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In this report,
we list a summary of events creating and causing our global economic problems
in chronological order covering the last ten years. It is helpful to
understand where we’ve been and where we are going for personal
security and potential gains in trading and investing. Our Northern Advisor
is one our most brilliant sources of information. He has provided things for
me that in my view are priceless and without parallel. I have known him to be
extraordinarily far-sighted and extremely accurate on his forecasts. His
perspective is one that is truly unique.
“What is
different about using AIG as the cover to move dirty funds is that
they were the conduit for stolen money going directly to Goldman Sachs
(and indirectly to the other Boyz). Since AIG isn't an 'official'
government agency, it would be hard to claim 'national security' to
sidetrack an investigation. This money shuffle through AIG is the
one weak link that might open a legal window into the greatest theft of
all time.” - Northern Advisor
It appears the
entire derivatives story once regarded as a conspiracy fairy tale is now on
the table and it is very ugly. Here are the key points following the scam
from beginning to end:
- We had a 70
year K-wave top in 2000 (1929-1999) with a crashing Nasdaq after a go-go
tech rally followed by subsequent market failures.
- Greenspan
would not endure a recession and responded by dropping interest rates to
pathetic lows; for years.
- Congressional
housing proponents, vote-grubbing boyz, wanted a chicken in every pot
and a house for everyone, irregardless of their ability to make
payments, real estate taxes, repairs, and take general good care of a
home. Those giveaway loans were blatantly outrageous and reckless.
- Mortgage
underwriting rules were thrown to the wind. Anyone with a job and a
pulse could buy a house. Some without jobs were approved on no-doc
loans. Some with names from graveyards (no pulse) were granted loan
approvals given to application scammers and thieves.
- Global
bankers were enabled to use relaxed Enron-like trading rules to write
derivatives of all kinds. Rules were nearly meaningless as borrowers and
lenders alike went nuts tossing billions.
- Housing
boomed and derivatives of several kinds were sold with reckless abandon.
Bankers made enormous fees. Risk was not considered whatsoever. Their
motto was “Let ‘er’ rip.”
- Housing and
other derivatives bubbles came to a stratospheric peak in 2005-2006 and
blew-up. We did forecast the housing debacle when June, 2005 lumber
futures went into the tank followed by crashing derivatives.
- Housing and
derivative paper sank to very low values, or zero as lenders and
borrowers imploded. The housing failure fallout could continue in most
US regions for the next three to five years.
- Damages were
so severe that if left to their own devices, many of the global banks
would have failed taking the entire economic system into the dark ages
of finance. Bear Stearns, Lehman, and Bank of America were selected as
sacrificial lambs, as certain other banks seized the moment to defile
and dispose of their competition. “Never let a good crisis go to
waste.”
- USA and
other nations’ central bankers pumped currencies and bonds to the
moon. They were printed and originated with wild abandon to cover-up the
mess and contain the damage. It continues today. Japan or China
or both could crash first. Five Euroland nations are on the edge of
collapse. The U.K. is basket case and more than one country in South
America is caving into big trouble.
- In the USA,
TARP money was stolen from taxpayers and funneled through conduit AIG to
crooked, failed bankers to reliquify their balance sheets with free
money. They are supposed to lend some out for growth but are holding it
tight earning free interest from the government; taking no risks.
- In the next
criminal act, Fannie and Freddie have been given a wide-open checkbook
for the next three years. All the USA bad real estate paper will be
funneled into these bankrupt entities and then they will be flushed and
disbanded. These loans were not paid or legally bankrupted-discharged,
but summarily, surruptitiously, hidden and dumped.
- Crooked
bankers discovered they are “Too Big To Fail” and are
doing it all over again with a tacit “no penalty”
understanding. Estimated derivative balances today are $204 Trillion
Dollars. No one will stop them until everything collapses in one final
crashing swoon.
- The order of
collapse could be moving from current deflation to inflation,
hyperinflation, back to deflation and lastly, world war to escape the
final disaster. War is always the final solution to divert the attention
of Sheeple from their pathetic broken economic existence.
- Civil
disorder appears this summer in several countries instigated by hungry,
jobless people from all working classes. So far its been contained to
car fires, vandalizism, protest marches and small riots. The deeper we
go into Greater Depression II, the worse it gets expanding into stronger
and more wide-spread violence.
- The larger
questions become: What happens on the other side after the war? Who will
lead the world? Will the US Dollar continue to be the world’s
reserve currency? Will we attempt to return to the gold standard? Will
those who were responsible for these disasters pay the price? If so how?
Will they go to jail? Will they escape the wrath of the Sheeple? What
will the economic world look like after the monster obligatory war? Who will
control global energy?
- The
controller of global energy resources, we think could be either Russia
or the USA-the ultimate winner. We would prefer to believe America will
win and survive but we cannot know for sure. Congress and the current
administration (along with some members of prior administrations) are
all equally at fault. The Sheeple, The Herd, The Middle Class, and The
Bubbas are gearing-up for a massive revolt. Who pays the price? Who
escapes? How bad will it get? No one can say for sure but we live in
interesting times in a world being changed for good.
On February 1,
2010, President Obama presented his fiscal year 2011 national budget. Since
all the bad housing paper is being off-loaded into Fannie and Freddie, they
were excluded from this new budget. Further, those two money-debt monsters
have an open checkbook for the next three years to keep buying bad mortgages.
The new budget is $3.8 Trillion US dollars and demands $1.9 Trillion in
brand new taxes on the rich and on wealthy businesses.
We do not expect
this budget to be approved as presented but there is no question taxes will
rise for all Americans and all American businesses. This will further destroy
any hopes of recovery. Larger corporations are moving overseas and will do so
with an increased frenzy. Many of them have most of their assets out of the
US already. It will be very easy to relocate the rest, fire American
employees and move on to greener international pastures.
Individual
wealthy Americans will do the same. Many of them have sold out and gone to
foreign lands as they saw the hand writing on the wall. This atmosphere will
inhibit formation of new businesses as the prospective owners when seeing
these unrealistic obligations will elect to (1) Not open any new business.
(2) Go into business overseas. (3) Reduce current profitable American
businesses and lay-off employees. (4) Shut down their US businesses, take the
cash from a potential sale and retire or move away.
When big
manufacturing moved overseas, it gutted the Midwestern United States. This
rustbelt region formerly composed of 85 million Americans is dying a slow
death. Those that can are leaving for good. The City of Detroit once held
nearly 2 million people. Today it is less than 900,000 and has 50%
unemployment. Yet the Michigan governor thrashes around trying to encourage
new companies to locate there. People are not so stupid as to go along. They
are voting with there feet. I know; I was one of them. Michigan unemployment
is officially in the teens. Reality says 25% of Michigan is out of work and
its getting worse faster than ever. California, Nevada, Arizona, Florida, New
York, New Jersey and Illinois are all in the soup.
Many still
believe Asia is the future. We think it was for a few years but China, in our
opinion, is on the verge of a fiscal meltdown. We are not alone in our
thinking. Many top analysts see things they way we do. All economies when
engaged in extremes eventually return to the norm. China is no different.
In our view,
Canada has been the best choice of any western nation; even better than
Germany, which has proven to be an economic powerhouse. Germans are stuck in
the middle of a sinking ship called Euroland. On the other hand, Canada is
rich is natural resources, and their bankers wisely stayed out of derivatives
and related messes. With the exception of some problems in manufacturing,
Canada is the future.
Our next window
for buying precious metals shares could open this week as gold has begun a
new rally along with several other commodities. We are watching to ensure
this new rally is for real but have already been invested in gold, silver,
and grain with futures spread positions for 2010.
Additionally, we
buy and recommend the purchase of gold and silver coins for personal and
retirement portfolios. Our standard recommendation is for an individual to
use 10% of their investment cash for precious metals and not sell them
whatsoever. This applies to the first $100,000 of any single account with
further adjustments on a sliding scale for larger accounts.
Our current cycle
for commodities and commodity related currencies has begun. While we hear
objections to technical patterns for these current markets we would argue
that now is the time to get busy and buy. Our record while not perfect has
been quite correct on trend and that is the objective.
In the spring of
2009 we did forecast the gold price at $1250-1260 for the December, 2009
futures. We touched $1226. The interim move was substantial and profitable
for those with positions including our own.
Summary
Be very careful
as we move forward in time. Trading is going faster and more volatile with
wider trading ranges in precious metals and other markets. Try to be in
position ahead of time rather than locking yourself into trades at the very
last minute. Futures traders should always use stops and shares traders as
well. Personally, I can see unbelievable opportunities to trade that we would
never see again for many years. Turn these problems into opportunities. Those
on the right side of the trade might get rich. Those on the other side are
just victims. Stay Alert. –Traderrog.
Roger Wiegand
www.webeatthestreet.com
Roger
Wiegand is Editor of Trader
Tracks Newsletter and of
the Rog Blog at www.webeatthestreet.com.
Roger provides recommendations for short and longer term trading using stocks,
futures and commodities with specifics.
Contact Claudio Bassi, at Trader
Track’s New York City publishing offices for a trial subscription. Call 718-457-1426 Monday
through Friday,
9:30am to 5pm or, e-mail cbassi@miningstocks.com
Recommendations
made in “Trader Tracks” are exclusively those of Roger Wiegand
and the publication is also exclusively the editorial content provided by
Roger Wiegand. TAYLOR HARD MONEY ADVISORS, INC. (THMA) LOCATED AT 33-42
61ST STREET, WOODSIDE, N.Y. 11377, ASSISTS IN THE MARKETING OF “TRADER
TRACKS.” However, the views expressed in Trader Tracks do not
necessarily reflect those of THMA (Website: www.miningstocks.com). Because
individual investment objectives vary, this summary of investments should not
be construed as advice to meet the needs of any particular reader or
subscriber. Opinions expressed in Trader Tracks are statements of judgment
expressed at the date and time they were written, and as such, are subject to
change without notice. Roger Wiegand is not a CFA nor an investment advisor,
but a private individual who studies the markets extensively and offers
summary opinions. Before any type of investment is made, you should always
seek advice from your attorney, CPA, registered broker, or financial advisor.
There is considerable risk in market speculation and investing. There are no
guarantees regarding performance and past performance provides no guarantee
of future performance. Your trading accounts are always subject to the
potential for severe or total losses. This service will involve SPECIAL
EMAIL ALERT TRADING RECOMMENDATIONS PROVIDED AT ANY TIME Roger Wiegand
believes it is opportune to trade either in or out of the market in question.
AS SUCH, THIS SERVICE WILL BE CONSIDERED A PREMIUM SERVICE. The
management of THMA, Inc. does not anticipate trading in the securities
recommended in Trader Tracks. No statement or expression of any opinion
expressed herein constitutes an offer to buy or sell the securities mentioned
herein. Trading futures contracts may not be suitable for all investors. You
may lose a substantial amount of money in a very short period of time. The
amount you may lose is potentially unlimited and can exceed the amount you
originally deposit with your broker. This is because trading futures is
highly leveraged, with a relatively small amount of money used to establish a
position in assets having a much greater value. If you are uncomfortable with
this level of risk, you should not trade futures contracts. If you need a
broker, contact mine, Ryan Olson, Managing Partner, Jackson-Olson commodities
at 800-352-5228 or by e-mail rolson@jacksonolson.com Contact Jackson-Olson
Commodities, LLC, 5510 Abrams Road, Suite# 101, Dallas, Texas 75214. Local
Telephone is 214-691-8600. Fax is 214-691-8614. Jackson-Olson clears trades
through R. J. O’Brien founded 1914. They provide clearing and execution
services in virtually all markets around the globe. To subscribe to Trader
Tracks stocks & bonds, futures & commodities, contact Claudio Bassi
with e-mail CBASSI@MININGSTOCKS.COM
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