UNCOMMON COMMON SENSE
For People Who Think
Aubie Baltin CFA, CTA, CFP, PhD.
GIVE ME LIBERTY OR GIVE
"These are the times that try men's souls. The
summer soldier and the sunshine patriot will, in this crisis, shrink from the
service of his country; but he that stands for it now, deserves the love and
thanks of every man and woman." --Thomas Payne
THE DOOR TO LIBERTY
A few decades ago, one of
the jobs that I applied for required a battery of examinations including a
comprehensive personality profile. After three days of psychological tests,
the career profiler who compiled my assessment said with the utmost candor,
"You are crazy!" He got no rise out of me since I have received
that kind of appraisal once before, but he did offer a fresh perspective on
it. He continued, "Not crazy in the pathological sense, but crazy in
that you are one of only a very few people out of thousands that I have
profiled who actually thrives in the midst of crisis and conflict. Most
"normal people" try to avoid crisis and conflict at all costs. He
labeled my folder, "Warrior" and I did not get the job. In light of
my penchant for what Sam Adams called "the animated contest for
freedom," I offer the following opinion about the future of American
On occasion I have been
critical of Barrack Obama, a phony "community organizer" con man,
(like Clinton and Carter before him) who, with the help of his Leftist
Puppeteers, and a far left Media, masterfully duped sixty nine million
Americans into giving him the most expensive public housing and benefits
package in the world. There is no one more critical than I of this charlatan's
political endeavor to demolish free enterprise under a mountain of debt and
regulations bomb and from the economic rubble, resurrect a transformed USA
subject to tyrannical rule by Government via a form of Democratic Socialism
or more properly defined by the word Fascism. Obama built his presidential
campaign around a "Hope: and "change" theme:
History has taught us
well: From the smallest community (our Pilgrims and the Israeli Kibbutz) to
Cuba and all the way up to the largest countries, Russia, India and China,
the full implementation of Socialism (Communism) has never worked to
"improve the lives of its people." As I have noted previously,
Democratic Socialism, like National Socialism (Nazism), is in reality Marxist
Socialism. Plain and simple, it is nothing but Fascism repackaged. They, just
as all that came before them, seek a centrally planned economy directed by a
single-party (controlled by an Individual Dictator) and the state controls
economic production by way of regulation, rules and high taxation in the
guise of fairness through income redistribution.
The success of Democratic
Socialism can only be temporarily achieved by eliminating Essential Liberty--
the rights "endowed by our Creator" - in the name of a false
promise of Government Security, that ends up lowering the standards of living
for all (except of course for the favored ruling class elite).
Indeed, Obama's mission
was from the very beginning the transformation of the economic and political
crisis, that both Republicans and Democrats created. This is the horse that
he rode in on. But we can turn the tables on him so that it can also be the
horse that he and his Socialist cadre ride out on.
Truth be told, I want to
"fundamentally transform" what our nation has become after eighty years
of incremental encroachment upon Rule of Law by socialist predators, the most
brazen offenders in history being FDR culminating with Nixon, Carter and
Obama. Indeed, I too do not want the current economic and political
"crisis to go to waste." I see it as a great opportunity to
"change" our economy just as it was changed after the Civil War
into the thirty of the greatest years of progress for the common man in the
history of the USA and the World. Of course, the opportunity I see in the current
crisis is diametrically opposed to that which Obama and his Leftist cadres
envision. I see a new dawn for Liberty with minimal interference by
government in the affairs of men and business. For all Patriots, steadfast in
our devotion to Freedom, the sun is rising on our most pressing goals: To
preserve the legacy of Liberty for this and future generations and the
transformational restoration of Constitutional Rule of Law. In order to
achieve these goals, we require the transformational reformation of
government in fulfillment of Thomas Jefferson's contention, "The tree of
liberty must be refreshed from time to time with the blood of patriots and
tyrants." Let us pray that America's second civil war will not require
guns and the blood of patriots, which can only be avoided if we act now
before it is too late.
Many believe that the
current economic crisis had its beginnings in 2008 with the surprisingly
sudden collapse in real estate values and its subsequent banking crisis, but
it did not. It was one hundred years in the making, beginning with Teddy
Roosevelt and whose acceleration began in earnest with FDR (even a Democrat
packed Supreme Court overturned some of FDR'S laws , as being
unconstitutional) all the way up to the present day, thanks to the ever
increasing desire for more and more power of both main stream parties. The
Obama Administration used the cover of our current crisis to implement its
so-called "stimulus plan" which only served to stimulate the growth
of central government at an enormous cost in inflation and lost jobs. All of
which resulted in an accelerated accumulation of crushing national debt, now
approaching $17 trillion with $1 trillion (more realistically $2
trillion/year) deficits as far as the eye can see, which short of bold
intervention has placed our economy on a collision course with a catastrophic
collapse. The Commerce Department reports that the American economy grew at
an annualized rate of 1.8% in the third quarter of 2012. However, using the
real inflation rate of 5% and using real money, the economy really grew at a
The declining status of
the U.S. Dollar as the world's safest and only Reserve fiat currency is a
metaphor for the decline of our standing as the world's beacon of liberty as
well as the decline of "American exceptionalism."
Despite all the
considerable barriers to economic recovery, there is still time for a
transformational restoration of constitutional Rule of Law and the return to
Free Market Capitalism that comports with the Spirit and Laws of our Constitution.
But that will require bold intervention, and it will require that a majority
of the members of Congress honor and abide by their oath of office.
At present, there are
outstanding plans on the table to put prosperity over property including the
Republican Study Committee's Budget for FY 2012 and the Heritage Foundation's
comprehensive plan to restore prosperity. But both studies are all not good
enough because both are an accountant's response to a fundamental structural
government problem. No one can fix a system (Socialism) that by its very
design is destined to fail from the outset.
House and Senate leaders
are stepping out with bolder propositions to cut government spending as a
prerequisite to raising the national debt ceiling. That too will fail.
Speaker John Boehner has drawn the line in the sand, and he may even hold to
it. But that too will not solve our problems because we cannot possibly tax
enough or cut enough entitlements to even begin to pay off our ever
increasing debt. Nothing can possibly solve our problems without a commitment
to reforming the way government works, which in turn must require Term Limits
of one eight year term and one term only, without which nothing of this kind
could ever get enough votes to pass.
However, even with
significant spending cuts and reforms to reduce our debt, it too will fail.
So too will the Conservative Senate Leaders' calls for a Balanced Budget
Amendment as a condition to any agreement on increasing the national debt
limit. (It will never pass even if somehow it came to a vote and even if it
did pass, it won't work.) WHY? Because debt limit increases and spending are
immediate and spending cuts are pushed off on some future Congress that will
not adhere to the spending cuts.
All this is just Pie in
the Sky political rhetoric and part of election politicking.
Call me crazy -- that
profiler and others certainly have -- but I clearly see a new dawn for
Liberty, brought to us by God's intervention in bringing us Glen Beck, The
Tea Party Movement, Sarah Palin and Herman Cain; a combination of which would
be unbeatable and would take the problems of race out of the picture not for
2012 but perhaps forever as 15% to 25% of African Americans would vote
Republican. I believe, as did President Ronald Reagan that, "America's
best days are yet to come. Our proudest moments are yet to be. Our most
glorious achievements still lie ahead."
But I also know, as did
he, that "Freedom is never more than one generation away from
extinction. We CANNOT pass it on to our children through our genes. It must
be fought for, protected, and passed on through education and more
importantly, by example for them to do the same, or one day we will spend our
sunset years reminiscing about what it was once like here in the United
States, when men were really born free."
THE TIME HAS COME TO
STAND UP AND BE COUNTED
It is possible to arrange
your investments so you don't have to worry about the approaching cliff that
we are about to go over. Personally, I don't want to be one of the lemmings
that blindly follow each other over the cliff. There are a small number of
unusual situations that will make you money even if the dysfunctional clowns
in Washington never get their act together. Once you own these
securities, you won't have to worry about how politicians are mistreating our
economy. In fact, the worse they behave, the better off you'll be.
If the endgame of Obamanomics reaches its UNSTOPABLE conclusion... and/or
as investors realize that a new president can do very little to fix anything
in the short run... these coming economic Tidal Waves will rollover your
finances, but there are moves that you can make that could save your
financial life. Few investors realize that these unusual escape routes even
exist. But bringing investors out-of-the-mainstream investments is exactly
what UNCOMMON COMMON SENSE is all about: I don't operate like other financial
publishers. I don't accept advertising and I don't hire journalists. Every
recommendation is from me or someone that I know who has personally created
his own investment wealth-not from blowhard media pundits.
Such as TBT, QID, BGZ, SKF.
The perfect inflation hedge-and a good place to keep
your money in any scenario, this pick gets you into an asset class not one
investor in 100 is aware of: The company is called Pacific
Coast Oil Trust. It trades on the NYSE as "ROYT." It gives you
an instant stake in 276 oil wells. Even better, it's yielding 10.1%. Most oil
companies are pretty complex. But this oil investment couldn't be any simpler.
Do your own homework and check out this 10% yielder for yourself.
HIGH YIELD FLOATING RATE
These funds buy loans
made by major banks such as JP Morgan to large corporate borrowers. But they only
buy loans issued at floating rates, which reset every 60 to 90 days. So if
inflation increases and interest rates rise, you'll earn more. And even at
today's low rates; I'm finding floating-rate bank securities that offer
steady yields of 7%. If inflation starts bucking up, you'll be earning 8%,
9%, and even 10% or more on these notes.
Senior Loan ETF: Safe
funds for yield chasers (BKLN). Do your homework and check out these funds
for yourself to determine if these investments are suitable for you.
DIVERSIFICATION: Is a
very sound investment principle and one that I have been overlooking in my
letters. It is never too late to begin diversifying.
I ALWAYS TRY TO USE THE
ONE INVESTING PRINCIPLE THAT ALWAYS WORKS
How does one beat the
market on a regular basis? By following the same one used by J. Paul Getty.
What did Getty know about building wealth and investing for spectacular gains
that his contemporaries didn't? A few years before he died, Getty shared his
"secret." He explained that whenever he made an investment, he
tried to apply one simple principle: If you want to make money, really big
money, do what nobody else is doing. Is that not
also what Warren Buffett tries to do?
I HAVE TRIED TO MAKE THIS
THE GUIDING PRINCIPLE OF UNCOMMON COMMON SENSE.
In Getty's own words,
"Buy when everyone else is selling and hold until everyone else is
buying." This is not merely a catchy slogan. It is the very essence of
successful investment, most commonly known as "Contrary
Investing". Everybody always talks about being a contrarian, but few
actually are because it also means that you must be anti-social. "Tell
100 people about impending bad news and 95 will automatically HATE you. And
should you be so UNFORTUNATE as to be right, so will
the other 5".
It is probably the
simplest, sanest, most powerful and reliable money-making technique ever
devised to buy low and sell high for maximum profit. It works in any market,
from stocks and bonds to gold and real estate-because human nature
NEVER CHANGES. You don't need special training to profit from contrary
investing. All you need is THE COURAGE TO STAND ALONE. If you want to
buy low and sell high, you must train yourself to buy when everybody, including
yourself, is feeling discouraged-when the news is bad and getting worse. We
are then most likely to be near the bottom. And you should sell when
everybody is excited and the news is good because that's likely to be the
top. (GOOG and AAPLE have both been recently touted as being stocks to hold
forever.) Are you or are you not a Contrarian?
Unfortunately, too many
people do exactly the opposite - They are trend followers as are most hedge
funds, stock advisers, all brokerage firms and investment letters.
UNCOMMON COMMON SENSE'S
documented track record goes back to 2002 when I was already SUPER BULLISH on
Gold and Silver and still am. I turned Super Bearish on the Market and Real
Estate in November and December 2007, while staying bullish on Gold and
Silver. The rest is history for all to see in my files at Gold-Eagle.com
THE TRADERS BIGGEST
Ask any trader how to
make money in the market and they will tell you "BUY LOW AND SELL
HIGH" which is absolutely WRONG. By far, the great majority of
successful traders and trading systems are TREND FOLLOWERS such as Investors
Business Daily's Cup and Handle. They are all predominately "BUY HIGH,
SELL HIGHER" whether they admit to it or not. By the way, this does not
contradict J.P. Getty or for that matter Warren Buffett. Never confuse short
term trading with long term investing.
HOW NOW DOW
Stocks plunged FRIDAY
November 1st and Tuesday, October 23rd, the worst single day decline since
June 2012. Stocks topped when the Fed announced QE3. Since then, the
Industrials are down 4.2%, not a major decline, but noticeable. Apple
Computer announced its latest technology innovations on Tuesday and Apple
fell 20 points (3.26% on the news). Apple Inc. accounts for a 4.9% weighting
of the S&P 500 and a whopping 18.9% of the NASDAQ. The Industrials fell
243 points Tuesday, with DuPont getting killed (down 9%) and MMM losing 4%.
Earnings for the S&P
500 companies are down 2.5% from a year ago. That is a huge amount of money taken
out of the economy. It is a shrinking pie, which means tax revenues will be
down, jobs will be eliminated not created, and trouble lays ahead. That is
the fundamental picture. Tuesday's and Friday's declines were the large price
move in stocks that Monday's small change in the McClellan Oscillator was
suggesting was coming over the next few days.
Now the technical
Neither decline was a 90%
panic selling down day, so we do not have selling capitulation. The decline
from mid-September is choppy and not looking impulsive to me, suggesting it
is corrective inside a larger degree rising trend. These 2 declines did
trigger new sell signals in a number of short term and Secondary Trend
Indicators. These sells mean most of our key indicators are on sell signals
and suggest more downside is possible over the short-run.
However, this is not an
impulsive decline, it is a corrective wave b-down, which means we are
not going to see selling capitulation at its conclusion; we are not going to
see new lows in the 600+ area; we are not going to see overwhelming panic
selling at its bottom unless Obama wins big and maintains control of the
Senate and wins back control of the house. Wave c-up is next and will
likely start without selling capitulation occurring first. The evidence
tonight suggests wave c-up should start within one to two weeks
perhaps after the election, perhaps sooner. Why do I believe this? First,
there was a phi mate turn date ideally scheduled for October 25th, +/- five
days, and a Bradley Model turn scheduled for November 1st, probably pointing
to the same turn. Second, and probably most importantly, the VIX generated a
Buy Signal Set Up on Tuesday, October 23rd. It did not trigger a new Buy, but
most of the time when it sets up, a Buy signal arrives within a few days. In
each instance, a significant rally began within days of the Buy signal, and
took prices up for several days and weeks. This is a reliable trend indicator
- amazing actually. On Tuesday, the VIX closed above the upper boundary of
the 2 standard deviation Bollinger Bands. Once it closes back inside the
bands, it triggers a Buy signal. Also, the 10 day Average Advance/Decline
Line Indicator is not suffering much during the decline from mid-September.
This scenario becomes all the more valid with a Romney win. Trannies actually
rose almost 1% on Tuesday, with the small cap Russell 2000 not falling much.
Apple is very oversold on its Daily Full Stochastics. In conclusion, I see stocks could fall a bit
more over the next week, then bottom and rise sharply into year end. Precious
metals should follow stocks. Then, the Jaws of Death pattern will be
completed and a massive decline will start.
GOLD AND SILVER
Silver lost its luster
after the 2011 rally peaked just below the ballyhooed bull target at the
all-time high of $50 an ounce set in 1980. The drop from $48 to the $26 July
lows measured a nearly 50% decline from the peak. A breakout rally in the iShares Silver Trust (NYSE: SLV) above the
$26-$28 channel top in September began the recovery rally. The latest pause
in the upward run offers opportunity with support sitting at $28 - $30 to
lean on. As a side note, if you adjust that record price for inflation over
the 30+ years, the real upside target for silver sits significantly higher at
$140, but my target for 2017 still remains at $250+.
FOR INVESTORS: BUY ON
WEAKNESS AND HOLD. Disregard current manipulation of precious metals.
Every day, 5,000 tons of
silver and 650 tons of gold are traded in the paper market. This is an
astonishing 25% of annual production of each metal that is traded daily.
Currently, there is clearly intervention to hold down the price of gold and
silver at every important level. Like all interventions, this one will fail
too. The paper market is massively short and would be incapable of delivering
even a small fraction of physical gold or silver against their commitments.
So what we are seeing is
a short term correction in the continuous rise in gold and silver against
paper money. The correction is likely to be short lived and eventually will
lead to new highs. But investors should not really be concerned. Gold and
Silver will continue to reflect the escalating deficits and the never-ending
money printing by governments.
We know that no
government is capable of maintaining any serious level of austerity. They all
fear this will automatically lead to rejection by the voters and loss of
power. So governments worldwide will continue to spend money they don't have
and print endless amounts of it. The situation is the same for both
candidates. Neither candidate is capable of taking any measure that will cut
the escalating deficits. Since Bernanke became chairman of the Fed in 2006,
the Federal Debt has doubled from $8 trillion to $16 trillion! But this is
only the beginning. There is nothing that will change the trend of rising
deficits and rising gold (except the introduction of TERM LIMITS of one eight
term and one term only).
MORE IMPORTANTLY: JPM and
the rest of the Bullion Bank Precious Metals MANIPULATORS are nearing the end
of their rope as it becomes more and more obvious that they do not have the
Metals they are supposed to have in their vaults. The proof of that is that
more and more countries, like Germany, Holland, Venezuela, etc. are demanding
return of their GOLD. Once the situation reaches a head, gold and silver
prices will explode. Continue to buy on weakness. The Friday down move was a
gift. I hope you all took advantage of it.
GOOD LUCK AND GOD BLESS
THE COMING YEAR IS CERTAINLY
NOT THE TIME TO BE GOING IT ALONE
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Uncommon Common Sense
Aubie Baltin CFA, CTA,
2078 Bonisle Circle
Palm Beach Gardens FL 33418
561-840-9767 GRATUIT 561-840-9767
Please Note: This article is for
education purposes only and is designed to help you make up your own mind,
not for me to make it up for you. Only you know your own personal
circumstances so only you can decide the best places to invest your money and
the degree of risk that you are prepared to take. The Information and data
included here has been gleaned from sources deemed to be reliable, but is not
guaranteed by me. Nothing stated in here should be taken as a recommendation
for you to buy or sell securities.