2010: whay kind of a year?

There seem to be two types of Investment Prognosticators: a) the ones that predict inflation coming, gold prices soaring and the economy doing poorly and b) the ones who predict that the economy will recover, the dollar stabilize, gold to reach $1,500 then go into a permanent decline.

BTW, most prognosticators believe that gold will hit $1500 next year; it's what happens after where they disagree. So, it is critical to look at the underlining fundamentals of the economy.

The US financial world was thrown into a dive with the change of the accounting system on Sep 15, 2008. It allowed Obama's socialists to nationalize some banks, the automobile industry, part of the insurance industry and student loans. Through the zombie banks controlled by the Obama regime, currency and gold price can be manipulated as we have just witnessed. When oil contracts were bought up prior to the 2008 election, it softened the economy and made us more vulnerable to the financial attack of Sep 15, 2008. Now, it is contracts to buy dollars that was used to produce the dollar rally. Were these moves instigated by the Chinese so they could rid of their dollars and buy gold? Or, was it done by the Obama regime or some of its proxies to make us believe that printing tons of money is reviving the economy? We know how it is being done, we just do not know by whom.

The economic fundamentals are terrible. The regime is increasing the national debt at unprecedented rates, it wants to transfer income from high earners to the government by raising taxes. Such moves hurt the economy. The regime wants to nationalize medical care and use it as a form of taxation. And, of course, the Bush tax cuts will expire.

In short, taxes will reduce the money in economically competent hands and transfer it into economically incompetent hands. Nearly forty percent of Federal expenditures are financed through deficit spending. We are warned that China and the rest of the world are tapped out and we can not figure on them to finance the reckless spending of this regime, PRINTING MONEY NEVER WORKS.

While, people caution us NOT TO expect inflation (because of the artificially induced deflation of the banks), some pretty remarkable inflation has been noted in the last 20 months. These are government figures and may even underestimate inflation. So, how much did prices go up? Food and beverage: 5.6%, cereal and bakery: 11.5%, Sugar and sweets: 11.8%, Cooking oil: 11.6%, medical care: 7.1%, medical services: 14.0%, hospital: 14%, education: 10%; books and supplies: 14.9%.

My predictions: the driving force for everything will be the $2T in expiring Treasury bills that need to be rolled over and the $1.5T deficit that Treasury needs to finance. How to finance this huge amount? There is not enough, excess money in the world to finance this, so this is what Treasury will do. The FED will create a computer entry of $3.5T (and ironically call it part of their assets) and loan this to the zombie banks they control. The FED will pay interest on this - maybe to the tune of $100B. The banks will be happy to take the money. Nobody will be the wiser right? And if foreigners catch on to the scam, there is nothing they can do. And according to the Liberal cant 'we owe this to ourselves, don't we?' [How we Conservatives missed this I don't know. All this business of working and saving is not necessary. All we have to do is print money.] But, of course, foreigners will know and we will know. The US government will obtain ownership of part of everybody's goods, so everyone will try to recoup their loss by charging more. The price of everything will go up. Do you think that Democrats are too dumb to notice? IMO, Democrats are dumb, but not that dumb. And we will see the beginning of a price/wage spiral. To stop it, the FED will raise interest rates, which will crush the Stock Market and the economy.

The cycle theory predicts that faced with the economic collapse, the regime will loosen interest rates again, continue to print money and put us into the hyperinflationary stagflation pioneered by Jimmy Carter.

So, what is the time table? Lots will happen in the first part of next year. The Stock Market will probably blow off in the first six months and then interest rates will rise by the middle of the year. Bonds will crash soon after, then the Stock Market. The inflating of the money supply even more will come in 2011 and gold will reach its peak of at least 2,200/oz, maybe even as high as 5,000/oz.

How governments rob the people.

Ever since ancient times, governments have robbed the people by cheapening the money. With gold and silver currency, they would make the coins smaller or dilute it with another metal. For example, the ancient Roman coin the Denarius was made with 4.5g of silver in 211 BC. In Jesus' time a denarius was worth the daily wage of an unskilled laborer (about $21). By the second century the silver content of the denarius was reduced to 3.9g and further reduced by the Emperor Nero to 3.4g. In 215, the antoninianus was introduced, nominally worth two denarii. However, the silver content was equal to only 1.5 times that of the denarius. This resulted in the population hoarding the silver denarius and prices went up when payment was made in antoninianuses. By 270-275 the denarius became a bronze coin. The antoninianus at first was silver then bronze washed with silver. Eventually, both the denarius and the antoninianus were made from melted down bronze. Vast quantities were made and they became worthless. Roman coins were debased so the Emperors could provide bread and circuses to the average population until the State weakened so much it could no longer defend itself.

Modern money is made from paper and is backed by the taxing authority of the nation that makes them. Modern governments also buy the loyalty of the populace by the promise of something for nothing. Such is first financed from higher taxes, then from borrowed money, then from printing more currency. That is the first phase of hyperinflation. When about 40% of spending comes from printing money, the nation is near the start of hyperinflation.

So, governments steal our money by cheapening the currency. But, there is one currency that governments can not print and that is gold. And as paper currency is cheapened the price of gold rises in those (paper) currencies, just as prices rose in Rome when the currency was cheapened.

Inflation, devaluation and exchange of only a limited amount of currency for "new" currency are the methods governments use to steal the money of those who work, to gain the support of those who keep them in power. The US has a large leverage internationally in determining inflation rates. As the value of the dollar lowers, others countries feel obliged to cheapen their currency so they can continue to sell at a predetermined rate. For example, the KIWI dollar rose against the US dollar and the Govt of New Zealand shorted its own currency to bring its value down. Thus, the inflation being created by the Obamabots is being internationalized.

There is one currency that can not be defaced or printed and that is pure gold and silver. That is why the value of gold has risen against all currencies. Since 2000 gold has increased in value as follows: Chinese Yuan (+200%), US dollar (+260%), Canadian Dollar (178%), Russian ruble (360%), Mexican Peso (417%), Swiss Franc (155%). As the US dollar is printed in vast quantities, its value is set to plummet. Do not be fooled by the temporary rally in the US dollar. No one escapes the laws of economics.

Lessons from History.

One of the lessons we have learned from history is that a seemingly strong regime - one built on a faulty idea - will look the strongest before its downfall. Such was the downfall of the Evil Empire of the Soviet Union, based on the idea of state ownership and central planning. Before the Soviet Union fell, it was proclaimed by the Mainstream Media and our intellectuals as the "Way of the Future." When the dust settled from the fall of the Berlin Wall, we found out that the seemingly invincible strength of Communism was a mirage, carefully crafted by Communist image makers and dutifully transmitted to us by the "mainstream" media.

What we see unfolding now is the economic unraveling of Social Democracy. To be sure, the idea of a government perpetuating itself via printing money and sustaining itself is not new. But the evidence of its unraveling becomes clearer every day. We did not see the coming of the demise of the Soviet Union, because the Communists maintained absolute secrecy, but Social Democrats are leaving footprints in the snow. The election of Barak Hussein to the US Presidency has opened the door to a terminal form of hubris. The throwing of the emergency break on the US economy in 2008 Sep 15 started a chain of events that will discredit not merely the Socialists Of America, but the Socialists of Europe. What is happening is the demise of the US dollar, which will bring down the currencies of Western Europe as well.

And this brings us to another lesson of history. You can delay the inevitable and make it appear that the laws of economics have been repealed (or at least suspended) by producing events that seem to buttress a regime built on thin air, but when economic realities assert themselves, the change is swift. Such is the case of the US dollar.

We have seen a steady increase in the value of gold vs the US dollar. The reason is the tremendous increase in the amount of US currency being generated. Now we see a TEMPORARY reversal and the value of the dollar going up. What gives? Can the Obama regime reduce gold prices by printing more paper money? NO, but they can create the impression. The question is HOW?

The lowest graph shows you the volume of options to purchase US dollars. Note the tremendous increase in volume in November and December. At the clip of 15-20M shares of UUP a day (at a cost of $350 - $450 million/day), the price of the dollar can be driven up. You see in the second graph from the bottom that this is indeed the case. Both, UUP and the USD have risen a fair bit. At the same time, the price of gold has fallen, because it is denominated in US dollars. This is a classic tail wags the dog scenario.

There is another factor to consider. The RSI (Relative Strength Index) tells us whether price changes are supported by money inflow or are simply transitory trends, soon to be reversed. The RSI is depicted in the top graph. Values are usually between 30 and 70. Values below 30 mean the stock is oversold (rally is expected) and values above 70 means the stock is overbought (a drop is expected). All three (UUP, USD and Gold) are out of their normal channels: UUP and the USD are overbought and Gold is oversold. We are having a second chance to get into gold cheap.

Who is responsible for the manipulation? We do not know.

Finally, look at the S&P 500 index (last graph). We see it is topping out.

So, the fundamentals remain the same. The Obama regime does not dare to increase interest rates, because it is afraid of a Stock Market Crash and a double dip recession in an election year. That will hasten the fall of the dollar. Printing more money and "monetizing" the debt will also hasten the dollar's demise. The Social Democrats of Europe are scrambling to keep up with the cheapening of the dollar. The whole structure of Socialism is crumbling before our eyes.

Gold, USD and the DOW.

Gold has been on a rise since 2001(lowest figure). The way this figure is plotted is logarhytmic which reduces the actual rise to a percentage rise. The fact that this line is nearly a straight line reflects that gold prices are rising a steady percentage a year. This is a reflection of the fact that the FED increases paper money a certain percentage per year. Note that there were times when the increase in gold prices corrected; such as in 2006 (when gold dropped from 700 to 550) and in 2008, when gold price dropped from 1000 to 700.

The graph one up from that is the relatively recent price change in gold. This is plotted on a linear scale. Pls note that gold broke out of its wedge pattern in September this year and did two rather classic upward moves: about 80 dollars up and 30 dollars down. In November, however, gold moved up as expected, but instead of correcting back, it added another month's worth of up move and then began to correct. Anti-gold forecasters touted the upmove as a parabolic blow off before the top. Gold began to slide since that time and is heading down today, erasing yesterday's gain.

Before you believe the pundits that gold is terminally on its way down, let me tell you about some anomalies and the fundamentals. Gold miner stocks are resisting the move down in gold, minimizing the drop on the downside and maximizing their upmoves (see the next graph up, THM, which is my favorite gold miner). The second anomalie is the tremendous change in UUP, contracts to buy dollars. Buying UUP is wiping out shorts in the dollar and the activity in UUP may be driving the rise in the dollar, which in turn lowers the value of gold. How far can that go? Quite far apparently, but somebody will suffer tremendous losses eventually. Of course, when the US govt covers your losses via bank loans on which they pay profits... The Obama regime is determined to show that the Country and its economy are doing well, but that is an illusion. The third anomalie is what is happening to gold and dollar prices. Yesterday, gold went up in the Asian markets, today there is a big down move in New York. Are the Asians given a chance to get out of the dollar at a good price?

Finally, gold prices rise to reflect the printing of paper currency. This trend can be countervailed for a time, but not permanently.

At the present, gold prices briefly dropped below 1100. Is this the bottom? I do not know, but I still believe that gold will hit 1500/oz next year. The DOW? One very knowledgeable analyst says that the DOW needs to rise to 10,800 for us too be out of the Bear Market. We are near that, but it remains elusive.

Winter Storm Algore.

Do I really want to string up Algore? Not really. It is just a poetic exaggeration. But, a long time in the poky is definitely deserved for his crimes.

Worldwide cooling continues.

A month or so ago, temperatures fell to -40F in Alaska. This week, it is Western Canada. Temperatures as low as -50 are reported in some locations. The Province of Ontario is paralysed due to heavy snow, some places chest high. Only main roads are open for now.

Anomalous cold is reported from Victoria Province in Australia as well. There has been a dusting of snow in Melbourne and Baw Baw Mountain even though Australia is only two weeks away from Summer.

Winter Storm Algore was harsh on the Midwest and New England. Cape Cod is reporting record numbers of stranded dolphins and a certain kind of turtles.

All these are fine ways to celebrate the climate fraud meeting in Copenhagen, where European commies have gathered demanding shutdown of industries, ZPG and other anti people initiatives dear to Leftist hearts.

Obama's impeacable offenses.

1. Offense #1. Failure to defend the Nation. Breech of Presidential oath.

The publication of the manual on how airport security works reveals for terrorists how to get through airport security(Brian Ross, Dec 8, 2009, ABC). As such, this fact imperils Americans traveling by air. Attempts to pass this off as an inadvertant breech is simply nonsense. Such materials are top secret and it takes a willful act to put them on the Internet. Obama is ultimately responsible in the failure to maintain proper supervision.

2. Offense #2. Misuse of public funds. Paying off Hillary's campaign debt from public funds.
The offense is alleged to be that contracts awarded to Mark Penn are in fact paybacks for Hillary's campaign indebtedness incurred to Mr Penn for her unsuccesful nomination bid. While, the report (The Hill, Dec 10) claims that Hillary's loan was repaid in August, payment of her campaign debts was one of the conditions Hillary set for supporting Obama.

Stock Market alert.

The Stock Market and the gold markets are about to get a correction. Not yet a reversal. The fundamentals have not changed, but trader sentiment has. This is why it is important:

When bulls and bears are equal, there is little opportunity. But, when sentiment tips to one side or the other, bet the other side. Here is how it works. When sentiment becomes very bullish, there is hardly anyone left to buy, so prices drop. When sentiment turns overwhelmingly bearish, there is no one to sell and prices go up. Right now everyone is invested with little money on the sideline left to buy. Gold has been up from 860 to over 1200. So, everyone with cash has bought in. Now comes the drop in stock prices and gold prices and those with UUP shares will make a bundle.

Financial media will prattle about the effect of the Dubai World default, the effect on financial, etc. But, that's all just to make themselves look important and wise. The real reason is that people are short of cash.

The fundamentals have not changed though. The FED created $2T trillion new currency last year out of the thin air and will create about $3.5T next year. Anyone who thinks that will make the dollar stronger is a fool.

Russian adventurism on the rise.

Russian adventurism is once again on the rise. Will it go as far as re-invading the Baltics and Ukraine? Can not tell at this point. The machinations of PM Putin and the rivalry of Pres Medvedev and PM Putin to run the country encourages each to sound more pro-Russian than the other. There are two bones of contention between Russia on the one hand and Ukraine and the Baltics on the other. One is the discriminatory treatment of Russians who live in Latvia, Lithuania and Estonia. This is a legitimate grievance of Russia, though these populations were transplanted into the Baltics to colonize them for Russia. The second issue is the three ring circus of what WWII meant for these people. One the one hand, there are the Russians and those pro-Russian now, to whom the invasion by the Soviet Union was a "liberation." Then there are those who side with the local fascists and resister to Russia to whom the Russian invasion was just that - an invasion. The third ring is the population who regarded both the Germans and the Soviets as invaders and occupiers. This issue can be stoked, manipulated and used by Russia to re-invade. At the present time, the Russians are using groups of Socialists to condemn those who celebrate resistance to Russia as "fascists." This is done to irritate pro-nationalist elements so the disagreement escalates into violence. The Obamabots, as can be expected remain clueless.

Another area of rising tension is the increased adventurism of Russia in the Balkans. Americans should understand that the occupation of Kosovo by Albanian invaders, the subsequent ethnic cleansing of Albanians first then Serbs and the overthrow of the agreement to keep Kosovo part of Serbia gives a legitimate reason for the Serbs and the Russians to invade Kosovo.

The Bush administration made huge blunders in both Kosovo and Georgia. By continuing the pro-Albanian policy of the Clinton years and accepting the Albanian declaration of independence for Kosovo, the stage is set for an invasion of Kosovo. And by egging on the idiotic leadership of Georgia, a strong military response was assured by the Russians. No idiot should have missed the consequence that attacking Russian soldiers in South Ossetia would draw a strong response.

The failure of US governments to co-operate with Russia to produce a situation that everyone can live with has played into the hands of people who see politics as an all or nothing proposition. That always leads to war.

The latest on the dollar and gold.

Gold took a tumble Friday, going from 122x to 1162. As I write this, the gold price is fixed at 1157 in Asia and Europe. Here is my take on this:

For three months now we have been treated to scare scenarios as to how gold might tumble, because it is merely a commodity, earns no interest and will tumble when good economic news comes around. So, along comes the Dubai financial massacre and gold tumbles momentarily then recovers next day. Then we have this Friday and tonight when gold tumbles a total of 5%. What might be happening?

I think that people got a few facts incorrect. First, the dollar and gold move in opposite ways, so you can decrease gold price by increasing the price of the dollar. How? By buying up options in the dollar. In fact, I produced the graphic that showed a big upsurge in the volume of UUP (these are USD options to buy). So then, the buying call options on the dollar moved the dollar up and shorts had to cover. Friday's rise in the dollar was in fact a shorts squeeze. And that dropped gold.

What will happen now? Well, I think the rise in the USD is merely temporary and the shorts squeeze will reduce their ability to keep up the price of the dollar. At some point, the sale of the USD will take off again and the dollar will weaken. Meantime, use the dip to buy more gold or buy into gold mining stocks.

Will there be snow?

Black pea soup (charro bean style).

Charro bean soup is probably best to make with a light-colored bean, if you want to stay authentic. But, you can use black-eyed peas, or, as in this case, black peas. When using black peas, the resultant soup is black, thick and spicy.

Ingredients: 1/2 lb black pea, 1/2 gallon broth, 1 large onion chopped, 4 jalopenos (make sure to discard seeds and veins), 3 strips of smoked, thick bacon (Hungarian smoked bacon is best for this), 1 can chopped tomatos, 1 chicken boullion, 1/2 cup chopped cilantro leaves and about 1 tbsp salt.

Method: Remove rocks (if any) from the beans and soak them overnight in water. Rinse them under hot water and simmer in 1/2 gallon broth (chicken or turkey) for about two hours. Fry the bacon strips and the onions. About half an hour before serving, add everything else except the cilantro. That is added just before serving.

We ate this with flour tortillas.

Dubai World lessons.

One can only marvel at the audacity of the planners and architects of Dubai. The size and scale of the buildings and undertaking is simply colossal. Apart from the two artificial islands, Dubai had an indoor ski slope, an underwater hotel, a space port, a sports city, numerous skyscrapers and hotels and an area that was to recreate the seven wonders of the Earth. Disneyland on a stupendous scale.

Yet, there was something nagging me even before I read that Dubai World, the owner of the company building this city is bankrupt. How could they attract enough people to occupy the apartments that went for 2.5-5 million and the villas on the artificial islands that went for a lot more? Not only that, but how were the people (the occupants) to maintain cash flow to finance such lifestyles? Along came the Obama meltdown and Dubai World is in hock for $60B.

Did anyone wonder about the feasibility of the financing? Or, were they just enamoured with the idea of a planned community? Some banks (supposedly the British and other European banks) did not do enough due diligence. Dubai World seems to have been built in the air. Even sand had to be imported! It shows you what happens when people disregard realities of finance and just forge ahead because they love the idea.

The reference to Lo-Ruhama.

Those of you not familiar with the Bible, let me explain the reference.

Hosea was a son of Beeri, in the days of Uzziah(792-740), Jotham(750-735), Ahaz (735-715), and Hezekiah (715-686) -kings of Judah and king Jeroboam of Israel (793-753). The Lord asked Hosea to marry a harlot, so Hosea would experience the betrayel God felt at the hands of Israel. The Northern kingdom had become just like its Canaanite neighbors, its kings reaching the throne through murder, the people engaged in evil practices, including abortion and idol worship.

So, Hosea married a harlot by the name of Gomer, who bore him three children. God told Hosea to name the first one Jezreel, symbolizing the breaking of the bow of Israel (of its army) by Tiglath-Pilaser III of Assyria and scattering the people. The second child born to Gomer (a girl) was named Lo-Ruhamah. In Hebrew it means "she has received no compassion" and it refers to God being through with forgiving the people of the Northern kingdom. Gomer's third child of harlotry was also a boy and God asked Hosea to name him "Lo-Ammi," literally meaning not my people. This was the severest judgement from God, the nullifying of the Covenant with these people.

The naming of the poem Lo-Ruhamah means that God is through forgiving us and is punishing us by turning us over to evil desires of coveting and theft through "redistribution." The reference to "Joan of Arc" is to a female candidate who might lead us away from the punishment - if we repent.

Lo-Ruhamah

Review of concepts and predictions. Dec 2009.

If you have been reading these posts, you have come along on a journey to understand economic concepts, moves in the financial world and their causes. In this journey, I first unearthed the relationship MxV=QxP, which is the relationship of the money supply (M), money velocity (V), the gross national product (Q) and prices (P). No, I did not discover this, others did. But, I found out that the adoption of the 'mark to market' accounting system on Sep 15, 2008, is what brought V down very sharply and drastically dropped Q. This was a deliberate act to elect the communist Obama and blame the economic catastrophe on George Bush. The ploy worked.

The first year of the Obama regime was devoted to nationalizing the big banks via "rescuing them;" by firs declaring some of their assets worth zero then giving them monopoly money to replenish their reserves. The same thing was done to the insurance industry. GM and Chrysler were "bailed out" then declared bankrupt by puppets installed by the regime. Shareholders and creditors of GM and Chrysler were deprived of their properties. This was nationalization - pure and simple.

So, in a sense, the Obama regime is a continuation of the Roosevelt era and only the nationalization of health care remains to be done to complete the transformation of the US from a Capitalist (economically free) country into a Socialist entity. Once that is done, the regime will turn to make its rule permanent: 1. institutionalize voting fraud by the likes of ACORN, so it can not be voted out of power; 2. bring in millions of illegal aliens who have little or no concept of how Capitalism works and respond to the compesino/Patron relationship; 3. raise taxes to 50% on the average American; 4. disarm the population. The Socialists would also like to censor free expression, so only the regime and its supporters in the Media can be heard.

The hardest thing for an average American to understand is that the economic hardships visited upon us are done on purpose to force us into accepting Socialism. The Socialists (Democrats) want to downsize America's economic and military might and one way of accomplishing this is to reduce the value of the dollar. Another way of doing it is to increase the price of energy.

The process of "rescuing" our economy has already raised the price of gold and is lowering the value of the dollar. At the bottom of this is the expansion of the money supply. I have documented the explosion of the money supply. I have found out that real inflation is shown in the HAI Monetary Inflation Index, which has already risen, whereas the CPI (consumer price index) lags the HAI.

Along the way, I gathered the best predictions re the economy and gold prices. The economy continues to stagnate and the 2.5% rise in GDP is all due to govt spending. On Sep 2, I gave you a prediction of the DOW going to 12,000, mostly due to the effect of increased money supply. I predicted gold to go to $1,300/oz, based on the inverse head and shoulder technical formation and the size of the head. I reiterated these predictions in posts of Sep 11 and Oct 6. This morning's gold price reached $1,2009/oz.

I will make further predictions in Jan 2010, God willing. Gold will continue to rise and so will the DOW. Nothing goes up in a straight line, so there will be drops along the way.

Do not listen to regime shills who want to keep the price of gold down. Expect the 'mark to market' rule to be applied to commercial real estate as the regime will nationalize a lot of that. Keep the faith.

Inflation is here.

If you listen to the airheads that appear on TV networks (ABC,NBC,CBS,MSNBC and the Clinton News Network), the economy is doing better and inflation is under control. We know that these people lie, but how? First, the Consumer Price Index (CPI) does not include energy prices and food costs. The true measure of prices is measured by another index; the actual buying power of the US Dollar. Actual buying power of the dollar has been decreasing (so the index of prices has been rising), while the value of the dollar has been decreasing. These are documented in the first two graphs. [I apologize for not being able to move the graphs, but Blogger has been "improved" and it no longer moves graphs or allows text to be imported.] The 2.5% rise in GNP is also deceptive. You see, the GNP includes the Nation's output AND GOVERNMENT SPENDING. There is little to no rise in output, the 2.5% growth in the GNP is due to increased government spending.

The loss of the value of the dollar is also reflected in the rise of the value of gold. Gold is the money of the free market, while the dollar is the money of the government, now in the control of Obama Socialists and radicals. The US govt has created $11T credit for guaranteeing various financial entities and doubled the monetary base. Inflation (in the CPI) is guaranteed. Inflation in real terms is already under way.

Gold bull markets have 3 phases: 1. currency devaluation; 2. the investment phase and 3. the mania stage. We are into phase two and the anti-gold cabal is less able to manipulate gold prices down. But, we are also beginning to see signs of phase three as mints have stopped minting gold coins (gold shortage) and central banks are beginning to hoard gold. How high will gold go? In a previous post I have shown you the inverse head and shoulder formation that predicted a rise of $300/oz at that point. We are almost to that point, but some experts I read predict a gold price of #1300/oz by year's end. How about the top of the gold price? That is a bit more difficult. The last serious gold bull market took the price of gold to almost $2,000/oz. Using that slope for the current bull market would yield a calculated price of over $5,000/oz. If the world finds out that the US govt no longer controls the alleged stockpile of $300B worth of bouillon, that alone will double gold price.

In the meantime, expect the Obama shills to pull all kinds of stunts to try to keep down gold prices. One of these stunts is the manipulation of gold price via flooding the market with paper gold (promissory notes to deliver gold). That is dangerous for the regime, as people can demand delivery. Another stunt is to create rumors that would keep gold prices down. Such as the rumor that Chinese banks are insolvent. (Not true, Chinese bank deposits are increasing faster than banks are making loans). How about the suggestion that what we are experiencing is a bubble in gold prices? Nice touch, but no cigar. The total asset value of the US is 145T and the total value of the gold bouillons is $5.7T (153,000 tons). Of that $3.6T is traded as commodity (96,200 tons), $1.1T is owned by central banks (26,700 tons) and $1.0T is in private hands (24,199 tons). A bubble? Hardly.

US Bankruptcy looms.

The Presidency of Barak Hussein Obama is beginning to resemble the kingship of King David's son Absalom. Absalom overthrew his Father and David fled with 600 of his warriors. But before he fled, he asked a trusted advisor to stay behind and give Absolom bad advice. Hushai did just that and his counsel to Absalom to delay the pursuit of David, allowed David to survive and fight another day.

Had Obama acted as a regular Democrat (like Bill Clinton), his re-election would have been assured. Instead, Obama is getting bad advice from Gaithner and FED Chairman Bernanke. The result of this bad advice will be the bankruptcy of the United States, on top of the economic hardship our people endure.

America's banks and housing were declared bankrupt by changing the accounting system. The Obama regime "replaced" the capital in these banks to the tune of $13T. That much of our national wealth was destroyed by the traitors who run our government. But, that is just the beginning. The Obama regime doubled federal spending and tripled the deficit.

The US National Debt now totals $12T. Of that, $2T needs to be rolled over within 12 months. What does this mean exactly? It means that the government needs $2T new money to pay off that debt, or sell that much new Treasury Bills in effect to "roll over" the $2T debt. Can the govt do it? The simple answer in "NO." Why not?

The Greenspan-Giudotti rule (published in 1999) states that in order for a government to avoid default, it must have 100% coverage in hard currency. So, how much hard assets does the US own? At the current rate (foreign govts buy 44% of our debt), 44% of the $2T that needs to be rolled over and it amounts to $880B. And how much hard currency assets does the US have? Let's see. The total amount of gold we have amounts to $300B (note billion, not trillion). We also have $58B in the Strategic Oil Reserve and $136B in foreign currency. That is only $490B, so the US govt will be in default.

When this happens, the currency of the Debtor and its bonds become worthless. Traders will short the Dollar and Treasury Bills. They are already doing it and we see the value of the dollar dropping. The US govt has the following choices: 1. increase the rate that Treasuries yield - this will drive up interest rates and crash the Stock Market and the economy; 2. do nothing - this will put us into default (bankrupt in other words); or 3. "monetize" the debt, i.e. print $3.5T in currency - this will set off hyperinflation.

Economists will be quick to point out that the FED has already "monetized" $12T without setting off hyperinflation. And that is correct. But, the coming "monetisation" will be different than the one done by the Obama regime when it first came to power. The first "monetisation" involved declaring bank assets valued zero (by using the 'mark to market' accounting) and replacing these assets by printed currency. In fact, ownership of $12T in bank assets was transferred to the government, so in fact there was no net increase in currency, just a transfer of ownership - a back door nationalization. The second "monetisation," however will be printing currency with nothing backing it. That will set off hyperinflation.

Americans have no clue how the economy works, how finances work, so the Media can spin things until the disaster can no longer be avoided. It will usher in interesting times. There is a Chinese saying: may you live in interesting times. It is a polite curse.

The young and the CHANGE

Have you heard the one about describing how the Post would cover the end of the world story? (blacks and women worst effected?)

So, I wondered how the Post would cover the reports that the young and minorities suffer the most from the CHANGE. Unemployment among young blacks is 35%, 11.9% even in the District of Columbia. Unemployment is also high among the young of all races. The Post labels this story "Blacks hit by economy's punch," which lives down to expectations of the Post. The Post also collects pronouncements from various sources that attribute blacks' plight to discrimination.

What the Post does not mention is that young black men have a rate of nearly 25% of being in jail, on parole or awaiting court proceedings. It is difficult for people in that category to get jobs even in times when the economy is doing great, but it is much harder during bad times.

Many of us warned minorities (as well as others) that Obamanomics would recreate the Depression. They would not listen and were taken in. Unfortunately, the warnings are coming true.

Why gold will soar in price.

One of the most poignant stories in the Bible is the fall of Man; of Adam and Eve. The original sin was the disobedience of God to not eat the forbidden fruit. All sin is a disobedience of God. And the wages of sin is death. There was another wrinkle though, namely, that Eve and her female descendants would have a tough time delivering children. Someone compared the birth of a child to passing a bowling ball through a straw - a process that is obviously difficult and painful.

Almost as difficult will be the process of people acquiring gold to use as currency. You see the US government has fallen into the hands of a bunch of communists who are nationalizing banks and industries and "pay" for it by printing money. These communists want to destroy Capitalism and in its place build a society that is more "just," more equal. The destruction part is easy and we have seen it in several countries. The rebuilding will never happen, unless we get rid of the communists. The accompanying effect of this "CHANGE" is the destruction of the dollar. How easy will it be for people to obtain gold?

Let's run some numbers. The value of all the gold in the world is $5T. Our GNP is about $9T, our national debt is $12T, the "bailouts" (i.e. the cost of nationalizing GM, Chrysler, AIG and the banks and mortgage companies) cost $13T and the world bailout costs is $20T. The value of WalMart and Microsoft each is set about the value of the total gold supply in the world. I am telling you this to illustrate that the world's supply of gold is limited.

An ideal currency is one that is limited in supply and can not be counterfeited by the government. If we plotted the numbers I just cited as a bar graph, the annual gold production would be less than the thickness of the baseline. The time will come when people realize that the governments are cheating them by printing currency and that the only way to avoid being ripped off is owning gold (or gold mines). One writer compared the selling of the world's gold like passing Niagara through a straw. The results? A lot of pain and rising prices.

How do you like the CHANGE now?

I remember the hype during the election: the TV showing black men crying while listening to the platitudes of "HOPE" and "CHANGE." So, how is it working out for them?

I begin by quoting the writings of Mr Marvin Clark, Manager of Monsoon Wealth Management in the 11/20 issue of Seeking Alpha. Just repeating the title of his article is enough: 10 Reasons to Believe That We're in a Depression. Mr Clark has yet to make the connection between the painful changes and Obamanomics, but he does not like the CHANGE. And he has little HOPE. Oh, did I forget to tell you? Unless the Arizona sun turns your suntan really deep, Mr Clark is as black as the king of spades.

There is another interesting wrinkle. The House is marking up a financial regulations bill under the "leadership" of Banking Queen Barney Frank. And the Black Caucus put a hold on proceedings. They, too, are unhappy with the "CHANGE." No, they also fail to connect the dots and understand that the "CHANGE" is an outcome of the radical economic policy of the Obama regime.

Recognition that a problem exists is the first step in recognizing the connection between the results and the ideology that drives the regime.

Will he apologize for winning WWII?

His posture suggests it.

This is what japanguide.com says about bowing in Japan:

"It is also common to bow to express thanks, to apologize, to make a request or to ask someone a favor."

This is NOT Obama's first bow as an inferior. There is his picture of bowing to the King of Saudi Arabia:

Record Alaska cold grips far north.

Temperatures as low as -45! and -50! are being recorded in Alaska. Polar bears freezing? Certainly not drowning!

Is Algore in Alska lecturing on global warming? How come this scam artist Algore is not being prosecuted for racketeering? Everyone connected to the global warming hoax should be punished and that includes not only Algore, but members of the Media, Democrats in Congress, etc.

Deficit Reduction: the latest Obama scam.

Do you believe that Da Man who jacked up deficits to $1.5T/yr really wants to reduce spending? NAH! Obama does not have a plan to reduce the deficit, he has a plan to raise taxes and sell it as "deficit reduction."

Geezer predictions on gold, dollar and the market.

My last prediction was that gold would hit 1120 intraday before retreating for the rest of the month. Today, gold price actually hit 1123.33 before retreating. My prediction is that it will retreat to 1090 before rallying again in December.

The dollar staged a small rally today, moving almost a half a point to 75.7. This is due to the pouring of money into UUP, the ETF that has shares that are equivalent to contracts to buy dollars. In other words, this is manipulative and is not due to market forces that would make the dollar stronger. I likened this sleight of hand move to a desparate man pulling on one leg to get out of a mudhole. While, it is possible to raise one leg, it simply drives the other leg down deeper. According to standard technical analysis, the dollar would have to move past 76.5 to be considered in a real rally. It might. But, in the long run, the rally is not sustainable.

In line with the rally of the dollar, oil moved down.

Gold mining stocks had moved lower on the uptick in the dollar, but the down move is in line with the drop in gold. Let me explain this in greater depth. During September and October, gold miners increased in value far faster than gold itself, abot 4-10 times faster than gold. The reason for this is that the value of a gold miner discounts the price of the cost of mining AND the cost of exploration. As gold moves below 1100 during the next two weeks, I expect gold miners to drop some but not as much as they did during October.

One more comment. The movement of gold is deliberate and orderly. Some people are controlling it. There are plenty of suspects.

Republicans need courage.

There are a few people who are beginning to see that a bad economy with high unemployment and inflation and the devaluation of the dollar IS THE POLICY of the Obama regime. So, why are Republicans NOT saying it? Why are they repeating the BIG LIE of the media that our economic troubles are somehow "inherited," that the recession began in 2007 and the other lies peddled by the Media? Lacking a backbone I guess.

Palin: Liberals' fear.

Sarah Palin is the Liberals' greatest fear. She is a strong woman, sticks to her belief and can not be manipulated by the Liberal Media. She will not "move to the center" she will not play footsie with the phonies of the Scozzafavas to curry favor with Liberals. She represents the average American, I mean she is one and Liberals fear and loathe the average American.

And that is why Liberals attack her any chance they get, even when they make themselves ridiculous. Like when a character on NCIS asks the mocking question: do you think you are Sarah Palin?

Palin remains popular, a drawer of crowds and devoted followers.

Why the scam to improve the dollar?

Someone reminded me that the intention of the Obama regime to devalue the dollar so we can pretend that we can repay our debts would seem to contradict the effort to produce a rally in the dollar by buying up dollar options.

Let's remember that the regime has several goals, all of which are served by devaluing the dollar. First, the purpose of a counterfeiter is to obtain part of the Nation's wealth for little effort. That is one of the goals of the biggest counterfeiter: the FED. Second, devaluing the dollar allows the regime to use the counterfeit money to obtain control or ownership of large swats of industry. Third, America's wealth is downsized by transferring it to others whose currencies are not downsized (the Obamabots believe that it is not fair that Americans have so much). Finally, the printing of money is needed to make payments to those the regime hopes to enlist and to keep the economy from collapsing.

All these are being achieved by printing more money (i. e. by devaluing the dollar). So, why promote buying up options that increase the value of the dollar? Timing, folks, timing. The regime and its mainstream media propagandists believe that the economic crises is easing, that it is only a matter of a couple of months until the economy picks up. Hence, it is necessary to stop the slide of the dollar and resume the slide in the new year.

Is it working? So far, NO! Gold is up another $13 this morning to $1109.50/oz. Expect option trading to increase.

Obama and the Berlin Wall.

The Berlin Wall for years symbolized the division of Europe and the inability of Communism to become palatable to the people who were locked up behing it. That is why the fall of the Berlin Wall was an important and in a way euphoric event. It is celebrated today and Barak Hussein was invited to attend. He REFUSED. WHY!

Obama does not want to celebrate the fall of the Berlin Wall, because his ideologicam comrades had lost. As simple as that.

Attempts to rescue the $ temporarily.

Shadowy forces can manipulate markets. The latest finaglings come to light from the writings of Philip Davis in Seeking Alpha dated yesterday, Nov 7, 2009).

The Obama regime has a dilemma: it wants to control the economy (follow the German model of the 1930s), which requires the printing of enormous sums of money. Deficit is exploding and now accounts for about 40% of the budget. This is the magic number for hyperinflation. And here is the dilemma: if the regime does what is appropriate to stop inflation (raise interes rates which would stabilize the dollar), it will crash the Stock Market and put the economy in another tailspin. Considering what happened in New Jersey and Virginia, the regime is afraid to follow this path. On the other hand, if it continues on the same path, we will see a further drop in the value of the dollar and skyrocketing of gold prices. That's the dilemma.

That is why an effort is under way to rescue the dollar. Mr Davis reports a very large increase in the November and December volume of call options in UUP, the dollar index. These options are contracts to buy dollars at a certain value. Such an option is far cheaper than to buy a bundle of currency, but its effect is AS IF SOMEONE ACTUALLY BOUGHT THE CURRENCY. Of course, if the dollar continues to plunge, the institutions buying the contracts can lose all what they paid for the option, but they could produce a temporary rally in the dollar

and repress commodity prices, including the price of gold. Gold prices briefly hit $1,100 on Friday and may yet hit my forecast of 1120 this week before retreating below 1100. Just who is buying the dollar options is immaterial, but it is most likely financed by the FED. Here are some numbers and I got them from the graph. The volume of UUP this last week was about 30 Million (Davis reports that millions of shares had to be authorized) and the striking price is 23. If I read this right, each share represents a bundle of dollars for a price of $23. Thus, a speculator (or a government shill in a bank) can buy a contract on a bundle of dollar bills for a price indicated on the graph. This manuver would act to stabilize the value of the dollar. If foreign banks fall for the trick, they will stop selling their dollars, thinking that the drop in the dollar has stopped. This solution is temporary. The contracts expire in November and December and the shills will have to buy new ones. The cost? For thirty million shares of UUP at the price indicated on the graph, it would be 690 million dollars. Considering how much currency this regime has printed, it is chicken feed.

Will this scam work? Hard to tell now. In the long run, NO! In the short run, it might. The Obama regime got a pale of cold water in its face with the double digit unemployement figures. With the threat of inflation AND UNEMPLOYEMENT rising, 2010 will be a tough year on Democrats come election time in 2010. With the threat of Cap and Tax loomimg and the socialized health care, we might even have a Revolution.

Major Nidal Malik Hasan

The News Media is spinning events that the Major had Post Traumatic Stress Syndrome - hence the shooting spree. The Media lies. This man had not been deployed to any combat operation.

Major Nidal is a jihadist. He expressed admiration for suicide bombers and other terrorists before he decided to become one himself. On the day of his terror act, he gave away his Quran (more than one copy in fact), gave away money and even his frozen food and on base he shouted "Allah Akhbar" and started shooting. His terrorist act was obviously motivated by his understanding of Islam - no one else shouts Allah Akhbar, but a Muslim. As the evidence shows, this was premeditated.

Not all Muslims are terrorists. But they all bear watching, as does everyone else. Major Nidal was investigated and his views were known, yet he was allowed to continue in the Army. The handling of his case was a delerition of duty and the usual shortsighted stupidity. But, the news media that tries to suppress the facts is guilty of treason.

Gold on third bump.

Gold has moved to new highs while the dollar has ended its rally and began to sink again. This graph of gold prices shows a number of important features. First, gold went to 1,000 by March of this year - this coincided with the chaotic situation in the Stock Market. Then from March to September, gold was doing a wedge of lower highs and higher lows. The Gold Market gave a buy signal in March, as the 50 DMA moved decisively above the 300 DMA. Gold broke out decisively from its trading range in Sptember. Since then we see a pattern of two weeks rising prices and two weeks correcting. The slope of the new trading range is orderly so far with gold prices rising about 80 dollars/up phase and dropping about 30 dollars in the correcting phase. We will soon see if this pattern will continue. If it does, gold will top out at 1120 in this bump.

The driving force for the current rally is the drop in the dollar. The premium for gold miners has dropped and their correction was steeper, so even though gold is hitting new highs, gold mining stocks are not.

The oversold/undersold graph at the top shows that gold goes to over bough conditions during the up hase and returns to neutral during the correction. This, together with the positive MACD tells us that the rally has legs.

Now look at the US Dollar. Up till March, cash was scarce, so the dollar increased in value. This was entirely due to the defletion induced by the FED in Sep 2008. The Stock Market began to rally as the dollar began to drop and continues till this day. Taking down the value of the USD is deliberate, slow and orderly. This picture remain untill the FED tightens interest rates. At that point, the rally in stocks will come to an end and we will head for a crash.

Lessons from NY.

The 'drive-by media' is spinning NY 23 as follows: the results expose a fault in the GOP that shows that the Party is in grave disarray because it tries to purge "moderates."

The facts: NY Republicans botched this election along with the RNC. First, Scozzafava (the most left-leaning member of NY's available candidates for the 23) was nominated by four votes out of a Committee of 11. Mr Hoffman entered the race on the Conservative ticket as an almost unknown. The RNC spent 900K to run TV ads against him. Hoffman went from 20% in the polls to over 45% in a month. Scozzafava (the RINO) withdrew so as not to split the Liberal vote and endorsed the Pelosi Democrat. A loss for the GOP? Not really. Scozzafave would have voted as a 90% Pelosi Dem so the difference is minimal. The biggest loser is Newt Gingrich. After cozying up to Pelosi and Hillary, now this. Newt is done.

The MESSEGE

To Obama: NO YOU CAN'T!

To the Blue Dogs: DON'T YOU DARE!

Media spin: Vote for Rep governors is not a rejection of Obama.
Har, har. Imagine what the spin would be if Democrats won in VA and NJ! The fact is that Obama campaigned heavily in NJ and his henchmen tried to steal the election and it did not work. Yes, a lot of voters still approve of him in NJ, but give them time. It is his policies that voters rejected, not him personally.

At this point, the outcome in NY 23 is still in question. Hoffman is closing the early gap. Will he win? Too early to tell.

Cheating in New Jersey

Dems are cheating in NJ to preserve Corzine. An unholy trinity of criminals (SEIU, ACORN and a new communist front "WF" or "Working Families") is collecting fraudulent absentee votes and pressuring susceptible residents of nursing homes to vote for Corzine. More absentee ballots have been filled out than was cast in the Presidential election. The possibility of cheating exists in every State where elections depemd on ruling by a Democrat Attorney General and obviously New Jersey is one such place. We should see tonight if the cheats have enough ballot stuffing to erase a narrow lead by Christy.

Scozzafava proves it: RINO = Democrat

The sudden withdrawal of Ms Scozzafava from the Congressional race in the New York 23 race and her immediate endorsement of the Pelosi-Democrat in fact proves Candidate Hoffman's charges that Scozzafava was a Republican in Name Only ( a RINO). Liberals like to influence the GOP to put up Democrats as candidates, so even if the Democrats lose elections, their destructive policies remain in place.

This does not mean that we should encourage third party candidates. The dividing line between Democrats and Republicans should be clear: Dems are for government intervention wherever possible and Reps are for as small a government as we can mange to do. We still believe in majority rule though and the majority's opinion and votes should carry the day. The trick is to make sure that elections do not produce irreversible changes. Clearly, irreversible changes are what the Dems want and those are contrary to the interests of a democratic republic. Scozzafava was a sham as a Republican and a threat to the democratic form of government. Whether Mr Hoffman wins (as I hope he does) or loses, he has already served the people of his State by giving them a choice and not an echo.

The stars will fall and the light will fail.

It’s record cold over in Germany and Denver is covered with snow,
It won’t be terribly long now when temps hit below zero.
It’s getting colder fast everywhere, not just the USA
The cleansing breath of the colder climes having a bigger sway.

Yet teachers still tell our little ones that Socialism’s a must
To curb the melting of glaciers or our planet goes bust,
That polar bears are still drowning for lack of enough polar ice,
And the number of polar bears increasing comes as a big surprise.

But our planet does splendidly, it’s hearty and it’s hail,
Waiting for the scam artist Algore to go to jail.
The end will come when the Lord decides to put an end to it all,
And the heavens open and stones will rain down on a world in thrall.

The stars will fall and the light will fail and the pompous false Messiah
Will be exposed for all to see, the name of Barack u Bawmaw.

©Geezer Bela in Exile.
A Freedon Fighter Poet.
Oct 22, 2009.

A rough sketch of econ changes to come.

Do you wonder sometimes how I can say the things I do? Well, I read about what analysts write, consult graphs and use my own methods of sifting evidence. So, here is some analysis of developing trends.

1. Inflation. The #1 factor of importance.

The money supply (M1, currency held by the public and private accounts) took off and grew by 18.4%% in the year that ended in this last June. This rate of growth is unprecedented. Even during the Carter inflation of the 1970s, M1 only grew by less than 10%/year. There is another measure of inflationary predictor: the tipping point that causes hyperinflation. That tipping point is a 40% deficit in the budget. And that is where we are this year.

2. The price of gold. This is factor #2 in importance.

The price of gold is rising in dollars, because the value of the US dollar is falling. The cost of producing gold has not changed. As of now, gold is rising slowly and according to the inverted head and shoulders is expected to rise to 1,300/oz. I expected gold to correct back to 1040 and it corrected to 1028. It is now back above 1040 and I expect it to rise next week. In 2 weeks time, I expect gold prices to hit above 1100.

3. Economic indicators. This is factor #3 in importance.

The economic recovery is hampered by increased government spending, which is largely unproductive. The 3.5% change in GDP reported for Q3 is a fantasy. The real change is about 1.7%. Since, we need 2% growth to break even, the economy is still weakening. Cash for clunkers and other government spending has inflated GDP figures, but the continued flat performance of the transportation factor show that the recession is not really over.

Timing is everything - almost.

The monetarists figured out the effects of flooding the market with currency to stimulate the economy. The first effects are on stocks and bonds, usually within 6 months. The next to follow is economic recovery within 18-30 months. Prices will respond with an inflationary change in 30-48 months. What makes the prices go up? The inflationary psychology is described in the Casey Report:

"Dropping large chunks of newly created money into the economy leads to price inflation, because the recipients are likely to find themselves over provisioned with cash. As they try to unload the excess, they bid up the prices of the things they buy, whether it be stocks, shoes, gasoline, silver coins, or granola. The sellers of those things then find themselves cash rich and start doing some buying of their own, and so the wave of excess money and the bidding it inspires propagate through the economy.The process isn't instantaneous. It takes time. Just as each player in the economy has a sense of how much of his wealth he wants to hold in the form of money, everyone will move at his own speed to make adjustments when his actual cash holdings seem to be off target."

The monetarist timetable for these events would be to place economic recovery to the middle of 2010-2011 and price inflation to the middle of 2011-2012. The way the Democrats run the economic scam of theirs is to saddle an incoming Republican Administration with the task of raising interest rates and lose the next election.

This timetable would presume a slowdown in the printing of money and a rise in interest rates. We know that Bernanke is reluctant to raise interest rates, so we will tip into inflation much quicker than the Casey report expects.

In my opinion, the dollar will resume falling next week which will push up stocks and gold.

Stupid power pays deadly dividends.

It was September 3 when I posted "Smart Power" - comments on Hillary's campaign theme and what it morphed into - STUPID POWER. As was evident then, the show of indecisiveness by Democrats had foreshadowed the renewed efforts by the Jihadists to wrest control of Afghanistan, Pakistan and even Iraq.

Obama's pontification that he did not envision a military victory in Afghanistan and Hillary's reference to finding "moderate elements" in the Taliban, with whom we can negotiate, is having the predictable effect of energizing the Jihadists. They can smell victory in the face of STUPID POWER. They do not even have to win in Afghanistan, the acts of a few suicide bombers can be shown by the Liberal Media as Taliban successes.

Obama's campaign labeled Afghanistan and Pakistan as the central front in the war on extremist elements of Islam. Once he was elected, he promised to prosecute that war to the fullest. He sent his hand-picked Commander, Gen McCrystal to Afghanistan and the General made his recommendation for a "surge" led by forty thousand troops. Obama dithers till this day. This is a deliberate dereliction of duty on Obama's part.

Members of the captive Press (the Government Media) are now trying to hype the comments of the stupid person who resigned his position in Afghanistan. According to this idiot, he does not know why we are fighting in Afghanistan. Others are saying (as wielders of STUPID POWER always do) that the Taliban mean us no harm.

HUH? And double HUH? We aren't fighting them because they want to keep women in shapeless sacks and object to girls going to school. We fight them, because they sponsored Al Qaeda's attacks on New York City and Washington, DC and promise more. And because they are training Muslims from the West to carry out attacks in Europe and America. That's what the Country gets to put Dems in charge of defense: STUPID POWER.

Democrats like poor economy.

The Democrats like a poor economy. It got them into a supermajority in Congress and elected the ventriloquist's dummy as President. In addition, they hope to scare the populace into accepting socialized medicine:

http://www.nytimes.com/2009/10/25/us/politics/25assess.html?_r=1

The continued application and use of the 'mark to market' rule is being used to continue deflation to keep prices in check, to devalue the dollar and to take over industry after industry. The only fly in the ointment is the next two elections, but the Dems hope to survive those with the help of the Media. Once the main features of Socialism are in place, it is time to defang the GOP by stacking the party with 'moderates,' who will ratify Socialism. That's the plan anyway.

Gold corrects as anticipated.

The Geezer predicted that gold would correct back to 1040 an ounce. It did. Will it drop back to 1000? I do not know, but I do not think so. I believe that gold will hover around the 1040 number, then take off next week till it reaches 1120 in two weeks time.

The question of the dollar.

Whether people like to acknowledge or not, the question of the dollar IS a political one when all is said and done. By now we understand the variables that govern the economy. And we know the outcome from experience. In the Depression of 1920, the economy was restored by cutting government spending and cutting taxes. The resultant prosperity that followed was named the Roaring Twenties. It was ended by a Stock Market bubble, fueled by low margin requirements and excessive speculation. An economic correction (exacerbated by protectionist tariffs and the raising of taxes), followed by a Stock Market crash, ushered in Roosevelt and Munchausen by proxy economics. The adoption of graduated income tax took the money from the hands of the entrepreneurs (who were best at producing income) and let it be spent on government handouts and make work that was low in efficiency. Roosevelt never got the US out of economic Depression, just made it possible for people to endure it. The Depression ended when WWII forced the govt to end 'mark to market' so the war could be won. Jimmy Carter tried to relive the Rooseveltian years and produced stagflation. Bill Clinton knew better.
The Obama regime is embarked on restoring the Rooseveltian economics and finish the job of destroying capitalism. Their tool is once again 'mark to market' to produce enough deflation to mask the effects of devaluing the dollar. And the dollar is being devalued to obtain control over industries and alleviate the suffering that Obamanomics brings about. The Chinese and Indians are no fools and they do not like the idea that the Obama regime is planning to destroy the value of their dollar reserves. And that is what is at the bottom of Asian nations scrambling for a new reserve currency.

The GOP better listen to the base.

There is an astonishing poll by the Rasmussen people:

http://www.rasmussenreports.com/public_content/politics/general_politics/october_
2009/73_of_gop_voters_say_congressional_republicans_have_lost_touch_with_their_base

Roughly 73% of Republicans responded that they believe that the Congressional GOP has lost touch with its base, that they do not listen to the people who elected them. Only 15% of the respondents believe that the GOP had done a good job listening to Republicans.

During the last two years of the Bush administration, Republicans in Congress fed at the public trough as repulsively as the Democrats. Where did this get them? Into the good graces of the Media, Hollywood or the Academe? Uh-uh. They lost their majority in Congress to the tune that Democrats routinely lock them out of Committee hearings. So, you would think that they would try to listen to their base and return to their ideas of the Reagan years that led to their Congressional majority? If you thought that, YOU RERE WRONG.

They nominated a Left-wing Liberal on the Republican ticket in New York's 23 Congressional district. I am not going to repeat the Liberal Scozzafava's positions, but she is undisguishable from a Pelosi Democrat. The justification for stupidity on the part of the GOP in NY is that a) they need someone like a Democrat to win and b) it is preferable to have a Liberal Republican as compared to a Liberal Democrat.

This argument is absurd. If the GOP does not have a difference with the Democrats, why bother to oppose them? In fact, the reason why we want Conservatives to win via the GOP is because Conservative ideas work and Liberal ideas do not. It is equally fallacious to say that a Liberal Republican is preferable to a Liberal Democrat. In fact, when a Liberal Republican wins it does far greater damage to the GOP than a Democrat. An enemy in your camp is far more dangerous than an enemy without. Lastly, if a Liberal Democrat wins, the GOP can hope for a change of mind in the electorate, but with a Liberal Republican, Liberal failures get cemented in, because the GOP establishment will not support a primary opposition to the RINO. In addition RINOs (Republicans in name only) spend their biggest effort on fighting real Republicans.

Here is a Hoffman commercial. Send him money:

http://flapsblog.com/2009/10/22/sarah-palin-endorses-conservative-doug-hoffman-in-new-york-23-congressional-race/

and the Post tries to spin it.

It is as familiar by now as the ballet of the Sugar Plum Fairies in Nutcracker: the Washington Post helps to elect or nominate a Liberal and when the Liberal turns out to be a failure, the Post attacks him. Such is the background of the gubernatorial election in Virginia. The Post endorsed Deeds and attacked McDonnell, the Republican. Now, the Post faults Deeds for attacking McDonnell. What gives?

What happened is that McDonnell had made the policies of Obama the issue in the election and has moved into double digit leads. A loss in Virginia will be a rebuke to the Obama regime in a State that Obama carried. The Post wants to spin the coming Democrat loss so it does not appear what it is (the rejection of Obama's Socialist agenda), but blame it on incompetence by Deeds.

The Post is also spinning this in an effort to hoodwink Southern Democrats. The Post charges that Deeds is trailing, because he refused to strongly endorse the Obama agenda. This is propaganda aimed at the "blue dog Democrats" to vote for Obama's socialized medicine plan. In fact, Deeds would have been happy to have Obama campaign for him, but Democrats in Virginia did not believe that an appearance by Obama would help and it might hurt. If Deeds looses, it will be because of the Obama agenda is not popular in Virginia.