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Melt up occurring in every aspect of the markets as the dollar is in its last death throes. Helicopter Ben is now upgraded to a Conviction C5 Galaxy Ben by Goldman Sachs.
When does the USD go on the pink sheets? OTC BB?
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Is our country dying Tyler? At this rate Ben is going to need a little prick in the arm for that Galaxy of Zimbab Dollars
He already has a little prick - his name is Geithner.
I'm confused. How does Ben get Geitner in his arm? Huh?
First, he has to extract him out of his ass.....
Set and spike!
A311, our country is not dying. After 2012, US will be rebuilt by the people.
No, it'll be rebuilt by the resurrected zombie population of the Mayan civilization.
I've gotta take the over/under on the Mayan zombies as a more plausible scenario.
Maybe there will be a democratic revolution in China and they'll come over and liberate us?
Ohhhh that is so funny it hurts. That means there must be some truth in there somewhere... the irony....
If I may answer your question: yes. In fact, it's already dead, but people's perception of this will lag 3-5 years behind the reality because they watch too much TV and take too many drugs (alcohol ritalin etc).
If you haven't already heard it, you need to download "Wiggles and Ritalin" by Reckless Kelly. On one hand, I don't mean to offend anyone, but on the other hand we really need to have a collective talk about who we are. We are a nation who:
1. Uses force to settle even the most petty of disputes and then is shocked that punks in gangs use force to settle even the most petty of disputes.
2. Kills the unborn, the old, those we deem criminal, people in far off lands and then we are shocked that there is so much street crime.
3. Medicates ourselves and medicates our children, so pious and self-righteous that it is a sign of enlightenment, an admission that we are not good enough without a pill and then we seem stunned that children abuse drugs.
4. We take land from the Indians and Mexico and then seem genuinely shocked that they want it back.
Most of us have been too brainwashed to see us as we really are. It isn't a pretty picture and it doesn't end well. We're no different than any other empire. We talk about our nobility, and our godliness just as they did, and we will end just as they did....sooner than most folks think.
Impressive. Are you sure you aren't Chumbawamba?
Corporate Feudalism will be the end of freedom as we know it.
Why are you using the future tense?
In reference to the freedom that we know. While I agree that our freedoms now are far fewer than they have been in the past, there are few who choose to realize it. So what I am saying is that; the freedom you know now, will, continue, perhaps is the word you wanted to hear, to deteriorate, to the point where it will be, at some point in the future, unrecognizable to the present you.
Does that clear it up?
Yes. I was being flip anyway, making the point that we have already experienced a severe decrease in our freedoms, in both overt and covert ways. I don't really agree or disagree with your forecast of it getting significantly worse; it's bad enough, and considerably worse would be "V" or a repeat of Europe in the '30's, I suppose.
Wurd; ya Hurd?!?
Just brutes with guns.
Same old shit.
Arthor: I agree, and we must use this time effectively. Wake up as many as you can, get them ready for the critical times ahead where the new oligarchy will try to formally install itself based on phony populism. Their watchword is: Embrace, Extend, and Extinguish.
OR, THESIS, ANTITHESIS, SYNTHESIS.
Except for the alcohol and drugs thing, well maybe too much ritalin, not enough herbs. Smoke some weed and this country starts to look like something out of 'They Live'... Why do you think they tried to make it illiegal?
Thanks for the link D.O.D
Civilization...Some restrictions apply.
Here's an interesting correlation.
The more painful the truth, the funnier the joke...
That's some funny shizzle man...favorited and shared! THANX
Does anyone know what happens when SDS hits zero?
It's a percentage mover, statistically it can never hit 0... How many times do you need to divide 1 by 2 to reach 0?
It was a rhetorical question.
I am trying all the combinations now. I think its definitely over 9000.
They are killin' Sam. I know it was you Timmy. You broke my heart.
When USD drops to upper 60's everyone will be happy to see it bounce to the current level. Then low 70's will be the "new normal" for a while.
WTF - the Fed is now working on a proposal for gift card transparency.
So they're going to mandate that retailers use clear plastic?
wtf happened to silver?
I have been surprised it has stayed as low as it has this long.
agreed, but something is going on...Iknow it just broke out so shorts are freaking...but...
I bought some physical this weekend. Might have done it :-)
newbie question, but...if/when you ever want to sell physical, what is the best way to do it?
I have been contemplating this question myself. It seems as thought there will be a great market for a Gold and Silver depository. This depository could contract out with member banks to offer their clients a new service. The trick would be to then be able to resell the silver and gold on the open market and ship it.
Could probably have an ETF as a cache/cash?
Then allow members to pay their bills electronically. This could also be used to revive a community with a community issued silver round.
There are several ways to sell physical and you should always shop for the best price. The easiest way is to go to your local coin dealer or jeweler.
There are a number of places on-line that will buy your physical also but check to make sure they are legit.
First and foremost DONT SELL to CASH4GOLD.
If I may interject here - buying and selling precious metals is my business. I won't put in a plug because that wouldn't be appropriate.
BUT......DON'T EVER EVER EVER SELL TO CASH 4 GOLD......I CAN HEAR THE RIPPING FROM HERE AS THEY FORK PEOPLE OVER, RIGHT, LEFT AND CENTER.
Thank you. I feel better now.
I've been nibbling at physical silver myself. Tasty!
Goddamit, my buy order last week missed the lower lowest price for 2 cents... I missed the whole leap.
just catching up with gold. Silver is still behind it's March 2008 high. If gold keeps moving up, silver - the poor man's gold, could go exponential.
agreed...but look at the spread with the SLV...i am all about physical and there have been rumblings....so I hear...
SLV is not silver.
SLV is pulp.
Actually, if SLV was even that it might be worth something. As it is, SLV is just digital blips in a universe awash with them.
All you need to know: SLV is not silver.
I am Chumbawamba.
I know and agree...
When is that card (paper vs physical) going to play itself?
Or when is China et al going to force that card?
When you need the actual stuff the most.
"WILL" GO X-PONENTIAL. SILVER IS MORE SCARCE THAN GOLD, AND SCARCITY AND DEMAND DETERMINES VALUE. IN ADDITION, YOU MAY HAVE TROUBLE GETTING/ MAKING CHANGE FOR A $2000 OZ. OF GOLD .
Maybe they saw a line of U-Haul trucks outside Comex...
I think silver just broke an important resistance level.
It's fairly common opinion, but anything might be a possibility.
check out the gold-silver ratio charts here:
silver was nice this morning.
anyone have thoughts on emerging markets short like eum? things seem to have been too goo to be true over there for a couple weeks now
Wow, with everything going up, the economy must be doing well, I feel confident.
I think I'll borrow against the value of my home and max out all my credit cards, to overpay for a ranch house down the street. Then I will hire a crew of immigrants to shine it up (and install Travertine tile everywhere, people love travertine) so I can sell it for a 100% profit.
See, all done, the economy, as indicated by the price of gold and the likes of AMZN, NFLX, DRN, etc., must be all better because everything is going up.
Your post sounds sarcastic. Listen up doomer, Amazon have a new technology called the Kindle. Everyone on earth will be buying one or two of them. This is why Amazon trades at P/E of 80 and is still a bargain
PS. You should flip that house and get into real estate investing. Its all about wealth creation, I am going to a seminar next weekend.
The Kindle. Thanks, I forgot about that, that sounds reasonable. Since they are probably not made in the US, will their price rise or fall with the Dollar?
The kindle is replacing books. in the future libraries will be full of them. 1000s of kindles. in libraries = P/E 80
Why would there still be libraries.
Where the hell else are you going to keep all those Kindles?
Um, because, umm, it's all about downloading?
Why Kindle and not the superior B&N bookreader?
It has color on the bottom screen and looks less ghey!
Oh man you're like a cross between Bill Gates, someone who actually watches those get rich selling loan notes commercials and a kind of crazy that just results from being a ignorant pawn on the leading edge of a sheep herd.
Are you sure you're not the one being sarcastic?
Apple Tablet will run circles around Kindle. Do yourself a favor: skip the real estate seminar...click sell AMZN repeatedly.
Real estate seminar...HA!!! Is it 2003????
Actually, the price of gold going up is an indicator of the reality that it's all going into the shitter.
No bounce back in sight ??
Silver is up over 4% for the day right now. Just called American Golden Eagle to complain---my order which included 100 Mercury head dimes was one dime short. Did they think I wouldn't count them? They said they'd send one along.
Still waiting for another shipment of 25 Siver Eagles and 5 x 1/10 oz gold Eagles.
I live in a rural area and I figure if it all comes tumbling down I'll be able to purchase a few chickens (have wire and lumber for a house). Need to buy some feed just in case.
200+ lbs of rice, 150 lbs of flour, sugar, coffee, etc. Plenty of ammo. Manual pump for the well boxed up in the shed. I might go buy some liquor this morning strictly for trading purposes (yeah, right).
Fear, check. Shortage concerns, check. US Dollar allegedly 4 steps away from oblivion, check.
hmmm, sounds a lot like last July again with gold this time.
I think we don't know what the morrow may bring, and it's insurance against the worst. Fear? You betcha!
"... like last July again with gold this time."
That's my new favorite quote!
Somehow I get the feeling you're a follower of Robert Prechter...
All the apocalyptic talk pushed me to buy gold and silver at twice the pace I would probably have. So even if they jumped the gun I can't complain. Speaking of which, getting a permit is next on my list.
Practice often so you stay comfortable with it. Do more training than the class you need for the permit. You learn a lot in that class that demystifies guns. I was very pleased with my process. Night and day. Thanks for being responsible.
Good luck and enjoy.
"Last death throes" - gold might go up a helluva ton more before the dollar breathes it's last breath
and, the dollar has a good bit yet to drop before it dies
Ben is now RocketMan. The laws of scienceI don't understand, its just my job fivedays a week. A ROCKET MAAAAAAAAAAAAAN.
Ben's not the man they think he is back home
this was sent to me.... thoughts
Being that this firm is based on macroeconomic analysis we will begin our notes with the status of current interest rates in the US. At their latest meeting the FOMC not only kept interest rates at zero, but signaled that they could see keeping rates at this level for the foreseeable future. We believe that these statements have been the most dovish comments from the FOMC over the past year. It is clear that the Fed still recognizes that deflation is still the primary threat to the US economy. We at ****** not only agree with that, but we think that deflation will remain the primary threat for the next two years. It is because of this threat that the Fed, and now the US government, will continue to engage in policies that pump as much liquidity into the system as possible. It is from this fact and this fact alone that we will base our current investment thesis.
While the Fed continues to pump liquidity into the system with the hope of inviting as much inflation to the party as possible, they will continue to weaken the US dollar as well as the long term prognosis of the US economy. Though US Treasury Secretary Timothy Geithner says that a strong US dollar is the goal of US policy, we believe that they are actually making an effort to devalue the dollar. It is in this process that a broad based inflation of all assets is taking place. While this theory may hold some merit, as it is unleashed into the real world, it has real world consequences. Could it be that the policy of the US is to create an environment which identically reflects the environment that got us to where we are today?
We’ll start with the current status of the US dollar. It is widely known now amongst market followers that the market run up over the last nine months has been a result of not only a natural bounce off the lows, but a reflection of the complete deterioration of the US dollar. While there was a run up in the dollar during the peak of this crisis last fall, it has since retreated to a course that started at the beginning of the decade. It should be noted that the top in the US dollar was in late February, while the markets bottomed during the first week of March. Since, there has been an inverse relation between all assets and the price of the US dollar; the dollar is off some 20% while most major averages are up roughly 60% over the same time frame. While the US dollar is just getting back to pre-crisis levels, it is from here that most will take notice. Will it continue it’s descend and if so, at what rate?
Just what does a declining US dollar mean to the world economy and has it become the new carry trade? For those of you that don’t know, traditional carry trades are those in which the currency of a low interest rate nation is sold to invest in assets in a higher rate bearing environment. With real interest rates currently negative in the US and the Fed signaling no end in sight to this policy, this breeds grounds for such a trade to take place. In the past the Swiss franc and the Japanese yen were used as such vehicles, with the yen serving as the dominant choice. This was possible because Japan had their rates effectively at zero over the past 20 years. This was okay on the world stage because the population of Japan maintained a high savings rate as well as the fact that Japan carried an account surplus due to a high level of exports. If the US dollar has now become the new carry trade it holds a different set of complications. The US does not hold a surplus, nor does it have a high savings rate, but most importantly, all major commodities are priced in US dollars. In other words, this serves to be a very profitable trade in the right environment, but it has major implications on the downside. As long as the US dollar continues to slide, all asset classes will continue to go up, but if there is a rally in the dollar short term, it could force those who have put on the trade to cover their shorts in the dollar, driving the price even higher, and conversely drive the price of all assets down sharply if not executed in a orderly fashion.
Our view is that over the long term there is a chance that the US dollar will reach lows that we find hard to articulate in words. In the short term, however, we believe that there remains a chance of a dollar rally with a floor in the index somewhere around the 70-75 range. We do feel that it can go lower, but as it does it will strengthen the currencies of other nations. We feel that the BoE and the ECB are now feeling the pressures of a higher currency against the US dollar and will likely engage in activities to weaken their currencies versus the US dollar. A weaker US dollar does make the US more competitive from an exporting point of view, and these central banks are reaching the point where they might step in to intervene. They say that imitation is the sincerest form of flattery; well we believe that the BoE and the ECB might begin to imitate the policies of the US government and try to debase their currencies in hopes to inflate their economies out of the current crisis as well. If this is the case and the US dollar does rally a bit, there will be an inevitable sell-off in the markets. However, we continue to believe that the long term value of the dollar will continue to depreciate thanks to the printing press located on Constitution Ave.
This combined with the fact that the current US administration is embarking on a set of policies that have no regard to stabilizing the economy and creating jobs, as well as the fact that our president, which we view to have no back-bone, and will be faced with a tough mid-term election cycle, will undoubtedly insure that the printing press will have as much ink as necessary. We believe that the real unemployment rate is well above the current 10.2% reported level, and will continue through to at least to the 11-11.5% levels as being measured by our government. This will probably force our government to push for even more stimulus and print more money as the party of power feels the heat come election time.
Another observation that we are making is that Japan seems to be entering into a situation that can prove to be very costly to their well being. We see Japan’s debt to GDP ratio reaching 200:1 in 2010. While Japan has always run a high ratio, with less exports going into the world economy, they might find it very hard to continue servicing that amount of debt. If Japan does default on any of it’s debt it will send vibrations throughout the world and really show signs in the currency markets. This could lead to an exacerbation of the problems that already exist.
Other negative prospects facing the near term economy is that there still seems to be major problems in the mortgage arena. We feel that there will undoubtedly be a second and third wave of foreclosures in the US. The first having been the hit of sub-prime losses due to higher rates, the second will be due to the loss of jobs (this is starting to happen now,) and a third which will be a continuation of the second and, thus the final stabilization of the process. We feel that if this does take place the major banks will continue to be forced write down assets currently on their books. We also feel that there will be major problems in the coming years with the commercial real estate markets. Most of these projects were funded with revolving debt of 5 -7 year terms. This means that the glut of deals that took place at the height of the market from 2005-2007 have yet to come due. These investors will inevitably begin to default on their loans, or be forced to write down their assets come reset time. There will be a lot of deals that might lack the ability to even roll their debt over due to market conditions. This process can already be seen in that the owners of the Stuyvesant Town project in Manhattan are already forced with having to restructure their debt. This phenomenon will take place all over the country and create the biggest problems amongst the regional banks that funded the majority of the smaller projects.
It is to be known that credit is tightening in hopes to prepare for such a situation. Given that the CMBS market is about a third of the home mortgage market it will not be as big of a problem; however, a problem nonetheless. With tighter restrictions on capital, the general public, the ones actually seeking to grow and expand, will find it extremely hard to find the type of financing that they will need to endure the process. While in theory this is a good thing, it will continue to stunt the type of growth that is necessary to improve labor conditions and help to get us into a job creating economy again. This will continue to affect the overall economy and put premiums on companies that can not only produce top line growth, but run efficient companies to begin with. This lack of job growth will lead to continued problems in tax revenue on both national and local levels. This means that these governments will be forced to try and raise taxes, thus stunting growth even more, or the Fed will continue to print more money. Either way we feel as though the outcome will be rough times ahead. We feel that there are a lot of municipalities that will be faced with lean times; we do not feel confident about the general state of municipal markets in this environment.
So how do we plan to navigate this economy? Long term, we feel that US bonds have nowhere to go but down, the US dollar might be the worst place to hold reserves, and we are in/entering into a cycle that will put a premium on hard assets. While we feel on one had that the US dollar is the worst place to store wealth over the course of the next ten years, on the other hand we feel that gold will serve to be the best. Does that mean that there are no other opportunities to invest, of course not; however, we are not in Kansas anymore. We believe that we are in a phase that will involve constant evaluation of one’s assets and a regular monitoring of the world’s governments and central banks. Over the next ten years, we believe that a premium will be paid for managers who stay on top of their game and actively monitor their accounts. While we at ****** believe in creating long term value for our investors, with so many factors in play, now is not the time for a set it and forget it attitude.
As noted above, we believe that we are in a hard asset cycle. We believe that precious metals and other commodities have entered into a roughly fifteen year bull market that began around the turn of the century. It was about that time that gold began its rally from the lows. We also believe that at some point over the last 12 months gold has turned into more of a financial instrument than gauged mostly by the use of it in jewelry. At the current rate that the US is printing money, it has begun to worry a lot of people and governments that hold US debt across the world. We believe that as this process continues foreign governments will begin to diversify their reserves by purchasing more gold. This process has already begun with India’s recent purchase of 200 tones of gold from the IMF. We believe that Russia and ultimately China will do the same.
While we believe that it is in the interest of not only the US, but the world to have a stable US dollar, we fear that there will be a point that the amount of US dollars that are being put on the street will eventually worry these entities to the level that the feel that they have to store gold. While we feel that they will continue to buy US debt, especially short-term debt, for the sake of not devaluing their current holdings, they will stop buying long-term treasuries and begin to store physical gold as an alternative. We believe that China will not only start to store gold, but that it will tell there citizens to begin buying gold and not US debt for the sake of not having their country so dependant on the value of the US dollar. With the still immature habits of China’s investing public, this might endure a mania of sorts as time goes on. This combined with the fact that those who wish to store gold will have to bid up those in the jewelry market, thus driving the price up even further.
We believe that we could possibly be entering in to a situation in which the correlation between the price of gold and the level of the Dow reverts back to a ratio of 1:1 as it did in 1934 and 1980. While we are not sure if they will meet at exactly 1:1, we do be live that somehow that gap will be tightened, and with the Dow currently at 10,250 and gold trading at 1100 you can see that there is a lot of room between them. How high will gold get as to achieve this; we don’t know, but we certainly think it will go a lot higher than it is now.
What does this mean for investors? We believe that there will be opportunities to enter the gold market over the next 24 months; especially if there is a short-term rally in the US dollar. However, we feel as though a floor may have been established around the $1000 level. We think the best way to play this is to diversify amongst the miners, ETFs, as well as storing some actual bullion. With the capital allocated to store actual metal, we feel that it is best to go with a gold/silver ratio of 75:25. Concerning the miners, we feel that going with some of the larger diversified companies is a must, as well as holding some mid-level names as there will certainly be some consolidation in the market as the price rises and the large cap names realize that it will be best to buy smaller companies in hopes to keep up with the demand.
With regards to the oil market, we also feel as though oil has moved to serve as a financial instrument as well as a basis for supply and demand. While we feel that in the immediate term the price of oil feels a bit frothy at $80/barrel, the long term prospects for the price are inevitably higher. There continues to be a major concern about the situation in Iran and how that plays out on the world stage. This alone will keep the price of oil from falling too far in the near future. Aside from that thought, we feel that the price of oil will feel pressure if the dollar does rally or if the US economy continues to drag out of this recession with a jobless recovery as the storage capacity of oil remains at very high levels. We feel as though the best way to play the market is through the large, multi-national companies. We feel that the upstream companies will favor best in this environment and that the down stream firms will suffer most on the margin. We do think that there are opportunities in the service sector, but not all companies are the same.
We feel it best to be choosy at these levels and that the larger companies with proven reserves will do best because companies are still unsure about the direction of the world’s economies. While the long term prospects look good, we feel as though many companies are still feeling the shock of last year’s price volatility. We feel as though companies are still a bit hesitant to allocate resources to resume some current projects as well as further exploration. If this proves to be the case it might not serve to be promising for the job market, be it might show up on the bottom line of some of these companies. That’s why we feel that the larger companies will prove best in this scenario. We also feel that there are major companies in the rig construction/servicing area that will continue to do well as it takes a long time for orders to be filled and the long term still looks inviting for the price of oil. In short, oil remains the best single option at this point for all of it’s current uses. While we don’t fully participate in the peak oil view, and we do think there might still be a good bit of oil left to be found, as world economies mature, the rate of use will continue to be faster than the rate in which more is found. Until this changes or new technologies are proven to be more viable, the price of oil will stay on an upward slope.
Continuing with our theme of hard assets, we feel as though there will be some real opportunities in the agricultural markets. We especially like wheat at these levels as it sits at multi-year lows versus other commodities. We feel as though this sector will continue to do well as the world population continues to rise. While we are not in the camp that there will be a shortage of food supply, we do feel that the grain sector and farmland in general will prove to be very valuable over the course of the next decade. This leads to many long term options in both the production of these products as well as the chemical/fertilizer, farm equipment, and irrigation systems needed to produce the supply.
It is because of oil and farm production that brings us to a topic that we have been excited about for the last few years, Brazil. We feel as though Brazil might very well hold the most well rounded opportunities over the next decade. We undoubtedly believe that over the next decade Brazil will become an economic power on the world scene. While there have been issues with this country and with the real in the past, we feel as though they are now poised to take it to the next level. We also feel as though the rest of the world is now on their side to assist in this process.
In terms of agriculture and farmland alone, Brazil is only using roughly 1/3 of its available territory. With so much room to expand, production efficiency double what is was just 15 years ago and the understanding of the need for true agricultural policies, Brazil is poised to become an agricultural powerhouse. This, combined with the huge oil reserves found offshore, will position Brazil as a country with huge exporting potential. While the population of Brazil is far behind that of both China and India, it remains a culture with European and western roots. We believe that as the Brazilian economy develops even more, it will become much more of a consumer nation than the aforementioned economies. While this may have posed problems in the past, we believe they will be better poised to have a more well-rounded economy.
With all of the income from these exports as well as the world’s eyes upon them due to the upcoming FIFA World Cup 2014 and the Olympics 2016, there will be a lot of opportunities in various areas due to their need to develop and service their economy for these events. Also, with a robust middle class expecting more from their government, I expect a lot of opportunities ahead. While we don’t expect this to be an easy ride as the youth of this economy is sure to show at times, as well as a situation with the local precatorio market that we’ll be monitoring, we remain very high on Brazil.
While we do have several opinions on the country of China, we are preparing a broad outlook for that economy that we will issue at a later date. We will say this, however, while we believe that there are and will continue to be opportunities in the Chinese markets, we are not sure if we are at the point where we fully subscribe to what is taking place to date. We believe that China is doing and will continue to do everything it can to support it’s current growth rate, but we also believe that it just cannot be sustained at this pace. There are too many signs of phantom growth as well as real questions with the numbers that the government is reporting. We compare China to a 70 year old man of great wealth; a man that has decided that he will spend/invest all of his money before he dies. While this might look good at first, one questions just how much return he will get over time. How much input will actually come from all of the output? We know that may be a short version, but aren’t completely sold on China at these levels. With that being said, we won’t fight the trend. We believe that the best way to play this market is through ETFs, ADRs, and multi-nationals that deal with the Chinese.
While we have stated some of our long term views and will be looking to position the core of our fund in those directions, being that our goal is absolute returns, there are several situations that look appealing to us. Aside from hard assets, in the short term we like technology, health care and large cap consumer staples. We do still think that there will be some financial firms that will benefit from the current environment via their trading desks; however, these names remain few and we will move in the overall financial sector with caution.
We feel as though the technology sector will continue to do well as companies look to run their businesses more efficiently without hiring more people; this includes both software and hardware firms. We also believe that there will be consolidation due to market conditions. These companies have a lot of cash on their balance sheet and might need to put it to use as the dollar continues to slide.
We believe that the healthcare sector, especially the hospital operators, supply vendors, and insurance companies will do well over the course of the next two years. We do not believe that the US government will be able to pass reform in the fashion that is currently being debated in congress, thus a boost to this sector will take place and they will serve as viable options as the economy possibly deteriorates.
We believe that a rotation may have begun out of high beta names and into low beta names that have lagged the market over the recent run up. We also feel that there will be a more robust holiday season than expected, however, still low by normal standards. With a better grasp on inventories than last year, companies may be poised to have good margins over the fourth quarter. We do believe that there will be a trade down effect in place and think that the lower end retailers will prove to benefit the most.
While we believe that there continues to be opportunities in distressed debt, we feel as though the corporate bond market is more fairly valued at this time than a year ago. As noted before, we are not passionate about US or municipal bonds at all. We don’t see any reason to buy long term debt of any sort. We also don’t see any reason to tie up capital in the form of long term illiquid assets outside of precious metals or any distressed real estate opportunities that may come up over the course of the next few years. While bond prices will likely remain high for sometime, they have nowhere to go but down. We do not see US bonds as an investment at this point; rather they are being used short term as a place to store wealth. As noted, these are not vehicles that we will choose to store capital any time soon. With the possible onslaught of inflation and a depressed US dollar, we feel that the flexibility of capital will be imperative. While the yield curve will likely remain steep for the next couple of years before flattening out, we will begin to look for opportunities to build a position in shorting the long dated bond market over the next 24 months.
While these remain our broad based views, we will continue to look for short term opportunities for our trading portion of the fund. As they say, don’t fight the tape. While we remain steady with our long term view, we will do our best to protect the fund as well as benefit from any of the policies coming out of Washington. We will continue to monitor our positions daily and make decisions accordingly. We will continue to hedge our positions as well as short markets that we believe are inadequate.
While we don’t like to talk about negatives in the US economy, we know that there are two sides to every trade. We know that if we stay on top of the markets, stick to the facts, and remain nimble throughout, we will be presented with opportunities not just to protect our capital, but to appreciate our capital over what appears to be daunting times.
Cripes! Don't post a WALL OF TEXT and expect it to be read.
Too long; Didn't read
Don't beat around the bush, now. Give it to us straight.
Q: Does Zero Hedge readership pick-up on days like today or does it decline?
Ever considered have pay per view indicators showing hits per day and posts per day on the site. Maybe even start a zero hedge weekly sentiment survey?
Nowadays sentiment varies between bullish on gold and breathlessly bullish on gold
Since only about 5% of investors include gold in their portfolios, I would not say that sentiment is even close to bullish.
It reminds me of Prechter who goes to a Gold Show and writes about how EVERYONE is bullish on gold. He might as well go to an AA meeting and then state that EVERYONE is a drunk.
We are a LONG ways from investors being bullish on gold/silver...a LONG ways!
Agree. This reserve currency shift / fiat repudiation has a long way to go.
Absolutely, Bernanke still has another $2T in Fannie/Freddie MBS he is gonna have to buy, in my estimation. That alone might kill the nightcrawler for good.
You may have observed the Youtube clip of a guy trying to sell a 1oz Maple Leaf for $50.00. on the street. No takers.. Hard to convince me that we are in a bubble in gold....
Somehow I find all the blogs littered with bears/ Prechterites. There are just so goddamn many of them. I get it - it's a bull market in bears/Prechterites!
P.S.: Not that I don't think the stock market is a turd. It is. But there is no sense in being bearish on Gold and commodities.
Who's this Precter guy? Got a link?
Here's the link:
i actually laughed out loud.
I see faith in yellow metal shouldn't be questioned.
If it is a bubble, vs. an abandonment of confidence in the gov., we are still in an early phase of it.
I buy gold because it is a vote of no confidence in the gov.
No, if one is going to question something, do it INTELLIGENTLY!
Just playing around, looking to see what would be said...
All these "*-ites" and other such bullshit labels just show a closed mind.
I don't know Prechter's schtick, but I'll wager that GG does and has done his homework. So unless Prechter is the type to change horses midstream (which can be a fault in and of itself), having a consistently critical view of his 'type' is not so much 'having a closed mind' as it is 'not suffering fools'.
Thanks faustian. Spot on.
He's the bald guy on "That 70's Show".
I had a tin foil hat moment. What if the Chinese demanded that President Obama personally deliver an IMF gold purchase?
His deep bow was actually his buckling under the weight of White House silver he was to pawn at Akihito's Gold, Trinkets, and remnants of empire's past MoneyLender store.
Glad he wore socks. Woudda been embarrassing otherwise.
I am having second thought, gold will reach 2000 by 06-01-2010. What is the reason of this mind change. The performance of Mr. Obama's Asia trip is definitely poor. This will change globe's view on him, the US$ will drift lower. It is very sad to say as an American.
Crickets chirping as shorts reamed again.
Is anybody short now, and why would you be going into year end?
Not too many shorts around here anymore, which is probably a good indication that it is soon safe to go short.
Personally though I wouldn't recommend it, not while the dollar is collapsing, which should continue for about another 18 months before it is finally taken out to the woodshed and killed.
SLV very strong this morning on a breakout; initial target is 18.13. Second 19.47. Chart here:
USD testing 75 once again. I'm long gold & silver. ;)
Silver's action says gold can keep ramping in the short-term:
It makes sense that stocks are ramping, too...
$1150 gold here we come!! WHEEE!!!:))
Bob Prechter and Nic 'dollar rally' Lenoir just paid for my new Italian pony car by taking the other sides of my gold trades. Thanks, guys.
Seriously man, can't thank these guys enough. They have created a huge herd just waiting to be skinned.
Take that over to MarketTicker and get banned with it lol
Someone inform Douchenger that he'd better go get himself a pile of silver if he wants to keep publishing his stupid blog. I'm sure at some point soon here his ISP will require payment in REAL money.
I live in a suburb outside of detroit and the headline in the sunday paper read in big bold letters bidder pays 80k for 38 homes below read also included 34 vacant lots for a total of 72 properties.this was in warren, mich
And how much will it cost to defend and pay property tax on those? Bad investment. Tell Emenem to stick to da rappin'.
Agree, the property tax will kill this investor before he/she knows about it. No one can escape tax and death.
Gold ain't an investment, it's stuff u can walk the fk out of the country with. Dollar is being repriced closer to intrinsic.
I mean, gd, has anyone looked at the US's balance sheet lately? We got toxic sludge stripmall CMBS's as assets on our CB's balance sheet. At par.
Exactly--gold bullion is not an investment--it is a store of value. It is for preserving your purchasing power. Sometimes, that is the best you can do, looking at the current investment "opportunities"
A chief Austrian finding is that counterfeiting causes malinvestment. The fact that most counterfeiting is done by governments and called monetary policy does not change the consequences one iota. --Richard Maybury
The 4 C's of central banking:
Coin Clip, counterfeit, curry confidence, control collapse
True. However, if you get in early, it is also an investment. I've already gain about $300 per troy ounce on average on all my gold. And I didn't even get in early!
Chumba ,Its still early! Gold is going to run for at least 5 years if not 10. Especially with the ass hats in charge of monetary policy.
First plunge at $420 and I thought I was late!
Not enough people understand that, technically, it is the Fed's balance sheet that backs our currency.
Exactly, now backed almost 50% of Fannie and Freddie MBS.
LMAO!!! But don't worry, the USD is going to "rally" any day now.
Who'll rally it? Every foreigner and citizen wants to drop the $ and buy AU or different currency.
Can't fight the FED? What about when their criminal mismanagement drives everyone with a checkbook and pen to buy anything rather than hold dollars?
Anything that is except that which would stimulate the economy.
Demolition, security, second-hand sales, bullion transport, guns'n'ammo. The ONLY future growth industries and next MegaTrends.
Got undertaker and coffin?
Just a shame it doesn't store price.
The actual herd mentality is the one dimensional group think that says the U.S. is finished, China will take over and fiat money is done.
Must be great being you guys and knowing the future. Especially when the whole market believes the same theory.
ya I heard they landed in Detroit first. Where you been? Sheesh!
I think your sarcastic last sentence just countered your own argument re. herd mentality.
Must be tough being in the mainstream and watching some 'alternative' paradigm take over.
anyone. the buck just spiked. is there some news?
Gold does not seem to care, at least at 13:35.
Did you think you were going to find a gold thread without the requisite?
Are you kidding? I come here to read it. Bettern church! The Golden Gordon Gekko too.
Got in at $800. I got more at $1050, then $1095. Thanks for the encouragement, the water is fine.
Splash, splash, party, party Chumba, don't bogart, pass me that (while Rome fucking burns). Twisted stuff.
Brilliant. Let's go out, tell more lies. Let's go out and call paper at 20 cents on the dollar actual PAR value. Let's go out and lie about foreclosure numbers and credit deterioration. Let's go out and like that we're going to protect the dollar.
Bad news for Sparky and the Sparkettes in D.C.:
When our central banksters have pissed off the last bond buyer, we have to buy our own paper or issue trade dollars again, leaving the civlian flunkies with the crappy dollars.
Care to guess which route the banksters take?
Friends, we are in a massive government banker induced bubble in bonds and gold after oil, commodities, Dot.com and real estate. Like most government schemes, it may be only a matter of time before people hit click sell button, only to find there are no buyers. People go mad in crowds and wake up one by one...
One thing i do not understand is way the european (and rest of the world) markets. Goes up in tandem with the dollars decline ?
I thought this was someting that would be bearish.
Please explain , anybody
Can anyone explain why the eurpean markets goes up in tandem with the falling dollar ?
I just don't get that.
Dollar carry trade
Thank you :)
As gold melts up, the USD (dixie) is making fresh lows.
For those that have not repudiated relational gray matter functionality, line up the readers in between:
S&P bottom of 666.79 * Golden ratio (10/6 rounded to 1.67) = 1113.54
Question is, are you buying gold bars, or Tungsten ;-)
Yea what is that about?
Guess none of you were around the last time Gold went wild.
Some made money but most just could not accept the quick reversal when gold broke and held on to their positions and got hosed.
I'm not say'n Gold is not going to go higher, but go back a few decades and look at the gold charts.
When Gold breaks there's very little warning.
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