|
"In today’s
essay we are going to scare you like you’ve never been frightened
before. If this spoils your day do not read this report. I am deliberately
doing this as many of our gold bulls suspect this
spring selling cycle is the end of the precious metals movie. We totally
disagree. Is there a significant selling event for precious and base metals
this spring? Yes! Is this the end of those gold and silver rallies
we’ve enjoyed for the last six years? No! In fact, we have new
information telling us the primary growth phase of gold opens for business
this fall of 2008. In
our view, those who bail out now and run for the hills will miss 80% of the
upside in precious metals." – Traderrog
Elaborate discussions sugar-coating economic reality
are dumped on us daily by Washington, D. C. and New York mainstream promoters
with an agenda to prolong their fun and our agony.
Mr. Greenspan, as we wrote last week during his
Jeddah speech erased trillions in the blink of an eye telling the Arabs to
“get oil sales off the dollar peg.” We suggest this was
akin to screaming fire in a global economic theatre. It’s not against
the law but certainly should be. While our former Fed Chairman helped speed
disruptions along, an irreversible mess is coming at us irrespective of
these kinds of news events.
The Federal Reserve instigating its inflation
disease upon the land since founded in 1913 has given us a dollar valuation
loss of -95% in 95 years. Some smart guys say the remaining 5% of value is
even closer to 3%. At this point splitting hairs on this pathetic mess
doesn’t matter. What really matters is when do
we feel the brunt of these problems and more importantly what do we do
about it right now before it’s too late?
There have been several ordinary recessions since
1913 and they should be considered a standard event in capitalistic
economies. Depressions are something much worse. As bad as these disasters
are they soon fade away if manipulators keep hands off and permit free
market economies to heal themselves. It doesn’t matter if we have to
deal with a recession or, a depression; the natural tendencies of free
enterprise, capitalism and liberty consolidate the problems, repair them and
enable a new foundation for following growth periods.
We’ve noticed in studying economic history
since the 1837-1843 depression these downers take progressively longer to
heal and correct themselves. Political, economic,
and civil war made the American time span of 1853 to 1871 a passel
of really nasty years. Thankfully, the Republic survived those times and
began a longer major growth period spurred on by the American Industrial
Revolution. Our problem today in this world of super-fast computers and
“mico-managed competitive economies” is
these buggers cannot allow business and investments to operate without
interference. The worse things get the more they interfere. This is a spiral
of defeat that continues to feed upon itself.
When the very scary Panic of 1907 whacked Wall
Street, it sufficiently frightened the New
York investment and trading community as well as
our folks in the capitol. Their responsive problem solving intentions were
good; as they wanted to “do something.” That is, either eliminate
or, maintain some semblance of control should further panics ensue in the
future. Noble idea but the Federal Reserve solution in 1913 set the
ground-work for our current impending disaster and the destruction of
national fiat currencies throughout the world.
Computers are a wonderful invention for many reasons
but in our view have also been put to some evil uses in the realm of
derivative trading and investments. Those PhD. nerds running sophisticated
math problems and their resultant Long Term Capital disaster proved that the
elegant, human equivalent “art in judgement” as well as
math-science problem solving is mandatory for profitable trading. That
massive error was the simple mistake of excluding human judgement expedited
by failures in Russian bonds. Who would have thunk it?
What’s funnier, two guys designing the failed models got Nobel prizes!
Now, not having learned from that multi-billion
disaster, these dudes were back at it again with all their magnificently
stupid derivatives ideas. The primary difference is that this time they
are not only out of control but have no answers to contain or, stop the
fallout. We used to laugh at the comedian Red Fox when he put hand on heart
feigning a heart attack crying for sympathy saying, “Here I come Elizabeth, this is the
big one.” He was a great comedian with perfect timing. Wish we could
say the same about Chopper Ben, Hank Paulson, Alan Greenspan, and the balance
of that gang.
THIS IS THE BIG ONE AND
IT’S A WHOLE LOT WORSE THAN A SIMPLE
HEART ATTACK. NEXT, WE GET A GLOBAL HEART ATTACK NOT ENDING FOR YEARS-A GRAND
MAL ECONOMIC EXPLOSION!
Unlike Comedian Red Fox We Are in “The Big
One”
The Federal Reserve economic model is totally
dependent upon inducing inflation and growth in a giant pyramid scheme. This
nonsense can only continue as long as promotion of infinite growth in money
supply, bonds, materialistic purchases and free-running credit are permitted
to exist. They can’t continue anymore as the credit is toast. The
credit toaster burned-up and the bread is burnt dollars.
Where the game has gone awry, is the fact credit
dried-up due to lack of trust and confidence by the banks among each other
and by the general public who is watching their massive, fraudulent disaster
unfold. The Hank and Benny team have almost run out of money bullets. Worse,
confidence in their Confidence Game has vanished. When the little professor
said in a speech yesterday in Florida that the bank and mortgage lenders
should give bad housing loans some slack by arbitrarily cutting mortgage
principal, we knew he was grasping at the final straw. We’ve seen lots
of really dumbo moves but this one was off in
never-land-beyond any comprehension. Is this dude promoting a grand bank robbery?
Years ago, we used to pooh-pooh those worrying about
the earth’s limits to support massive population growth. Now that
problem is very real. China
and India
with exploding populations converting to western diets have imposed
inordinate pressures on water, food, air and demand for commodities. The
worst of these problems is of course energy. We are seeing water, grain
(food) and energy stretched to limits where an obvious crisis is imminent. One
analyst predicted a global famine within three years. He might be correct as
wheat prices have skyrocketed and reserves sink almost to zero. To make
matters worse, cyclical drought, not phony global
warming, is now in play. There have been numerous instances of this most
recently in the 1930’s dust bowl years and the early 1950’s when
new heat records were set for 3-4 years in a row. Australia is suffering a 1,000
year drought.
The crude oil shortage is running -3mm barrels a day
and promises to get worse. The obvious supply and demand answer is higher
prices. U.S.
drivers are reducing trips as gas demand in the states is now off -1.1%. Conservation
is implemented with unleaded prices solidly above $3 per gallon and rising.
As inflation worsens and buying power diminishes economic conditions
sink further in a non-spending spiral as commerce slows and finally stops.
For now we have stagflation. This is a stagnant
non-buying, non-productive economy with price inflation. Business is slowing
and prices of necessities are rising. This many months’ sink into the
mud will be followed by ever faster inflation as our Ben-Hank duo print money
faster and throw credit to the bank wolves who only save the cash not spend
it. Hoarding of everything from cash, gold, silver, food, energy, and most of
all valuable hard goods (merchandise) smothers free-flowing spending cash, so
dearly needed to keep the economy in-play; alive and moving.
It’s too late. This economy is terminal
but the Sheeple don’t see it yet. What the Sheeple are seeing is major job losses, no spending
power, nasty energy prices, home values dropping swiftly and no bank credit
to be had anywhere. Mortgage lenders have squeezed terms too tight. This
lending market might as well be closed. Further, consumers do not want to
borrow for fear things fall further (they will) and Mr. Lender would prefer
they not apply for credit.
Housing is toast for years and prices are in a
scary free-fall. Top 2006 house prices will return to 2003 prices. In some
cases; much lower. In the previously hottest housing markets, retail prices
increased +100% from 2003 to 2006. Guess what? Now they go down as much as they
went up. In some cases even lower. One analyst figures 10,000,000 homes are
foreclosed with keys returned to lenders in 2008. In 2009, it gets
even worse.
States, cities, towns, villages and counties go
bankrupt by the thousands. Fire and police will be laid-off or, fired.
Muni-bonds default as there’s no tax income for interest payments. Homeless
people multiply by the millions and food banks and welfare agencies are
overrun with unfilled demands. Crime skyrockets as big city gangs run rampant
without an effective police force. Urban fires will be more common and
utilities are shut-off by the thousands for non-payment.
The federal government will install martial law,
capital controls, and close banks for a spell while the armed forces are
overrun with applicants by those needing food and a bed. Many cities become
uninhabitable due to crime, disease and neglect. Large parts of Detroit have already
returned to the wild with coyotes and other unusual birds and critters living
in burned out homes and huge vacant land parcels where stately homes once
stood. In lieu of valueless dollars, rural people in particular will use
trading and goods barter instead of paper cash. There are two million guns in
the United States
and they are going to be used on criminals, to settle old grudges and the
cops who will not be able to cope.
Those reliving the 20 year’s ago economic
fairy tale will suffer the most. Those with the ability to substantially
reduce their standard of living will do better. Farmers with an independent
existence (Think Amish) will see no changes at all). They are self-serving
independents and need zero help from outsiders. In fact their lives ought to
significantly improve as the “English” as Amish call them get
lost.
Many will give up cars entirely, moving to small
towns or, villages growing gardens and walking to all needs. Bikes, walking,
motorcycles, and horses become the newer method of transportation for many. Several
will grow to like it as health-exercise improves and stress melts away. Lower
expectations shall serve many well. Those unable to adjust or, change
jump-off buildings, go nuts or, cope badly.
Will there be a total departure from our modern way
of life. No, but societies including America will see changes. Energy
conservation becomes a religion and wastefulness of all kinds shall
disappear. Smart people see these things coming and shall quietly and
unobtrusively prepare. Low key is best while flash, dash and rah-rah
materialism turns passé.
Are we overstating this problem? Maybe, but what if
we aren’t? Think about 1921-1922 Germany. Think about post war Germany in
1945-1946 when millions of German citizens starved to death. Think about Argentina, Brazil and other hyperinflative events. Think about Zimbabwe with
thousand’s percent inflation- right now! Watch Asia and Europe tank
first this fall of 2008 with the U.S. falling in late 2009.
We suggest wise precious metals traders with their
friends and families could make the best of this forecast eliminating most of
these getting-by problems before they’re a crisis. You would be amazed
at how little you need for a happy productive life once 95% of the useless
materialistic crap is dumped. I once lived in a 5,600 square foot
home with six bedrooms and four bath rooms and hated it. Now my 1,000 square foot
townhouse is too small but not by much. Simplify your life, make some
excellent gold and silver trades and you’ll smile with satisfaction,
not frown with fear or, portray a “Deer in the Headlights Stare”
like the Hank-Ben duo. Their sleepless worrisome example proves money
isn’t everything. Those guys are scared witless. – Traderrog
By : Roger Wiegand
www.Tradertracks.com
Roger Wiegand is Editor of Trader Tracks
Newsletter and his soon to be opened Daily Tracker for active
gold, silver and energy traders. 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
| 
