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.
Saturday, October 31, 2009
Friday, October 30, 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.
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.
Thursday, October 29, 2009
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.
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.
Wednesday, October 28, 2009
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.
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.
Tuesday, October 27, 2009
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 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.
Friday, October 23, 2009
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/
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.
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.
Obama flounders.
Peggy Noonan's editorial in the Wall Street Journal puts it this way: "it's his rubble now." The metaphor comes from the moment George Bush stood on the rubble of the World Trade Center in NYC and lifted his bullhorn. From there on it was his responsibility, his rubble.
The Obama regime tries to hide behind the smoke, claiming that he has to "mop up" the mess left by others. But, it is his rubble now. People expect him to fix it and so far he has been been unable to do it. The economy sputters, joblessness increases, the stimulus plan was a shambles and Dems want another one, deficit is soaring and the dollar is sinking. Democrats blame Drudge for talking about the demise of the dollar, or attack Rush, the Chamber of Commerce, FOX news, the insurance industry, the banks or a whole lot of us. They claim that Obama is not tough enough on us. But you know what? IT'S HIS RUBBLE NOW! So, fix it or step aside - as Ronald Reagan said to Jimmy Carter.
Noonan's article ends this way:
"The problem isn't his personality, it's his policies. His problem isn't what George W. Bush left but what he himself has done. It is a problem of political judgment, of putting forward bills that were deeply flawed or off-point. Bailouts, the stimulus package, cap-and-trade; turning to health care at the exact moment in history when his countrymen were turning their concerns to the economy, joblessness, debt and deficits—all of these reflect a misreading of the political terrain. They are matters of political judgment, not personality. (Republicans would best heed this as they gear up for 2010: Don't hit him, hit his policies. That's where the break with the people is occurring.)"
"The result of all this is flagging public support, a drop in the polls, and independents peeling off.
In this atmosphere, with these dynamics, Mr. Obama's excuse-begging and defensiveness won't work."
"Everyone knows he was handed horror. They want him to fix it.
At some point, you own your presidency. At some point it's your rubble. At some point the American people tell you it's yours. The polls now, with the presidential approval numbers going down and the disapproval numbers going up: That's the American people telling him."
The Obama regime tries to hide behind the smoke, claiming that he has to "mop up" the mess left by others. But, it is his rubble now. People expect him to fix it and so far he has been been unable to do it. The economy sputters, joblessness increases, the stimulus plan was a shambles and Dems want another one, deficit is soaring and the dollar is sinking. Democrats blame Drudge for talking about the demise of the dollar, or attack Rush, the Chamber of Commerce, FOX news, the insurance industry, the banks or a whole lot of us. They claim that Obama is not tough enough on us. But you know what? IT'S HIS RUBBLE NOW! So, fix it or step aside - as Ronald Reagan said to Jimmy Carter.
Noonan's article ends this way:
"The problem isn't his personality, it's his policies. His problem isn't what George W. Bush left but what he himself has done. It is a problem of political judgment, of putting forward bills that were deeply flawed or off-point. Bailouts, the stimulus package, cap-and-trade; turning to health care at the exact moment in history when his countrymen were turning their concerns to the economy, joblessness, debt and deficits—all of these reflect a misreading of the political terrain. They are matters of political judgment, not personality. (Republicans would best heed this as they gear up for 2010: Don't hit him, hit his policies. That's where the break with the people is occurring.)"
"The result of all this is flagging public support, a drop in the polls, and independents peeling off.
In this atmosphere, with these dynamics, Mr. Obama's excuse-begging and defensiveness won't work."
"Everyone knows he was handed horror. They want him to fix it.
At some point, you own your presidency. At some point it's your rubble. At some point the American people tell you it's yours. The polls now, with the presidential approval numbers going down and the disapproval numbers going up: That's the American people telling him."
Wednesday, October 21, 2009
So, how is the gold price progressing?
Stocks and commodities seldom move up and down in a straight line. If you had read graphs for most of your professional life (I did as a scientist for over 25 years), you can just look at a graph and certain things jump out at you. In other words, you are used to capture the essential message of a graph almost instantly. So, let's look at these two graphs for what they tell us.
The top graph compares the changes of gold price in three currencies: US dollars, Euros and the Japanese Yen. From 2007 onwards, the dollar is the weakest of the three currencies (it goes up quickest). Up to the end of the summer of 2008, the Euro is the most stable, but in 2009, the Yen and Euro change place, so that now gold increases more in Euros than in Yen. We note that in about March of this year (when the Obama regime began to print dollars in earnest), the price of gold in dollars begins to rise steeply and the curve accelerates toward the end of the year, which is now.So, the value of the dollar is falling faster than the value of either the Yen or the Euro and that is why it takes more and more dollars to buy an ounce of gold.
We can now examine the second graph for some clues re timing of the changes in gold prices. We see that the majority of the changes take place in two week intervals. The July up leg takes about two weeks, followed by a short down leg. Then there is a very short down spike in July, followed by a very short up spike in August and a one month trough that has two two week segments. Then gold breaks out of its trading pattern in September and rises for about two weeks and corrects for about two weeks. The current upleg began at the first days of October and took about two weeks to reach top. We are now in the down phase that might last till the first of November. Then a new upleg should start that might take gold up to about 1120USD/oz.
As you see, the length of the moves is not exact at this level, but if you smooth the averages, you get what looks like a sine wave. The sign wave turned upward in September - that is, the center line that can be drawn through the sine wave has now a positive slope. Which means higher prices up ahead.
At this point, the rise in gold prices reflect central banks and large entities hedging themselves against inflation(i.e. a loss in the value of the dollar). Gold prices will be rising relatively slowly with intervals of drops in prices. When small investors and the public discovers the scam the Obama regime is running, the rise in gold prices will quicken. God willing, I will be here to show you the graphs.
Monday, October 19, 2009
Communist takeover in progress.
The Communists of Eastern Europe (and the United States) did not cease to exist, but became part of the environmentalist movement. Organizations like Green Peace had been taken over by Communists. Obama's "tzars" (the correct term for them is Commissars") are either Communists or radicals that are communists without actually being in the Party.
So, how will the Communists try to establish a Commie world government? The mechanism is a treaty that Obama is expected to sign. Let Lord Monckton explain the aims of this treaty:
http://www.youtube.com/watch?v=PMe5dOgbu40
Opposed to the Communization is the Oath Keepers: former and current police officers and military personnel. They are asked to lay down their arms if they are ordered to enforce the will of the Obamabots to establish a communist state:
http://www.lvrj.com/news/oath-keepers-pledges-to-prevent-dictatorship-in-united-states-64690232.html
I say that is not enough. Our police and military will need to join the tea party crowd and prevent the overthrow of our Constitution.
So, how will the Communists try to establish a Commie world government? The mechanism is a treaty that Obama is expected to sign. Let Lord Monckton explain the aims of this treaty:
http://www.youtube.com/watch?v=PMe5dOgbu40
Opposed to the Communization is the Oath Keepers: former and current police officers and military personnel. They are asked to lay down their arms if they are ordered to enforce the will of the Obamabots to establish a communist state:
http://www.lvrj.com/news/oath-keepers-pledges-to-prevent-dictatorship-in-united-states-64690232.html
I say that is not enough. Our police and military will need to join the tea party crowd and prevent the overthrow of our Constitution.
Friday, October 16, 2009
The gold rally begins in earnest.
I have been relaying to you the forecasts I read and my own on the expected rise in gold prices. Let me summarize. Many people believe that gold will go much higher. The disagreement is how high and how fast. 
The first graph shows the value of GLD, an exchange-traded fund that tracks gold exactly. Note that gold rallied strogly during the end of 2008 and into 2009, then began to trade sideways in March 2009 (when the Stock Market began to rally). Between March and the end of September, gold price described a narrowing wedge (lower highs and higher lows) - a pattern that suggests a significant coming change in the valuation of the security. A breakout from such a pattern can occur either on the upside or the downside.
Gold broke out of this narrow range just at the beginning of September. The previous high of 1037 was broken and new highs were established. A new pattern was established.
For now, gold seems to advance 80 dollars an ounce and decline 30. So the next leg should take gold prices to 1120. This is approximate. The reverse head and shoulder predicts gold price to go up to 1,300 in the interim with higher prices to come later. How high? 1,500 then maybe $2000. How fast? That's the question that we do not know.
Now to the fundamentals. The driving force for the increase in gold price is the loss of value in the dollar. The slow devaluation of the dollar is deliberate, carried on by the Obama regime. Lowering the value of the dollar achieves the following: 1. it transfers ownership of some of American assets to other countries and 2. it makes it possible for the Obama regime to keep up the pretence that America's debts will be paid. The enormous debts being piled up by the regime will be easier to pay if the the debt is paid by cheaper dollars. Why keep increasing the National debt? Because it can be used to grab control of industry after industry. The regime now controls nearly 3/4 of the banks, roughly the same amount of America's automobile industry, 80% of the mortgages, 100% of student loans and it is aming to bankrupt private health insurance. Commercial real estatate is next. All these industries are artificially bankrupted then "rescued" by monopoly money that the FED prints or borrows. Prices are kept in check by the continuing deflation caused by bankruptcy of industry after industry and the increase in unemployment this causes.
A time will come when prices can no longer be kept constant. At that point, price controls will be instituted, which will lead to shortages. This always happens when the Communists take over a country and country has been taken over by a bunch of radical communards.
So, gold rises, because the dollar fades. Owning gold simply preserves your capital, though the apparent gains will be taxed away. Gold mining stocks, however, will rise faster than gold prices.
The Stock Market will continue rallying. But, at some point the regime and its friends at the FED will have to raise interest rates to steady the dollar. That will wreck the Stock Market and even gold mining stocks will tumble. The alternative is to go into hyperinflation and destroy the dollar for sure.
Thursday, October 15, 2009
The Law of the Suspect.
The radicals of the French Revolution had a law that it was illegal to be a suspect. You did not have to become a person who had committed a crime - all the police had to do is name you as a suspect. That was enough. In fact, under French law, it falls on a person charged with a crime to show that he is innocent.
Today's radicals in the Mainstream news Media apply this French law to Conservatives. Remember Dan Rather accusing Bush that he went AWOL from the Texas Air Guard? When the letter "proving" Rather's charge was proven to be fraudulent, Rather insisted that the story was true, even though the documentation was a fraud.
The latest case of using the Law of the Suspect is the treatment of Rush Limbaugh by CNN and MSNBC. The two Liberal Networks repeat the charge that Limbaugh commented favorably on slavery. The trouble is that the quote attributed to Limbaugh is fraudulent, just as the "proof" of Dan Rather was a fraud. But, for Liberals, it is enough to be a "suspect" to convict someone and proof is not needed. In fact, one of the MSNBC commentators said that even if Limbaugh did not say it, he thought it.
Such people as the leaders and propagandists of CNN and MSNBC should not be allowed to be journalists.
Today's radicals in the Mainstream news Media apply this French law to Conservatives. Remember Dan Rather accusing Bush that he went AWOL from the Texas Air Guard? When the letter "proving" Rather's charge was proven to be fraudulent, Rather insisted that the story was true, even though the documentation was a fraud.
The latest case of using the Law of the Suspect is the treatment of Rush Limbaugh by CNN and MSNBC. The two Liberal Networks repeat the charge that Limbaugh commented favorably on slavery. The trouble is that the quote attributed to Limbaugh is fraudulent, just as the "proof" of Dan Rather was a fraud. But, for Liberals, it is enough to be a "suspect" to convict someone and proof is not needed. In fact, one of the MSNBC commentators said that even if Limbaugh did not say it, he thought it.
Such people as the leaders and propagandists of CNN and MSNBC should not be allowed to be journalists.
Tuesday, October 13, 2009
Inflation has begun.
While, some people are still arguing about the dollar, inflation is already under way. Let's look at gold prices first. Gold broke out of its trading range during August and increased in price from 940 to 1020 (80 dollars) before it corrected. The current upleg might take it from 980 to 1070 if the rate of change in gold prices continues. This morning gold briefly hit 1066 before pulling back.
Look at gold mining stocks now. You see that gold mining stocks are rising faster than the gold price, because of leverage.
You see the same type of leverage for steel, oil and copper as well. So the movement in prices is not due to fear so much as to a recognition of the inflation already under way.
The Obama-Bernanke regime is caught in its own trap: if they keep interest rates low and continue to print money, inflation will devour the dollar. If they increase interest rates, the Stock Market and the economy will crash and we will have a double dip recession. If interest rates are raised modestly then we will have inflation and a stagnant economy, recapitulating Jimmy Carter - another Nobel Piss Prize winner and failure.
Ronald Reagan showed us how to get out of a stagflation: reduce taxes and costly regs and if possible, cut spending. Unfortunately, the Obama regime is doing just the opposite.
Why is California such a mess?
I remember when Ronald Reagan ran for Governor of California. On his platform was the item of reducing costly and unproductive regulations that hampered business in California. It has been a long time since Reagan was California Governor. Since then, there have been Democrats and "moderate" republicans who run the State. Costly and stupid regulations, fees and taxes have grown like noxious weeds to choke out California's ability to do business.
Here is an example in the Modesto Bee:
http://www.modbee.com/local/story/890369.html
A local embroidery shop was forced to close for two months while a State office was forcing the business to get a certificate (cost $2,500 plus a $500 fine). Cost to the business: $36,000 in loss of revenue and laying off two employees.
The University of California is run by Marxists who turn students against business. I say this to the students: when you think of business, think of jobs, work, taxable profits that pays for State and local services. One business may be small potatoes, but you know that there are thousands of businesses, thousands of jobs that can be obliterated by costly regulations. Think about it. The job that will be lost might be one that you might fill as a part-time student employee or a full-time worker. The profit that is lost could have paid for lower tuition, better roads, etc.
Here is an example in the Modesto Bee:
http://www.modbee.com/local/story/890369.html
A local embroidery shop was forced to close for two months while a State office was forcing the business to get a certificate (cost $2,500 plus a $500 fine). Cost to the business: $36,000 in loss of revenue and laying off two employees.
The University of California is run by Marxists who turn students against business. I say this to the students: when you think of business, think of jobs, work, taxable profits that pays for State and local services. One business may be small potatoes, but you know that there are thousands of businesses, thousands of jobs that can be obliterated by costly regulations. Think about it. The job that will be lost might be one that you might fill as a part-time student employee or a full-time worker. The profit that is lost could have paid for lower tuition, better roads, etc.
Dollar hits 1066/oz!!
It is true that sometimes the right hand does not know what the left hand is doing. Today's Daily Wealth brings a notice from Tom Dyson, advocating of buying into the dollar ETF. Mr Dyson reasons in a Contrarien view as this: the dollar is losing value, because our interest rates are too low. So, other currencies appreciate and gold soars. He predicts that the FED will raise interest rates at some point and then the dollar will rally ten percent and gold will retreat. In fact, Australia has raised interest rates and Canada, New Zealand, S Korea and Norway are contemplating the same.
Others, myself included, disagree. There are ample reasons from Bernanke's point of view to keep interest rates very low. First, there are technical reasons. Letting the banks borrow at a 0.5% rate and then they charge 4.5 -6.5 percent, in fact recapitalizes the banks and rewards Buffet (an Obama supporter with lots of shares into banks especially Wells Fargo). Second, Bernanke believes that the Depression continued because the FED raised interest rates too soon. The third technical reason is that unemployment is still rising and the coming defaults in commercial real estate will continue to deflate the economy.
Then there are political reasons. The radicals in charge of our country want to downsize our economy, and in their view, return the money to its rightful owners. The Sep 15 change in accounting system (move to mark to market) destroyed a very sizable share of America's wealth. It downsized America. The Left in Congress will argue that we can no longer afford to continue the war against terrorism or even maintain a superior fighting force. A reduction in the value of the dollar will allow people from other countries to acquire our assets cheaply. This is stillw ithin the desirable changes the Obamabots seek. Finally, low interest rates help to reduce the deficits temporarily, so the Obamabots can continue to "help" the people they make jobless and miserable. This regime is tied to the Munchausen by proxy form of mental illness.
Others, myself included, disagree. There are ample reasons from Bernanke's point of view to keep interest rates very low. First, there are technical reasons. Letting the banks borrow at a 0.5% rate and then they charge 4.5 -6.5 percent, in fact recapitalizes the banks and rewards Buffet (an Obama supporter with lots of shares into banks especially Wells Fargo). Second, Bernanke believes that the Depression continued because the FED raised interest rates too soon. The third technical reason is that unemployment is still rising and the coming defaults in commercial real estate will continue to deflate the economy.
Then there are political reasons. The radicals in charge of our country want to downsize our economy, and in their view, return the money to its rightful owners. The Sep 15 change in accounting system (move to mark to market) destroyed a very sizable share of America's wealth. It downsized America. The Left in Congress will argue that we can no longer afford to continue the war against terrorism or even maintain a superior fighting force. A reduction in the value of the dollar will allow people from other countries to acquire our assets cheaply. This is stillw ithin the desirable changes the Obamabots seek. Finally, low interest rates help to reduce the deficits temporarily, so the Obamabots can continue to "help" the people they make jobless and miserable. This regime is tied to the Munchausen by proxy form of mental illness.
Sunday, October 11, 2009
Obama's Nobel award: given to the wrong man.
The condescension in awarding Obama the Nobel is clearly an issue, because when the nomination was made, he was barely in office. Actually, Obama's foreign policy is a guarantee of an atomic war in the Middle East.
Consider his foreign policy. He began by the disgraceful capitulation in Cairo, where he spoke as if he were a Muslim or at least a Muslim sympathizer. It went from there to his statement that he does not see a military victory in Afghanistan as the goal of his policies. Do you recall his campaign speeches that the war in Afghanistan was THE important war rather than the one in Iraq? And he is now prepared to lose that war, because you either win that war or lose it. In fact, Obama's declaration has emboldened the Taliban and other extreme Muslim forces, so that not only are they increasing fighting in Afghanistan, but also in Pakistan. Should Pakistan fall into Taliban hands, they will continue the Jihad and use Pakistan's atomics. Just in case the Afghan/Pakistani mess does NOT develop into an atomic conflict, Iran's nukes will. Iran made it clear that their goal is to obliterate Israel. Nor will the Israelis just sit by and wait for Iran to start lobbing nukes into Haifa and Tel Aviv.
So, if Obama continues with his policy, it will mean a certain atomic war in the Middle East. Nice going Norway. For this the Nobal Peace Prize Selection Committee is awarded time in the Laughing Stock with four Dunce Caps.
Consider his foreign policy. He began by the disgraceful capitulation in Cairo, where he spoke as if he were a Muslim or at least a Muslim sympathizer. It went from there to his statement that he does not see a military victory in Afghanistan as the goal of his policies. Do you recall his campaign speeches that the war in Afghanistan was THE important war rather than the one in Iraq? And he is now prepared to lose that war, because you either win that war or lose it. In fact, Obama's declaration has emboldened the Taliban and other extreme Muslim forces, so that not only are they increasing fighting in Afghanistan, but also in Pakistan. Should Pakistan fall into Taliban hands, they will continue the Jihad and use Pakistan's atomics. Just in case the Afghan/Pakistani mess does NOT develop into an atomic conflict, Iran's nukes will. Iran made it clear that their goal is to obliterate Israel. Nor will the Israelis just sit by and wait for Iran to start lobbing nukes into Haifa and Tel Aviv.
So, if Obama continues with his policy, it will mean a certain atomic war in the Middle East. Nice going Norway. For this the Nobal Peace Prize Selection Committee is awarded time in the Laughing Stock with four Dunce Caps.
Parsing economic numbers.
All those Liberals, who are eager to talk to death any good news about the economy, at first pointed to the "green shoots" and now point to improved earnings by some companies. Their latest talking point is Yum Brands. It reported a Q3 profit of 69 cents. Wall Street loved it and the Obamabots loved it and we would love it if this number was real. So, what happens when we parse the number?
Does this number reflect an improving economy, since Yum Brands reflects the discretionary income of ordinary Americans (Yum Brands include KFC, Taco Bell, Pizza Hut and Long John Silver)? No! There were two components factored into the improved profits at Yum Brands: 1. the 5.8% drop in the cost of materials due to deflation and 2. the gain in money when earnings in foreign countries is translated into dollars, due to the slide in the value of the dollar. In fact, sales in the US have gone down about 6% on the average, with Pizza Hut leading the charge by a 13% drop in US sales. Americans have opted for the cheaper brand of DiGiorno, which increased its sales 20%.
Not that Yum brands is doing badly. No! It has opened 80 stores in China and plans to open 2000 more in the coming years. The economic conditions created by real Communists are in fact better for business than the conditions created by the Obamabots. Something to ponder. Obama's Nobel Peace Prize was given because he is bad for our country.
Does this number reflect an improving economy, since Yum Brands reflects the discretionary income of ordinary Americans (Yum Brands include KFC, Taco Bell, Pizza Hut and Long John Silver)? No! There were two components factored into the improved profits at Yum Brands: 1. the 5.8% drop in the cost of materials due to deflation and 2. the gain in money when earnings in foreign countries is translated into dollars, due to the slide in the value of the dollar. In fact, sales in the US have gone down about 6% on the average, with Pizza Hut leading the charge by a 13% drop in US sales. Americans have opted for the cheaper brand of DiGiorno, which increased its sales 20%.
Not that Yum brands is doing badly. No! It has opened 80 stores in China and plans to open 2000 more in the coming years. The economic conditions created by real Communists are in fact better for business than the conditions created by the Obamabots. Something to ponder. Obama's Nobel Peace Prize was given because he is bad for our country.
Friday, October 9, 2009
Barak's prize: ridiculous.
We have come to expect that the Norwegians award the prize to someone from the Left, preferably someone who has hurt America. And, oh yes, someone who is a certified failure at politics such as Jimmy Carter or Algore.
Obama has no accomplishments yet, just as he was unqualified for the Presidency. His selection is rather condescending:
http://www.timesonline.co.uk/tol/news/world/us_and_americas/article6868905.ece
Obama has no accomplishments yet, just as he was unqualified for the Presidency. His selection is rather condescending:
http://www.timesonline.co.uk/tol/news/world/us_and_americas/article6868905.ece
Beware of anti-gold nonsense.
Beware of the Media campaign to rescue the Obama regime. The drumbeat is now that gold is a bad investment. Even the Wall Street Journal had an article, calling an invetsment in gold "lousy." Such a stupid statement needs no link, so none is provided. But consider, if you were in stocks in 2005 to 2009, you lost 40%. If you were in gold, you had a 100% gain.
The Obama regime and its enablers in the FED are behind the #8 ball. To continue their policy of controlled deflation of the economy and American assets, they need to keep interest rates low. That reduces the value of the dollar. If they raise interest rates, the Stock Market will tank as well. The obvious way to stimulate the economy (reducing the taxes on business), is against the belief of the regime. So, all the Left (including the Norwegian Nobel Peace Prize Committee) is closing ranks to prop up Obama.
The Obama regime and its enablers in the FED are behind the #8 ball. To continue their policy of controlled deflation of the economy and American assets, they need to keep interest rates low. That reduces the value of the dollar. If they raise interest rates, the Stock Market will tank as well. The obvious way to stimulate the economy (reducing the taxes on business), is against the belief of the regime. So, all the Left (including the Norwegian Nobel Peace Prize Committee) is closing ranks to prop up Obama.
It's official: Obama is a failure.
Reciting a poem commemorating the practice of awarding the Nobel Peace Prize. The more it hurts America, the bigger the chance.
Leftist Logic.
It’s four in the morning, but I can not sleep,
The furnace keeps roaring, somewhere down deep.
It’s thirty four outside, a cold Texas fact
And late in October it’s the Algore effect.
Like the march cancelled against global warming
Due to a snow storm or excess ice falling,
Or the lecture at Princeton, or was it at Harvard
Coldest October in twenty and a hundred.
It must be ole' Algore high up in the air
Burning up carbon in a private jet plane.
Flying home quickly to no one’s surprise
Proud recipient of the Nobel Peace Prize.
Isn’t it strange to have named the Peace Prize
For the Inventor of the first dynamite?
It’s Swedish logic why Arafat and Begin
Ended up winners, the great Prize they sharing.’
Or Jimmy Carter, and there was no maybe,
For helping that Democrat, Ayatollah Khomeini.
The only thing amiss and it must be a wonder
Missing Bill Clinton for a romantic blunder.
It’s Leftist logic and not very wise,
The bigger the failure, the bigger the Prize.
It’s a bad omen that Barak Obama
Is being measured as the first black Messiah.
©Geezer Béla in Exile
All but commercial use permitted
Oct 28, 2008, Mt Vernon, TX
Leftist Logic.
It’s four in the morning, but I can not sleep,
The furnace keeps roaring, somewhere down deep.
It’s thirty four outside, a cold Texas fact
And late in October it’s the Algore effect.
Like the march cancelled against global warming
Due to a snow storm or excess ice falling,
Or the lecture at Princeton, or was it at Harvard
Coldest October in twenty and a hundred.
It must be ole' Algore high up in the air
Burning up carbon in a private jet plane.
Flying home quickly to no one’s surprise
Proud recipient of the Nobel Peace Prize.
Isn’t it strange to have named the Peace Prize
For the Inventor of the first dynamite?
It’s Swedish logic why Arafat and Begin
Ended up winners, the great Prize they sharing.’
Or Jimmy Carter, and there was no maybe,
For helping that Democrat, Ayatollah Khomeini.
The only thing amiss and it must be a wonder
Missing Bill Clinton for a romantic blunder.
It’s Leftist logic and not very wise,
The bigger the failure, the bigger the Prize.
It’s a bad omen that Barak Obama
Is being measured as the first black Messiah.
©Geezer Béla in Exile
All but commercial use permitted
Oct 28, 2008, Mt Vernon, TX
Thursday, October 8, 2009
Who will be right about gold?
Some Wall Street Analysts predict a future drop in gold. Bespoke Investments, for example, predict a drop in gold price by the end of the year. See graphic:
The actual gold price, however, is beginning to take on some serious upside potential. I expect gold prices to retreat now to preserve the 2 up, 1 down, 1.5 up, .75 down then another 2 up, etc. pattern, so I expect gold prices to retreat some tomorrow. But not too far. Tomorrow's gold fixing should tell. If tomorrow's gold price reaches 1070 or near then we have a far stronger rally than even I expect.
b
Looking at gold prices, one must take into consideration the underlying fundamentals. The deliberate policy of the Obama regime to deflate the US economy by deflating US assets means that there are more and more dollars that buy less and less. This alone would eventually cause inflation, even though the rise in prices is counterbalanced because unemployed people are desperate to raise cash. In fact, what the regime is doing is transferring wealth to other countries by reducing the value of our money. There is more going on than the Obama regime destroying American assets; it is also printing more and more dollars to continue its Munchausen by proxy Socialist policies. So, gold is rising in value because everyone is converting dollars into gold.
If it were only gold, one might deny the fact that the laws of economics are working. But, the loss of value in the dollar is reflected not only in increased value for gold, but for other commodities as well. Here is a report from today's market action:
Equinox Minerals jumped 5.15 percent ...
Rio Tinto jumped 5.23 percent ...
European Goldfields jumped 7.45 percent ...
Atlas Iron jumped 8.2 percent ...
Fortescue Metals jumped 9.12 percent ...
Hallador Petroleum jumped 11.3 percent ...
And many other resource stocks surged even higher!
If the Obama regime will try to fight the increase in gold value, it will only succeed in squandering our gold stock as well. But then the dissipation of American wealth IS THE POLICY of the Obama regime.
The War on the Dollar.
Those of you who read these posts have come to understand my take on what is happening in the world, especially in the United States. Essentially, we have fallen into the clutches of a collection of radicals, perverts and fruitcakes. The way they see it, the instability in the world is caused by the United States being too rich and too powerful. So, they aim to trim what they consider undesirable: our wealth and our power.
The Obama regime is following the path that Hitler took: becoming the financial stabilizer of the country and the source of economic power and medical care. In order to control the country, the regime's allies in the FED and its affiliates had collapsed the banks and rescued them with monopoly money. They have now set us on a course where they guarantee and control industries. Our wealth is being down-sized. How? By making energy more expensive and by lowering the value of the dollar. By manipulating the banks and mortgages, the regime hopes to induce deflation and "fight" that with large sums of printed currency.
The world is not populated by fools but various kinds of villains, so they know that our government is intent on lowering the value of the dollar. That is why the world is buying gold, silver, oil, uranium, copper, metals and other commodities. These will increase in price, because they are not denominated in dollars, but in their actual (or perceived) value.
The power over international monetary matters have now been ceded to the G-20, which includes China and Brazil, two Socialists countries. Their interest is to allow the Obama regime to reduce the value of the dollar. In fact, the Gulf States no longer sell oil in dollars and that is the first international step to dethrone the dollar as the world's reserve currency.
My forecast remains the same: gold rising and the dollar falling. Gold has set new highs two days in a row and doing it again today. While, I thought that gold would take a breather yesterday, it merely slowed its ascent and continues to rise today. We can expect the price of gold to rise to the 1,300 indicated by the reverse head and shoulders, but it could be even 1,500.
Good investing!
The Obama regime is following the path that Hitler took: becoming the financial stabilizer of the country and the source of economic power and medical care. In order to control the country, the regime's allies in the FED and its affiliates had collapsed the banks and rescued them with monopoly money. They have now set us on a course where they guarantee and control industries. Our wealth is being down-sized. How? By making energy more expensive and by lowering the value of the dollar. By manipulating the banks and mortgages, the regime hopes to induce deflation and "fight" that with large sums of printed currency.
The world is not populated by fools but various kinds of villains, so they know that our government is intent on lowering the value of the dollar. That is why the world is buying gold, silver, oil, uranium, copper, metals and other commodities. These will increase in price, because they are not denominated in dollars, but in their actual (or perceived) value.
The power over international monetary matters have now been ceded to the G-20, which includes China and Brazil, two Socialists countries. Their interest is to allow the Obama regime to reduce the value of the dollar. In fact, the Gulf States no longer sell oil in dollars and that is the first international step to dethrone the dollar as the world's reserve currency.
My forecast remains the same: gold rising and the dollar falling. Gold has set new highs two days in a row and doing it again today. While, I thought that gold would take a breather yesterday, it merely slowed its ascent and continues to rise today. We can expect the price of gold to rise to the 1,300 indicated by the reverse head and shoulders, but it could be even 1,500.
Good investing!
Tuesday, October 6, 2009
How accurate were my forecasts?
OK, here is the forecast from Sep 29 this year:
I think gold will not move much tomorrow. It is getting ready to pull back a little.
"...the scenario predicted by Cycle Theory is still in effect: we will have a rally in gold to maybe 1,300 and the Stock Market will continue to rally. Then ,when interest rates are raised (and some in the Fed promise a large and fast rise), the Stock Market will collapse and also the economy. The price of gold mining stocks will tumble along with other stock prices. At some point, gold mining stocks will begin another rally, as the FED panicks and drops interest rates again, and gold prices will then move past 2,000/oz. The Stock Market will not recover untill the Obamabots are gone from power and Capitalism is re-established in 2013,..."
Let's check the facts:
Here is the S&P 500 today. It is up.
And here is the dollar. It is down as expected.
And here is gold. It set a new record high today, on the sixth of October.
I think gold will not move much tomorrow. It is getting ready to pull back a little.
Saturday, October 3, 2009
The "carry trade."
The "carry trade" is a way to keep the value of your currency low with the mistaken belief that by having a cheap currency, you increase export, This was the practice of Japan and it is responsible for near zero growth in Japan and what has become known as the "lost decade." Japan in fact downsized itself. Its stock market was kept low, its growth had stopped and its population started to implode.
Here is how the carry trade worked. If you were a billionaire, you could borrow Japanese yen and pay a half a percent of interest on it per year. You could then buy into other currencies that paid you a 3-4% interest, pocket the difference and even gain more as the Yen deteriorated. The practice kept the Japanese Yen low in value, syphon out Japanese capital and downsize the Japanese economy and nation.
That is what is in store for us.
Here is how the carry trade worked. If you were a billionaire, you could borrow Japanese yen and pay a half a percent of interest on it per year. You could then buy into other currencies that paid you a 3-4% interest, pocket the difference and even gain more as the Yen deteriorated. The practice kept the Japanese Yen low in value, syphon out Japanese capital and downsize the Japanese economy and nation.
That is what is in store for us.
Signs of economic failure mount.
Obamanomics is based on the idea that the artificially induced financial panic produced Sep 15, 2008 can be cured by the injection of ever increasing FED money. If you are an economist, you watch with fascination to see if all what you have been taught works as you have been told. If you are an interested individual (such as me), you watch with trepidation as you see the Obamabots recreating the 1930s and trying to CHANGE us into a socialist society. It is a process accompanied by incredible hubris, like Obama going to Copenhagen, expecting that his mere presence would sway the IOC to award his crooked friends in Chicago the 2016 Olympic games to milk.
I do not know if I have the gift of words to describe the economic mess the FED has created to elect Obama and its further efforts to negate the effects of the 'mark to market' coup against America. So, let me start. Through various machinations, the FED helped the banks develop an astounding 200+ Trillion bundle of derivatives that sit on the bank balance sheets as "assets." This is more than three times the derivatives that were on bank balance sheets before the meltdown. These derivatives are interest rate sensitive. Should the FED raise interest rates, these "assets" decrease in value and will set off another meltdown of the banks and the Stock Market as well.
So, the FED is obliged to keep interest rates low. How low? The current rate is as low as it can get between 0 and 0.25%. This creates other problems. First, the value of the dollar is reduced viz other currencies and gold. So, the FED must keep interest rates low to keep the Stock Market up, but the low rate is reducing the value of the dollar. The FED can counter this by letting some of the hot air out of the derivatives bubble (which creates some deflation), which reduces money velocity and slows the economy. The FED can also try to manipulate gold prices by selling US gold or borrowed gold, but there is only so much it can do.
The result? A slow economy, high unemployment, loss of the value of the dollar and restiveness in the Stock Market. The FED can not deal with one pile of money without affecting other things. Stagflation with high unemployment is the best the country can hope for under Obamanomics. A continuous downsizing of America is the radicals' goal and it is happening. The edifice of Capitalism is crumbling and people are losing jobs and wealth.
Soon, Liberals will start blaming Obama personally. They will not admit that their ideas are at fault. To be fair to the man, he is just a ventriloquist's dummy, his speeches written for him, delivered via a teleprompter and economic moves are directed by shadowy figures.
I do not know if I have the gift of words to describe the economic mess the FED has created to elect Obama and its further efforts to negate the effects of the 'mark to market' coup against America. So, let me start. Through various machinations, the FED helped the banks develop an astounding 200+ Trillion bundle of derivatives that sit on the bank balance sheets as "assets." This is more than three times the derivatives that were on bank balance sheets before the meltdown. These derivatives are interest rate sensitive. Should the FED raise interest rates, these "assets" decrease in value and will set off another meltdown of the banks and the Stock Market as well.
So, the FED is obliged to keep interest rates low. How low? The current rate is as low as it can get between 0 and 0.25%. This creates other problems. First, the value of the dollar is reduced viz other currencies and gold. So, the FED must keep interest rates low to keep the Stock Market up, but the low rate is reducing the value of the dollar. The FED can counter this by letting some of the hot air out of the derivatives bubble (which creates some deflation), which reduces money velocity and slows the economy. The FED can also try to manipulate gold prices by selling US gold or borrowed gold, but there is only so much it can do.
The result? A slow economy, high unemployment, loss of the value of the dollar and restiveness in the Stock Market. The FED can not deal with one pile of money without affecting other things. Stagflation with high unemployment is the best the country can hope for under Obamanomics. A continuous downsizing of America is the radicals' goal and it is happening. The edifice of Capitalism is crumbling and people are losing jobs and wealth.
Soon, Liberals will start blaming Obama personally. They will not admit that their ideas are at fault. To be fair to the man, he is just a ventriloquist's dummy, his speeches written for him, delivered via a teleprompter and economic moves are directed by shadowy figures.
Friday, October 2, 2009
Is the economy recovering?
The Obama regime has been touting the change in GDP. In Q2, the GDP dropped only one percent, but this is not an indication of recovery.
Let's look at various parameters. Unemployement is now over 10% (officially 9.8%). It is not getting better. In fact, another 263,000 jobs have been lost in the latest period. What about the GDP figure, you ax? Very much distorted. How? The GDP includes government spending and government spending is being fueled by borrowed money and printed money. So, the economy is not recovering. There is no international recovery either.
Housing - one of the legs of the economy? The government has moved in and most of the mortgage money is now poured in by the FED. The Lumber Index is stuck in low gear just as construction season is winding down. This leg is weak.
Consumer confidence and spending. The other leg of the economy. Consumer confidence took an unexpected drop in the latest reporting. Consumer spending is dragged down by the many people out of work. There is no adaquate substitute for jobs.
Stock Market. The S&P 500 is running out of steam. So are a lot of the stocks. Overall, the Stock Market is still doing OK.
The S&P 500 is taking a hit, but is still running ahead of the 50DMA and the DJI is likewise doing well. Where you note deterioration is in the monthly average plotted against the 200 DMA. The S&P 500 is yet to confirm a Bull Market by crossing the 200 DMA.
Let's look at various parameters. Unemployement is now over 10% (officially 9.8%). It is not getting better. In fact, another 263,000 jobs have been lost in the latest period. What about the GDP figure, you ax? Very much distorted. How? The GDP includes government spending and government spending is being fueled by borrowed money and printed money. So, the economy is not recovering. There is no international recovery either.
Housing - one of the legs of the economy? The government has moved in and most of the mortgage money is now poured in by the FED. The Lumber Index is stuck in low gear just as construction season is winding down. This leg is weak.
Consumer confidence and spending. The other leg of the economy. Consumer confidence took an unexpected drop in the latest reporting. Consumer spending is dragged down by the many people out of work. There is no adaquate substitute for jobs.
Stock Market. The S&P 500 is running out of steam. So are a lot of the stocks. Overall, the Stock Market is still doing OK.
The S&P 500 is taking a hit, but is still running ahead of the 50DMA and the DJI is likewise doing well. Where you note deterioration is in the monthly average plotted against the 200 DMA. The S&P 500 is yet to confirm a Bull Market by crossing the 200 DMA.
Gold and the dollar. Gold continues to have higher highs, in spite of dire predictions from the cycle thory. While, gold is taking a breather (and testing the 990 support level), the dollar is rallying some. Yet everyone considers this rally temporary.
Obamanomics has failed and we are most likely in for another drop in the Stock Market.
Thursday, October 1, 2009
Changes in US economic outlook.
Changes in the US economic frame work.
The New Deal.
The frame work of the US economy underwent three changes during the last century. The first change was the Depression. The Stock Market bubble and its unwinding was used by America’s Socialists to introduce the New Deal. Part of the New Deal was repealed in order to win WWII. The US remained a basically market-driven economy.
The Reagan revolution.
Ronald Reagan rolled back some of the confiscatory taxes the Left had imposed and had proven that supply side economics works. That is, if you reduce the taxes of high earners (who know best how to earn money), the economy grows faster than if the government goes into deficit spending to try to stimulate the economy. The Left succeeded in preserving Social Security (a govt Ponzi scheme), but failed to sabotage the economy or save the Soviet Union though unilateral disarmament of the US. Communism was beaten.
The Obama CHANGE.
The Obama regime began even before this impostor was elected. In order to recapitulate the Roosevelt Presidency, the economy had to be crushed so various Socialist programs could be started or enlarged. The basic mechanism of crushing the economy was the imposition of the ‘mark to market’ rule. This gave the faceless bureaucrats the tool to stop money circulation and bring the GDP down very quickly. Obama was elected. Following the election, a bunch of radical Leftists were installed as “Czars,” but the proper name for them is “Commissars” –unelected Party hacks who answer to no one except the President.
The new regime quickly acted to nail down some of its priorities: a) setting aside billions to promote Democrats re-election in 2010, b) nationalize the automobile and insurance industries and control the financial industry, c) control (reduce) energy production and c) try to nationalize the health care industry. Michelle Obama told a woman’s group that the Movement that brought Obama to power has government-run insurance on its program next. Shutting down Talk Radio is next and then disarming the population and the establishment of a political army.
The regime made assumption on how the economy would work. The basic assumption is that money flowing from various pools are isolated so the Regime can control them separately. That is the classic flaw of Socialist economic thinking.
The New Deal.
The frame work of the US economy underwent three changes during the last century. The first change was the Depression. The Stock Market bubble and its unwinding was used by America’s Socialists to introduce the New Deal. Part of the New Deal was repealed in order to win WWII. The US remained a basically market-driven economy.
The Reagan revolution.
Ronald Reagan rolled back some of the confiscatory taxes the Left had imposed and had proven that supply side economics works. That is, if you reduce the taxes of high earners (who know best how to earn money), the economy grows faster than if the government goes into deficit spending to try to stimulate the economy. The Left succeeded in preserving Social Security (a govt Ponzi scheme), but failed to sabotage the economy or save the Soviet Union though unilateral disarmament of the US. Communism was beaten.
The Obama CHANGE.
The Obama regime began even before this impostor was elected. In order to recapitulate the Roosevelt Presidency, the economy had to be crushed so various Socialist programs could be started or enlarged. The basic mechanism of crushing the economy was the imposition of the ‘mark to market’ rule. This gave the faceless bureaucrats the tool to stop money circulation and bring the GDP down very quickly. Obama was elected. Following the election, a bunch of radical Leftists were installed as “Czars,” but the proper name for them is “Commissars” –unelected Party hacks who answer to no one except the President.
The new regime quickly acted to nail down some of its priorities: a) setting aside billions to promote Democrats re-election in 2010, b) nationalize the automobile and insurance industries and control the financial industry, c) control (reduce) energy production and c) try to nationalize the health care industry. Michelle Obama told a woman’s group that the Movement that brought Obama to power has government-run insurance on its program next. Shutting down Talk Radio is next and then disarming the population and the establishment of a political army.
The regime made assumption on how the economy would work. The basic assumption is that money flowing from various pools are isolated so the Regime can control them separately. That is the classic flaw of Socialist economic thinking.
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