Few May Imagine What Is Coming
A worthy read...There seems to be a single constant in the financial world, and those who play. There are few if any perma-anythings, with most chasing the bull, or chasing the bear as a bear-bull in the moment. It looks like the last of the Perma for Life people are dying off as the last of the generation that endured the Great Depression find their rest in the soil.
The generation who made roads in the dirt, flew paper airplanes, and dreamed the impossible dream are now gray haired, and either broke or millionaires. There is little ground in between the extremes that was once a maxim 20-60-20 rich/middle class/poor. What seems to exist today is a younger generation with no imagination, incapable of taking a block of wood and shoving it around the dirt pile in dreams of logging trucks, and crawler tractors. Lost are the majority who created art, and music in its natural form. There are no lifelong collectors of anything, only a headlong rush from contemporary to abstract, and back in hyper-realism. Value is now replaced with greed, and get it now before the color fades. Bringing a face to this reality was a conversation with a PhD, retired, from NASA, who spoke to me about the fear in NASA that the upcoming generation’s imagination has been lulled to sleep by fast TV, fast girls, and constant bombardment of stimulation instead of self-generated creativity.
To a more direct point. Even the supposed perma-bears of today run helterskelter, seeking profit and gain first in that, and then in this, with no long-living devotion to any belief. Most current Bears do not care about fundamentals and history. None seem to care whether or not they are playing in a AntLion hole from which they will never escape. The greed of gaining the last drop of blood from the dying carcass of both bears and bulls is foremost on the heart of the young and younger. No person not directly from a Great Depression family is prepared for what will come. That means that unless your parents where born no later than 1920, you cannot have any basis to form an understanding for the potential pain of a real collapse. There are a few foreigners who understand, but I read nothing of what they may have to say.
‘They Won’t Let It Happen’
It can never happen…Bernanke will not let it happen…the Government is not going to . . .. they will take care of us…I’ll make so much in the crash it will not matter. . . I’ll be OK. Please add your own reassurance to the list, as there are many more excuses offered by temp-bearbulls. The pessimist rarely makes the big killing in the stock market like a tempbull will. Someone who experienced the Great Depression does not act like today’s tempbull. There is one great difference between the Great Depression and today where The People are concerned. Nearly everyone in 1920 knew how to take care of him or herself. They knew meat came from a cow, and milk did not come from a bottle. And yet today, the young cannot imagine a milk bottle delivered to the door by the milkman. Nor have they ever imagined a family coming together to butcher a steer and can the meat because there was no freezer.
I see no imagination in the pages, blogs, and opinions written by financial wizards, or the wizard bulls who are smarter than a non-emotional chartist who knows the pendulum slows, stops, and slowly speeds up to strike down everything past dead center. There is only one thing that cannot be taken from someone, and that is knowledge. And even here, I have seen hypothermia take my mind, my strength, and my soul into a black pit of nothingness. The majority of bulls and bears today have never experienced hypothermia. Nor have the wishy-washy bears seen $1 million on the books that they will never eat, that they cannot turn into warmth or food.
A Rosy Filter
I guess that unless one has seen the valuelessness of gold while you shiver your way into darkness, there just isn’t a perspective to create a reality. This is why I spoke of imagination and NASA as I wrote. The generation born into the Sixties has not experienced loss in any form. That generation is without understanding, or imagination to see through a mental filter created by pain and loss as past generations have. The 1960s filter of democracy is a rosy filter of much, more, and always more. Even in the annals of bear-market writers there exists temp-bearbulls looking to ride the next wave for an hour or a day.
Is it time for the Super Depression ? Probably, because the majority who have lived through that kind of pain are all dead and gone. Will the greedy temp-bearbulls get trampled? Yes ! But not before they see the millions they’ve won by trading correctly fail to provide them with anything of value. And what of us hard-currency nuts? You tell me! But Steve, you say: there are so many suffering without jobs today. True enough. But in 1934, there wasn’t any unemployment in the place where my dad pulled a crosscut saw for $1.00 pre thousand, part-time. (That’s about 50 cents a day, since there was someone on the other end of the saw). There weren’t any government handouts in Sutherland, where the mill ran one day a week, or one day a month, and where the women rejoiced in their diary: “The men worked today!” The more bears who think they are going to make a killing on the crash, the nearer we are to that crash.
I think Mr. Market is going to suck the blood out of nearly everyone — but especially from Bears who think Mr. Market is their friend in crushing the Bulls. Imagine “Value” and imagine what value really is in its most basic sense. I’d tell you what value is, but you either know, or will not listen to this ol’ radical gloom-and-doomer.
Source: rickackerman.com
Guest Post: Hyperinflation, Part II: What It Will Look Like
We never got out of the first recession. If the U.S. and Europe continue to slow down, that’s going to affect everyone. Jim Rogers is an author, financial commentator and successful international investor...
Marc Faber: Exploding deficits will "doom" U.S. Treasurys
The 30-year party is over...
Marc Faber: Exploding deficits will "doom" U.S. Treasurys
The 30-year party is over...
“I think that there isn’t much upside potential in Treasurys unless it’s for the short term. But if I look 10 years ahead, where do I want to have my money, then certainly not in US Treasuries” in CNBC M...
Banks back switch to China's renminbi for trade
There are no markets, just manipulations
Ron Paul: Get Rid of the Fed
WATCH Rep. Ron Paul explains why he is calling for an audit of the government's gold holdings and why the Federal Reserve should not exist.Cancer & Desperation of QE2
Double dip, like hell! The bottom is going to fall out.
The smoke and mirrors modest upturn in economic statistics primarily due to the FASB capitulation in April of 2009 comes to an end as the Ski Jumper gets airtime.
Regards,
Jim Sinclair
Housing is Dragging the Economy to Hell CIGA Eric
A little more than two months ago, banking analyst Meredith Whitney said on CNBC, “Unequivocally, I see a double-dip in housing. There’s no doubt about it . . . prices are going down again.”
Housing, an asset that depreciates over time, is a function of demographics, leverage, and access to credit (emphasis on access to credit in recent years). Once the credit machine shutdown in late 2008, housing began to revert to its unleveraged, supply and demand driven mean price. The virtuous cycle, positive reinforcing credit on the upside, had turned vicious by negatively reinforcing credit and home prices on the downside. I suggest that once currency devaluation is removed, no discernable “bounce” can be recognized from which a dip could materialize. The steep and largely uninterrupted down trend in the U.S. median home price (MHP) to gold since 2005 illustrates this point.
Source: usawatchdog.com
More…
Jim Sinclair’s Commentary
Non-recourse loans? So without ethics, why not screw the lender?
Commercial Property Owners Choose to Default CIGA Eric
The banking system pressed hard for the new bankruptcy laws in 2005. Now those laws are biting them in the arse as more investors default and walk away. The commercial property investors are more professional, so they won’t waste time in doing so. For them it’s a good business decision. Rather than throw good money at a bad situation, they simply choose to walk away.
Like homeowners walking away from mortgaged houses that plummeted in value, some of the largest commercial-property owners are defaulting on debts and surrendering buildings worth less than their loans.
Source: online.wsj.com
More…
Dear Eric,
This thing is going to unwind so fast that other than us here at JSMineset, no one will believe it.
Jim
Bullish Sentiment Plummets to Credit Crisis Low CIGA Eric
Following the herd is rarely profitable. The herd is bearish. Such readings tend to be associated with capitulation rather than an initiation of a trend.
The number of individual investors who have a bullish outlook on the stock market for the next six months plunged to 21 percent, from 30 percent last week, according to a widely followed sentiment survey.
What’s more, this is the lowest weekly reading from the American Association of Individual Investors since a March 2009 level of 19 percent, which occurred just before the S&P 500 collapsed to a 12-year low of 676.
American Association of Individual Investors Sentiment Survey:
More…
QE to infinity is, and will continue to occur. Gold will trade at $1650 and higher.
Respectfully,
Jim Sinclair
Bernanke Signals Stepped-Up Efforts to Spur Economy By SEWELL CHAN
Published: August 27, 2010
JACKSON HOLE, Wyo. — The Federal Reserve chairman, Ben S. Bernanke, said Friday that the central bank was determined to prevent the economy from slipping into a cycle of falling prices, even as he emphasized that he believed growth would continue in the second half of the year, “albeit at a relatively modest pace.”
To help sustain the economy, Mr. Bernanke gave his strongest indication yet that the Fed was ready to resume its large purchases of longer-term debt if the economy worsened, a move that would add to the Fed’s already substantial holdings.
“We have come a long way, but there is still some way to travel,” Mr. Bernanke said.
“I believe that additional purchases of longer-term securities, should the F.O.M.C. choose to take them, would be effective in further easing financial conditions,” Mr. Bernanke told a Fed policy symposium here. He was referring to the Federal Open Market Committee, the panel that sets interest rates, which Mr. Bernanke leads; some members have expressed unease over the prospect of the Fed pursuing any further monetary accommodation.
“Central bankers alone cannot solve the world’s economic problems,” he said.
More…
Posted: Aug 27 2010 By: Dan Norcini Post Edited: August 27, 2010 at 3:30 pm
Filed under: Trader Dan Norcini
Dear CIGAs,
The equity bulls were salivating over the prospect of watching another episode of “let’s take the shorts out and slaughter them all” as the world eagerly awaited the giving of the law from Mt. Jackson Hole. With claps of thunder in the background and with flashes of lightning interrupting his keen observations upon the state of the US economy, (some swear that they saw the angelic host), the prophet of Monetary religion sounded forth his prognostications and then looked upon his handiwork. He then saw that his work was good and sat down and rested on the seventh day.
Yessiree folks – Chairman Ben uttered his incantations making all well with the turbulent world and bringing light and order to darkness and chaos. I do not know about you, but I feel so much better today after Ben told us all that he is going to make sure that the recovery is safeguarded from harm. When you combine that with news that instead of the economy slowing from a growth rate of 2.4% down to 1.3% as expected, it only slowed down to a 1.6% growth rate, well, it just doesn’t get any better does it?
I mean, the first thing I immediately thought of is, “Why don’t I rush out and buy lots of copper because things are really getting better in a hurry”. Already forgotten are the abysmal housing stats of less than a week and the further rise in foreclosures and delinguencies, not to mention the clogged condition of the bankruptcy courts. Chairman Ben has whisked all of that out of the minds of investors with one mere pronouncement.
The fact that it has taken gazillions of conjured-into-existence-out-of-no-where dollars (some call that stimulus) to produce this pitiful growth rate number for the quarter, seems to have escaped the attention of the equity perma bulls who have yet to come to grips with the consequences of all of this. My own view is that it should be a relatively easy matter to get that growth rate up to double the figure given us. All we would need to do to get to 3.2% growth rate is to print twice the number of Dollars and double the rate of government indebtedness. That should be good for another 100 point rally in the Dow. If anyone knows the number that comes after quadrillion, please send that on to Ben and company. They are going to more than likely be needing it.
Seriously, it is hard to hide my contempt of this disgusting scene. This band of fools somehow believes that prosperity can be created by printing money without any consequences whatsoever. The US is sinking under a mountain of indebtedness and the Fed chairman tells us that it stands ready to engage in even more QE should the need arise. Flash to Ben – the need shall arise. China is already balking at buying US debt meaning you are going to have to buy it all yourself Ben.
What we are witnessing is the death throes of a debt-based monetary system of which those presiding over it apparently have come to believe their own delusions. The US public is learning what our grandfathers learned as a result of the Great Depression – Debt is something to be avoided – not heaped up and accumulated. That the borrower becomes the lender’s slave and that living beyond ones own means is inherently foolish and dangerous. That saddling one’s children and grandchildren with a debt burden that they did not create is immoral and wicked. Yet, all of this is lost upon the monetary lords who have their noses so close to the ground sniffing out the scent that they cannot see the path ahead leads off the edge of an abyss from which there is no escape. Or perhaps they do see and are attempting to secure their own parachutes before leading the rest of the masses over the edge.
I repeat – if lasting prosperity could be created by printing money and giving it away, previous generations that were wiser and more frugal than ours would long ago have stumbled upon this axiom.
That brings us to the war on gold. I am still amazed that after all these years and notwithstanding all the evidence to the contrary, there are still those obtuse enough to insist that there are no official sector attempts to manage or stem the rise in the price of gold. Gold is the only currency that these debasement thieves cannot pollute by conjuring more of it into existence. It rises when distrust of paper currencies is high and confidence in the ability of those who supposedly manage monetary affairs wanes. Thus it is and always will be in direct competition with unbacked fiat currencies.
Our money masters hate the yellow metal because its rise mocks their absurd assertions and debunks their claims of being able to “manage the economy”. It strikes, dagger-like, at the very hubris of these elitists who think that they are wiser than the collective judgment of the entire market, they alone possessing such keen insight into the nature of these matters that we should entrust our financial health to their hands. Imagine the conceit of a few men who think that by pulling on this lever or pushing on this button, that they can assure continuous prosperity and lasting wealth for all. Every generation considers itself wiser than the previous one which is why history does indeed repeat itself. Arrogant men never learn for they lack the one thing essential to make one truly wise – the ability to admit that we do not know all things nor that we mere mortals can always fix what ails us.
Back to the charts however – gold is being capped by its enemies near $1,245 in order to prevent an upside breakout and subsequent run to the lifetime high. Short term oriented traders saw that it could not pass through this level and decided to sell out. Dip buyers who have a longer term perspective, came in however and appear to be active today preventing much in the way of downside movement.
The weekly close was positive but I would have liked to have seen it close over $1,245 to set up more buying enthusiasm for next week. As noted on today’s chart, this week was the 4th consecutive week in which gold closed higher.
From a seasonal perspective, gold has turned higher right on schedule and if history is any guide, the odds favor a move higher into the 4th quarter from here. Keep in mind that even on a seasonal trade, the market never goes straight up. We are talking about the tendency or trend to rise from this point. What gives rise to the seasonal pattern is jewelry buying as the Christmas and other various holidays season approaches. That is an extra source of demand that generally is fairly reliable. It should be noted however that it is not jewelry demand that is driving the price of gold; it is investment demand. The jewelry demand is just an extra kicker.
Silver had quite a day today careening quite wildly as it soared to $19.34 and then faded back to unchanged. I suspect some of the longs who had some very nice paper profits decided to ring the cash register and go home for the week feeling pretty good about themselves. Bulls make money; Bears make money but Pigs get slaughtered. Morgan probably showed up above $19.20 anyhow. Even at that, it is very impressive at how shallow yesterday’s dip lower was and how short-lived it was.
We’ll see what kind of light this week’s COT reports will shine on the goings on in both pits. If I note anything of significance, I will post something up. The moves in silver in particular over the past three days unfortunately are not going to be detailed internally in this report but we will catch Tuesday’s action and that might provide a clue as to what occurred in there the remainder of this week.
The HUI, while not showing quite the gains of the broader S&P 500, is slightly higher today. Bulls are fighting to close the index above 480 which would be quite a technically impressive feat. Should they be able to hold their ground, such a close today would set up a strong possibility of a run towards 500 next week. It all depends on just where this thing closes this afternoon. A drop back down towards 470 would embolden share shorts who would try to take them lower in the early part of next week. A strong push past 480 gives the bull the clear advantage heading into the same time frame. The battle is joined.
Bonds got the snot beat out of them today as the steepeners were put back on with flatteners getting forced out. Judging from the ferocity of the downdraft, it looks like too many got caught leaning too heavily on one side of the market and were snared. Someone made one helluva lot of money today in the bonds if they decided to sell when Bernanke decided to start yakking. Even with the strong move lower, the bonds remain in an uptrend. We will see how they fare if and when they approach the 20 day moving average near 131^31.
The highest monthly close in the bonds was 138^02 back in December 2008. They spiked about one point shy of this at 136^31 this week but ran out of momentum. This area seems to be offering significant resistance. I shudder to think of the implications for all of us should it have given way. AS it is, bond bulls now have to take this level out in convincing fashion to continue the relentless rise in this market. Next week, and in particular next month, are going to be key to the future direction of this pit.
Once again the Dow mystically moved back above the 10,000 level. It seems that level has now become somewhat of a national security matter.
Click chart to enlarge today’s hourly action in Gold in PDF format with commentary from Trader Dan Norcini
The equity bulls were salivating over the prospect of watching another episode of “let’s take the shorts out and slaughter them all” as the world eagerly awaited the giving of the law from Mt. Jackson Hole. With claps of thunder in the background and with flashes of lightning interrupting his keen observations upon the state of the US economy, (some swear that they saw the angelic host), the prophet of Monetary religion sounded forth his prognostications and then looked upon his handiwork. He then saw that his work was good and sat down and rested on the seventh day.
Yessiree folks – Chairman Ben uttered his incantations making all well with the turbulent world and bringing light and order to darkness and chaos. I do not know about you, but I feel so much better today after Ben told us all that he is going to make sure that the recovery is safeguarded from harm. When you combine that with news that instead of the economy slowing from a growth rate of 2.4% down to 1.3% as expected, it only slowed down to a 1.6% growth rate, well, it just doesn’t get any better does it?
I mean, the first thing I immediately thought of is, “Why don’t I rush out and buy lots of copper because things are really getting better in a hurry”. Already forgotten are the abysmal housing stats of less than a week and the further rise in foreclosures and delinguencies, not to mention the clogged condition of the bankruptcy courts. Chairman Ben has whisked all of that out of the minds of investors with one mere pronouncement.
The fact that it has taken gazillions of conjured-into-existence-out-of-no-where dollars (some call that stimulus) to produce this pitiful growth rate number for the quarter, seems to have escaped the attention of the equity perma bulls who have yet to come to grips with the consequences of all of this. My own view is that it should be a relatively easy matter to get that growth rate up to double the figure given us. All we would need to do to get to 3.2% growth rate is to print twice the number of Dollars and double the rate of government indebtedness. That should be good for another 100 point rally in the Dow. If anyone knows the number that comes after quadrillion, please send that on to Ben and company. They are going to more than likely be needing it.
Seriously, it is hard to hide my contempt of this disgusting scene. This band of fools somehow believes that prosperity can be created by printing money without any consequences whatsoever. The US is sinking under a mountain of indebtedness and the Fed chairman tells us that it stands ready to engage in even more QE should the need arise. Flash to Ben – the need shall arise. China is already balking at buying US debt meaning you are going to have to buy it all yourself Ben.
What we are witnessing is the death throes of a debt-based monetary system of which those presiding over it apparently have come to believe their own delusions. The US public is learning what our grandfathers learned as a result of the Great Depression – Debt is something to be avoided – not heaped up and accumulated. That the borrower becomes the lender’s slave and that living beyond ones own means is inherently foolish and dangerous. That saddling one’s children and grandchildren with a debt burden that they did not create is immoral and wicked. Yet, all of this is lost upon the monetary lords who have their noses so close to the ground sniffing out the scent that they cannot see the path ahead leads off the edge of an abyss from which there is no escape. Or perhaps they do see and are attempting to secure their own parachutes before leading the rest of the masses over the edge.
I repeat – if lasting prosperity could be created by printing money and giving it away, previous generations that were wiser and more frugal than ours would long ago have stumbled upon this axiom.
That brings us to the war on gold. I am still amazed that after all these years and notwithstanding all the evidence to the contrary, there are still those obtuse enough to insist that there are no official sector attempts to manage or stem the rise in the price of gold. Gold is the only currency that these debasement thieves cannot pollute by conjuring more of it into existence. It rises when distrust of paper currencies is high and confidence in the ability of those who supposedly manage monetary affairs wanes. Thus it is and always will be in direct competition with unbacked fiat currencies.
Our money masters hate the yellow metal because its rise mocks their absurd assertions and debunks their claims of being able to “manage the economy”. It strikes, dagger-like, at the very hubris of these elitists who think that they are wiser than the collective judgment of the entire market, they alone possessing such keen insight into the nature of these matters that we should entrust our financial health to their hands. Imagine the conceit of a few men who think that by pulling on this lever or pushing on this button, that they can assure continuous prosperity and lasting wealth for all. Every generation considers itself wiser than the previous one which is why history does indeed repeat itself. Arrogant men never learn for they lack the one thing essential to make one truly wise – the ability to admit that we do not know all things nor that we mere mortals can always fix what ails us.
Back to the charts however – gold is being capped by its enemies near $1,245 in order to prevent an upside breakout and subsequent run to the lifetime high. Short term oriented traders saw that it could not pass through this level and decided to sell out. Dip buyers who have a longer term perspective, came in however and appear to be active today preventing much in the way of downside movement.
The weekly close was positive but I would have liked to have seen it close over $1,245 to set up more buying enthusiasm for next week. As noted on today’s chart, this week was the 4th consecutive week in which gold closed higher.
From a seasonal perspective, gold has turned higher right on schedule and if history is any guide, the odds favor a move higher into the 4th quarter from here. Keep in mind that even on a seasonal trade, the market never goes straight up. We are talking about the tendency or trend to rise from this point. What gives rise to the seasonal pattern is jewelry buying as the Christmas and other various holidays season approaches. That is an extra source of demand that generally is fairly reliable. It should be noted however that it is not jewelry demand that is driving the price of gold; it is investment demand. The jewelry demand is just an extra kicker.
Silver had quite a day today careening quite wildly as it soared to $19.34 and then faded back to unchanged. I suspect some of the longs who had some very nice paper profits decided to ring the cash register and go home for the week feeling pretty good about themselves. Bulls make money; Bears make money but Pigs get slaughtered. Morgan probably showed up above $19.20 anyhow. Even at that, it is very impressive at how shallow yesterday’s dip lower was and how short-lived it was.
We’ll see what kind of light this week’s COT reports will shine on the goings on in both pits. If I note anything of significance, I will post something up. The moves in silver in particular over the past three days unfortunately are not going to be detailed internally in this report but we will catch Tuesday’s action and that might provide a clue as to what occurred in there the remainder of this week.
The HUI, while not showing quite the gains of the broader S&P 500, is slightly higher today. Bulls are fighting to close the index above 480 which would be quite a technically impressive feat. Should they be able to hold their ground, such a close today would set up a strong possibility of a run towards 500 next week. It all depends on just where this thing closes this afternoon. A drop back down towards 470 would embolden share shorts who would try to take them lower in the early part of next week. A strong push past 480 gives the bull the clear advantage heading into the same time frame. The battle is joined.
Bonds got the snot beat out of them today as the steepeners were put back on with flatteners getting forced out. Judging from the ferocity of the downdraft, it looks like too many got caught leaning too heavily on one side of the market and were snared. Someone made one helluva lot of money today in the bonds if they decided to sell when Bernanke decided to start yakking. Even with the strong move lower, the bonds remain in an uptrend. We will see how they fare if and when they approach the 20 day moving average near 131^31.
The highest monthly close in the bonds was 138^02 back in December 2008. They spiked about one point shy of this at 136^31 this week but ran out of momentum. This area seems to be offering significant resistance. I shudder to think of the implications for all of us should it have given way. AS it is, bond bulls now have to take this level out in convincing fashion to continue the relentless rise in this market. Next week, and in particular next month, are going to be key to the future direction of this pit.
Once again the Dow mystically moved back above the 10,000 level. It seems that level has now become somewhat of a national security matter.
Click chart to enlarge today’s hourly action in Gold in PDF format with commentary from Trader Dan Norcini
"Every government degenerates when trusted to the rulers of the people alone. The people themselves are its only safe depositories." - Thomas Jefferson
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