We expect 800 to 850 with 800 being more probable. One of these days PM shares will disregard all broken markets and rocket rally. Not yet.
Do not get tangled-up in daily noise. Keep studying the larger view and buy precious metals after each profit-taking correction. Headwinds are building into an economic hurricane. Take care of business right now. My dire fall prediction might surprise us and arrive earlier. Time is short.
Personally, I can see unbelievable opportunities to trade that we would never see again for many years. Turn these problems into opportunities. Those on the right side of the trade might get rich. Those on the other side are just victims. Stay Alert. –Traderrog
Roger Wiegand
Editor Trader Tracks Newsletter
The Jay & Rog Blog at webeatthestreet.com

By Roger Wiegand
Jun 18 2009 http://www.webeatthestreet.com

President Barack Obama said on Tuesday that worrying about the U.S. government’s finances “keeps me awake at night” and the country needed to start planning now to tackle soaring deficits. -Reuters

YES, MR. PRESIDENT, WE AGREE. However, you are totally on the wrong path by implementing an FDR-like fiscal destructive nightmare. With a soaring debt-to-GDP ratio, we saw big trouble when the numbers went past 6% but are now heading toward 12%. Historically, no nation, after ruining their finances past the 6% number has ever been able to find a normal recovery. The U.S. won’t either and they are instrumental in taking down Asia and Europe with all the Americas from Brazil all the way to Canada.

Columnist Mona Charen has told us, “The entitlement mentality so carefully cultivated by liberal academics, politicians, clergymen, and journalists continues to corrode the self-sufficiency that once defined the American character.”

Mr. Alan Greenspan spawned the technical Nasdaq stock bubble that blew up in 2000 when all markets should have endured an identical correction. Instead, Mr. G. moved swiftly, lowering interest rates and tossing gobs of cash at big banks. In the hollow, er, hallowed halls of congress his persona was redeemed. Nobody with half a brain (many half brains reside in congress) could understand what in the world the Greenman was saying anyway. We are not so sure he did either. However, this is the kind of corrosive economic policy so damaging to character and country as Ms. Charen has told us.

When bankers have the cash what do they do? They loan it, spend it and worst of all moved it into derivative land where most lenders previously feared to tread. Instead of a shorter term and less nasty recession we are getting a prolonged Greater Depression II. This one will be the mother of all big ones with a distinct potential for giving us a one in 300 years cataclysmic catastrophe.

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