Foreword
For greater insight into our publication, have a look at the Overview of Tedbits. It
helps current and potential subscribers understand our mission in serving
you. It also gives a broad description of what's unfolding globally and what
you can expect from Tedbits as a regular reader.
Note to our readers regarding Tedbits
availability: Starting in June Tedbits publications will be
available to registered subscribers 2-3 days earlier than to the general
public. If you are not a registered subscriber, sign up now.
In This Issue
That 70's Show
Introduction
Wowee, things sure are unfolding
quickly. Volatility is front and center as confusion reigns supreme in the
broad investing public, driving them all over the place except to where they
should be focusing. "Volatility is opportunity" and it is abundant,
providing prepared investors with gargantuan opportunities. If you are not
benefiting from it, "do more homework" or find a new advisor who
does. The bear market in PAPER assets, or those underpinned by them, are in
full retreat creating GIANT "fingers of instability" (see Tedbits archives
at www.TraderView.com) which provide opportunities for
astute investors. The reflation game is just beginning - it is in the early
innings (2nd or 3rd) - and the ballgame is the unfolding "Crack up
Boom." The credit crisis is set to move beyond Wall Street onto Main
Street over the next six months exacerbating the collapse in income
throughout the G7, as illustrated by the WOLF WAVE pattern detailed in a
chart in the Tedbits 2008 Outlook (see Tedbits archives at www.TraderView.com).
The pauses that refresh the investment
themes that accelerated at the stock and credit market peaks last summer are
now beginning to re-establish themselves. Crude Oil would appear to have
finished its corrective activity and if it finishes on Friday evening (weekly
charts instead of daily, April 11th) where it closed last night (Wednesday,
April 9) it will signal a quick move to $120 to $125 dollars a barrel SOON! Do
you really think gold can go down for long if crude oil does not? They don't
call it BLACK GOLD for nothing. A barrel of crude oil is roughly the same
price today as priced in gold as it was a decade ago, fifty years ago and
during the great depression. They are hooked up at the belly button. Gold is
still correcting and is off the highs by 10%, while crude is breaking higher
with projections 10% higher. Gold is on sale at the bargain basement.
The reflation of the financial sector
has hardly begun and it is in its infancy. Money supplies (money with zero
maturity and reconstructed M3) are growing gangbusters and will continue to
do so. Leviathan government throughout the G7 is expanding at high
single-digit rates and, as the G7 no longer creates wealth but consumes it at
ever more aggressive rates, the FIAT currency and credit creation are set to
at least stay at current levels and will probably have to accelerate to meet
the deficit spending requirements of Mandarins in Capitals throughout the G7.
The IMF and World Bank are convening in Washington this weekend to hatch their
plans to what else? PRINT MORE MONEY out of thin air to underpin the
financial and banking sectors. Robbing their very own citizens and those who
hold their currencies of the value in those currencies while they sit in the
BANK!
Monetary policy is no substitute for
proper fiscal policy and that is where the heart of the problem rests. Unless
they change course in an aggressive manner and unleash behavioral policies to
stimulate the creation of wealth (there is no chance of this as there is no
constituency for it anywhere within the G7) we are now set to repeat:
That 70's show
During the 1970's an ECONOMIC storm
erupted in the United
States as runaway regulations, inflation
and taxes virtually destroyed the economy's ability to grow. As things got
worse and worse, the laws of unintended consequences propelled public
servants into huge mistakes in monetary and fiscal policy. As public servants
are creatures of command and control when things do not go as they wish, they
go back to their core "instincts" in the belief that they can write
a little piece of paper called a regulation or law and change the laws of
nature and man. So what they do is attempt to control EVERYTHING, and as they
do they set in STONE economic FAILURE.
Destroying incentives to produce and the
ability to innovate, they find better ways of doing more for less (definition
of capitalism) and create wealth; which is what drives rising living
standards and an expanding middle class. It is clear that those lessons have
now been forgotten and are now going to be relearned the hard way. Americans
all agree that the President, whose approval ratings are at 25%, and
congress, whose approval ratings are below 20%, are on the wrong track
economically.
Since history is no longer taught and
economic history is just for us OLD FOGIES, no one really remembers that
period except the parents of the baby boom generation. In the early 1970's
Richard Nixon was dealing with the guns and butter policies he inherited from
Lyndon Johnson and a period which marked the creation of massive new
entitlements known as Medicare and Medicaid, as well as a costly foreign war
against the Boogey Man then known as Communism. Due to massive US government
deficits and the war fiat dollars were ROLLING off the presses as fast as
they could be created, currency debasement was ripping at the dollar.
Nixon closed the gold window, as he had
to, to avert a run on the treasury and its gold as foreign governments were
demanding their money in Gold! Bretton Woods II was convened and the floating
abomination of a system we have today was born. If you look at the pattern of
the year, the Wolf Wave (see the 2008 Outlook at Tedbits archives at www.TraderView.com),
you will notice that this is when it was BORN; destroying the last vestiges
of gold backing to G7 currencies.
This was not hard to achieve as public
servants in all countries love to print MONEY which they can then use to buy
constituencies, reward supporters and secretly confiscate their citizen's
wealth through currency debasement and deficit spending. Think of it as
another way to raise and collect taxes that most people never understand. Federal
Reserve Chairman Arthur Burns invented the concept of "core"
inflation with the cost of "food and energy" removed. So, since the
inflation numbers stunk they decided to remove those stinkers which impact us
all. Now they do this same thing to these and myriad other categories as
well, lying with numbers has become politically correct to make the public
believe they are doing a good job.
The "something for nothing"
personality was MAD as living standards were declining, as they were paying
more for less of everything and inflation had them on the war path to stop
those greedy corporations and "foreign devils" from destroying
their lives. Corporations, small businessmen and the RICH were greedy and
needed to be punished for their SIN of working hard, saving and leading
prudent lifestyles. They wanted CHANGE, free goodies from government and
ECONOMIC security all courtesy of PUBLIC SERVANTS and expanded government. They
elected public servants to congress with that mission statement.
THEY GOT WHAT THEY WISHED FOR AS
STRAIGHT JACKET REGULATIONS, INCREASING TAXES AND MANDATED BENEFITS DESCENDED
ON THE PRIVATE SECTOR.
Taxes skyrocketed to pay for free lunch
programs, health care and the private sector mandates of wages and benefits
from Washington
which created runaway inflation to PAY for it. Economic students learn in
Econ 101 that there is a law of nature called TANSTAAFL (There ain't no such
thing as a free lunch). Somebody always pays. Name one public servant
PROMISE that has reached YOU? Government control of the private sector
rose relentlessly as did taxes. OSHA (Occupational Safety and Health Agency)
and numerous other alphabet agencies wrote and implemented endless new
regulations and mandated the smallest details of everyone's life. Zillions of
words were added to the tax code to reward supporters, torture their
competitors and those that produced wealth. Loop holes galore, bought and
paid for with campaign support.
To be productive and create wealth was a
ticket to punishment; so there was always less of it as to do so NEVER PAID
OFF. The public always wished for an end to declining living standards and
runaway inflation and the public servants and government always delivered
more of it. Destruction of the economy of the United States at the hands of
public servants and government was a one way freight train.
At its end when Jimmy Carter was elected
president on a platform of "Change and Hope" inflation was AT LEAST
8% and by the end it was 15 to 18%, gold hit its high of $850 and crude oil
hit highs that only recently were exceeded. Government was torturing the
private sector and taxes, which had risen to confiscatory levels, combined
with the silent tax called inflation made life difficult and REAL living
standards were declining rapidly. By the end of Jimmy Carter's reign of
terror people only held approximately 10 to 20% of their holdings in paper. Jimmy
was a peanut farmer, one of those hardy souls who rely on government
subsidies just as the sugar growers do. He knew the government printing
presses well for both directions. If your wealth was to be preserved, it had
to be placed in "things" that could not be printed. The public had
learned the art of self defense from the policies of government, and it's a
lesson they will relearn soon.
Well guess what? By my calculations it
is 1972!
In conclusion: We are descending into a
repeat of the history of those times, only far worse. The public is mad but
unable to understand anything past short phrases and simple meanings as they
have been dumbed down.
The media has painted the policies of
the government of George Bush as that of Ronald Reagan, when in reality
Pinocchio is Jimmy Carter or WORSE. Government regulations have almost
doubled but George is hard at work with over 200,000 bureaurats, er, bureaucrats
busily writing new ones to reward his SUPPORTERS in the final rush of a lame
duck. The supplement business is about to regulated into the hands of BIG
pharmaceutical firms after nary a problem for centuries to PROTECT YOU! You
can expect cost increases of 1000%. Taxes and fees are HIGHER than when he
took office and the government has grown by 60%. The unfunded liabilities
have grown from $20 trillion dollars to almost $60 trillion since he took
office and the national debt which is acknowledged has risen from under $5
trillion to almost $9 trillion.
If you stand for what Reagan stood for
-- less government, less taxes, less inflation, less regulations, capitalism,
personal freedom, wealth creation and expanding middle classes -- you have no
chance of being elected (there is only a constituency for more of the same)
and you are looked at as if you are insane, just ask Ron Paul. So "Free,
Free, Free" in exchange for a vote for me is the chant from the election
trail.
Nobody remembers the 70's, its causes
and cures. There is one major difference between then and now: The US was the
greatest CREDITOR nation in the world and had savings for a rainy day. Conversely,
today the US
is the world's greatest DEBTOR and it's raining!
Mandated benefits and wages, FREE
healthcare, destruction of the export industry, higher taxes and job-killing
protectionism are set to increase EXPONENTIALLY. The Colombian Free Trade
Agreement which lowered tariffs on our EXPORTS to them was shelved by those
wonderful Mandarins in Washington DC. Columbia can already export to the US
tariff free; it would have been BOTH ways. It would have created lots of JOBS
for manufacturers in Ohio, Michigan and the whole country.
Exports are one of the few bright spots
of a lower dollar, unfortunately it would appear that the public servants
don't want those jobs for Americans and customers for American businesses. So
as wealth creation suffers another withering blow from populism they will
have to substitute the printing presses for income and tax growth which will
find friendlier places from which to operate. Since the US and the G7 have
de-industrialized themselves and our supplier's currencies are rising,
inflation is now being imported and the deflationary era that once was is
over. The G7 no longer has a manufacturing base or the ability to produce
many of the goods they consume.
The credit crisis is in the second
inning as about $200-225 billion dollars has been recognized and there is
three times more blood to be spilled before it is estimated to be complete. Interest
rates are profoundly negative. Reflation and inflation is the order of the
day, week, month and decade to come. The only solutions that these
economically illiterate G7 leaders know are: PRINTING MONEY and deficit
spending, which returns a dime for a dollar, as fiscal policy changes are all
along the lines of the current G7 administrations only more of all of it. The
G7 capitals of Brussels, London, Paris, Madrid, and Berlin are a chorus to
these policies. Taking from the most productive in society and feeding
it to the weakest. This is cannibalism of the worst variety.
Consuming more than you produce is against the laws of nature; it is the
definition of socialism and the policy of INSOLVENCY. Creating policies of
growth is not being considered ANYWHERE in the G7; only considered is the
growth of the money supply which creates the illusion of growth, but alas it
is only inflation.
So inflation is set to go to the moon
and unemployment is set to skyrocket as the Wolf Wave signals the unfolding
collapse of income in the G7 as a result of public policies. The markets are
set to move BIG TIME from these policies. Energy, food, everything is about
to shoot higher. The producer price index is signaling inflation in the
pipeline of over 6%, meaning fewer profits to be available for higher wages,
future investment and tax remittances. Higher prices for everything are in
the near future. Capital gains taxes (not indexed to inflation) are set to be
increased by 30% and the biggest tax hike in history is set for 2010. Income
short consumers are set to DEFAULT on their unsecured obligations and the big
three automakers are going to have to deal with 20% falls in demand. What
will they do? PRINT the money. The solution to these problems, reduction of
government, is NEVER even considered and won't be.
So inflation is the only solution and is
the POLICY of GOVERNMENT. The socialization of the risks of the banking and
financial systems has commenced. Investment and money center banks are
packaging up their trash lending into CDO's and being sent directly to the
fed lending windows. Public servants are proposing lowering borrowing
requirements back to those which created the sub prime crisis in the first
place (practically ninja with virtually no money down), applying GOVERNMENT
guarantees to the lenders and handing the tab to the taxpayer -- now through
the printing press and later to bail out the deadbeat borrowers which
believed they can have "something for nothing" and are entitled to
it because they live in the G7.
The "Crack-up Boom" is moving
into a higher gear. Taking investment for the future and feeding it to the
least productive and robbing the children of their futures. The emerging
world's public servants are focused like a laser beam on economic growth,
wealth creation and a bigger economic pie while the G7 public servants are
focused on securing power over others and redistributing a shrinking economic
pie. Volatility is opportunity and it is set to explode. Learn to short
circuit the printing presses and set your investment sails to capitalize on
these unfolding REALITIES.
Ty Andros & Tedbits LIVE on web TV.
Don't miss Ty interviewed live by Michael Yorba from Commodity Classics every
week discussing this week's commentary and unfolding news. Catch the show every
Wednesday at www.YORBA.tv or www.CommodityClassics.com at 4:15pm
Central Standard Time. Archived video casts are available
there as well.
If you enjoyed this edition of Tedbits
then subscribe - it's free,
and we ask you to send it to a friend and
visit our archives for
additional insights from previous editions, lively thoughts, and our guest
commentaries. Tedbits is a weekly publication.
Click here and I will
prepare a complimentary, no-obligation, custom-tailored set of portfolio recommendations
designed to specifically meet your investment needs. Thank you.
Subscribe to Tedbits - Click Here
Tell a Friend About TedBits - Click Here
By : Theodore
“Ty” Andros
www.traderview.com
Ty
Andros & Tedbits LIVE on web TV.
Don’t miss Ty interviewed live by Michael Yorba from Commodity
Classics every week discussing this week’s commentary and unfolding
news. Catch the show every
Wednesday at www.MN1.com or www.CommodityClassics.com
at 4:15pm Central Standard
Time. Archived video casts
are available there as well.
If you enjoyed this edition of
Tedbits then subscribe – it’s free,
and we ask you to send it to a friend
and visit our archives
for additional insights from previous editions, lively thoughts, and our
guest commentaries. Tedbits is a
weekly publication.
![](http://www.24hgold.com/24hpmdata/articles/2008/04/img/20070428155.gif) ![](../style/all/img/bouton/Zoom_in_6.png)
Tedbits is authored by Theodore "Ty" Andros, and is registered with TraderView, a registered
CTA (Commodity Trading Advisor) and Global Asset Advisors (Introducing
Broker). TraderView is a managed futures and alternative investment
boutique. Mr. Andros began his commodity career in the early 1980's and
became a managed futures specialist beginning in 1985. Mr. Andros'
duties include marketing, sales, and portfolio selection and monitoring,
customer relations and all aspects required in building a successful managed
futures and alternative investment brokerage service. Mr. Andros
attended the University of San Diego,
and the University of Miami, majoring in Marketing, Economics and Business
Administration. He began his career as a broker in 1983, and has worked
his way to the creation of TraderView. Mr. Andros is active in Economic
analysis and brings this information and analysis to his clients on a regular
basis, creating investment portfolios designed to capture these unfolding
opportunities as the emerge. Ty prides himself on his personal
preparation for the markets as they unfold and his ability to take this information
and build professionally managed portfolios and developing a loyal clientele.
Tedbits
may include information obtained from sources believed to be reliable and
accurate as of the date of this publication, but no independent verification has
been made to ensure its accuracy or completeness. Opinions expressed are
subject to change without notice. This report is not a request to
engage in any transaction involving the purchase or sale of futures contracts
or options on futures. There is a substantial risk of loss associated
with trading futures, foreign exchange, and options on futures. This
letter is not intended as investment advice, and its use in any respect is
entirely the responsibility of the user. Past performance is never a
guarantee of future results.
|