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The
bullion dealer's goal is to provide gold and silver bullion investors with market commentary when significant developments warrant updates.
At this point, that will probably be every other month starting
in 2011 since the author has been writing this free ezine for
over a decade now and still has not won the Pulitzer Prize.
November
16, 2010: Instability Creates Another Great
Buying Opportunity in the Precious Metals.
Hate to admit it, but I am growing very weary after over a
decade of writing these missives; I sound like a broken record
except when I come up with new predictions. None of the idiots in
power seem to be reading this excellent material since the U.S. economy and
financial system continue to swirl down the vortex of the
depressionary toilet bowl. Especially not reading these
erudite pages is that very dangerous idiot at the Federal
Reserve, Ben Bernanke, who plows blindly ahead with more and
more money printing even when the results of his previous
Monetarization Schemes were dismal at best, destructive at
worst, and have bloated the world with Dollar Liabilities that
cannot be painlessly withdrawn. WELCOME TO THE UNITED
STATES OF BANANAS.
But we tangible asset investors are getting extremely
well-rewarded for our persistent and progressive purchases of
both Gold and Silver over the last 12 years, aren't we?!!!
Dollar-cost-averaging, a practice thought to only benefit
ill-timed stock investors, is also a wonderful tool in smoothing
out the edges of purchases in the precious metals. None of
us are clairvoyant, although the Sage does unabashedly take
credit for forecasting the Housing Collapse, the Stock Market
Collapse, the Banking System Collapse, the failure of both
Fannie Mae and Freddie Mac, and the never-ending Dollar
Collapse. Actually, a ten-year-old could have made these
calls if he had read only one economic text and one finance text
and applied their historic principles to current events.
Forecasting cataclysmic events accurately is no small feat in
itself, BUT ACTING TO MINIMIZE DAMAGE FROM THEM AND TO ACTUALLY
BENEFIT GREATLY FROM THEM IS A VERY, VERY, VERY BIG FEAT!!!!
THERE IS STILL TIME TO ACT, AMERICA. Sit passively on the
railroad tracks of history if you must, but expect to be crushed
financially if you do not take measures to avoid the speeding
freight train bearing down on you. ( How about that
Municipal Bond market?!!! Told you to avoid months ago! )
As a bullion dealer, I can never get too upset about a pullback
in both Gold and Silver as we are experiencing currently.
Buying of the physical product tends to surge on these rather
exciting corrections, so what degradation my still-growing
Precious Portfolio may experience is more than compensated for by the
incremental revenue to my bullion business. Plus, such
corrections tend to bring the brand-new bullion buyer off the
fence, having suffered mightily at the hands of Wall & Broad or
via the now-vacant landscapes of U.S. real estate.
Repetition is a great teaching tool, and the more American
investors are hammered by traditional investment assets such as
stocks, bonds, zilch-yield savings accounts, and cratering real
estate, the more they get the message:
BUY GOLD AND SILVER
FOR THE LONG HAUL IF YOU WANT TO HAVE ANYTHING LEFT WHEN THE
DUST SETTLES.
CURRENT EVENTS:
We all know that Gold was only around $1170 per ounce back in
late July / early August of this year with Silver launching from
around $18 per ounce during this same period. So there was
some $240 of golden gains burning a hole in many traders'
pockets when the Yellow Dog breached $1,410 last week. On
the Silver side of the ledger, traders were sitting on some $11
per ounce in silvery gains when the Poor Man's Gold came a
whisker within $29 per ounce last week. Don't get wrapped
around the percentage gains here, even though they are most
impressive in themselves, but look at how many dollars in each
metal a 100 ounce position would be enjoying and there is every
reason for some profit-taking in here.
There is no doubt that the 30% increase
in margin requirements for SILVER on the Comex/NYMEX
precipitated the correction, another example of big traders (
big fee payers! ) such as JP Morgan Chase and HSBC getting
preferential treatment from the Exchange to assist in reducing
their market moving short positions in Silver. Margin
requirements are likely to continue to increase as both Gold and
Silver surge into the stratosphere, but reduction of leverage in
a system is a good thing for investors. Wish Bernanke had
gotten that message years ago!!! But the jig is up for
these two silver manipulators, more on that unfolding event
later.
IT IS ONLY A TEMPORARY PHENOMENON DUE TO AN OVERLY LIQUID SYSTEM
ON LEVERAGED STEROIDS PUMPED BY ZERO COST MONEY THAT THE
PRECIOUS METALS HAVE A POSITIVE CORRELATION TO THE STOCK
MARKET'S ACTIVITY. Throughout modern history, that
correlation has been negative and down stock days, of many to
come, will be accompanied by up bullion days of many, many more
to come. The fundamentals eventually rule, you can take
that to the bank .................................... if it is
still solvent!!! I think that expression is going to go
the way of the DooDoo Bird.
HOWEVER, since I have watched the metals more than most over the
last 30 years, I will venture to say that we are more at the interim
bottom in each metal at this point than only half way through
the correction as some expound. If I am wrong, then you
get a full refund on this newsletter in Chinese Yuan.
Commodities correct very fast and then often go into a
consolidation period that allows new entrants to feel more
comfortable in taking a new position. So if a 50%
retrenchment is naturally expected after say a 20% advance in
Gold, then the $1,280 area is that target. Similarly
simplistic reasoning provides that a 50% retrenchment of a 60%
advance in silver takes us to the $23.50 area as we lop $5.50
per ounce off of the interim high of $29 per ounce.
HOWEVER, AS TO SILVER, I DO NOT THINK WE WILL EVEN COME CLOSE TO
THAT ARBITRARY NUMBER. While Gold is within $55 or 4% of
the $1,280 number at $1335 currently, a gap it can close in a matter of one or two
days, IF IT IS TO GET THERE AT ALL, silver has some
behind-the-scenes support that it did not have several weeks
ago. And these people are surprisingly not Chinese!
The long-awaited RICO Class-Action Lawsuits against JP Morgan
and HSBC have introduced a new dynamic to the silver market:
It will become a more level playing field for small investors
with time AND WE WILL SEE MUCH HIGHER PRICES SOONER RATHER THAN
LATER. Meaning that the humongous short positions nurtured
by these well-connected market manipulators will be increasingly
under regulatory and judicial scrutiny AND THEY WILL HAVE TO BE
REDUCED GREATLY TO AVOID FURTHER DETECTION, PROSECUTION, AND
EVENTUAL RESTITUTION. Now we know that Wall Street
partisans don't
play fair unless chained to a post with a shotgun taped to their
heads, so one would expect them to hire shills to do their
bidding that attempt to mask their true identities in silver trading.
But I also expect that the now-awakened and chastised
governmental authorities know how this shell-company game is played and will
be finally ever-watchful of it; electronic or not, there is
always a paper trail to catch the bad guys. Just ask Al
Capone. Unless they physically carry dump trucks full of
rotting cash to their shills ( and the Sage will pick that up via
satellite just before the Predator missile is launched ), there will be a prosecutable trail of moola.
Bad guys like Madoff always think they are smarter than the
opposition JUST BEFORE THEY ARE FITTED FOR THE ORANGE JUMPSUIT.
This means that these two parasitic organizations will have to
be huge buyers of Silver at some point to get their humongous
short positions down to a more market and legal-settlement
friendly level. The Sage feels that we are very close to
that point today with Silver at $25.50 per ounce. What
about the other $2 that would take us to the "bottom" target
that everyone and his uncle would be looking for?? Likely
to be negated by incremental buying by these two vampires to
take instant advantage of the less painful, lower prices right
in front of their warted noses. The unrealized losses on
the books of JP Morgan and HSBC must be capable of singularly
making them insolvent, so all efforts will be made to reduce
these positions in the immediate days and weeks and months
ahead. Me thinks that the days of hiding losses under the
Persian rugs on Wall Street are coming to an end ( on that note,
I expect Wells Fargo to cough up a giant hairball any day now!!!
).
A NEW
SHERIFF IS IN TOWN, AND IT IS AN ANGRY AMERICAN PUBLIC THAT IS
GOING TO INSTITUTE "CHANGE" THAT IT ALONE CAN COUNT ON.
You can pick our pockets only so long before we cut off your
hand.
There are many "good-guy" buyers of Gold and Silver out there
that will rise to the occasion as well, not at all motivated
solely to stay out of jail. I think we have turned a
corner in this country with the November 2nd elections. We
are going to throw most of the bums out over the next 4 to 6
years, and if any newly elected official decides to attempt to
resurrect the old ways in Washington, he or she will
unceremoniously be thrown out the next time around.
WE
CANNOT AFFORD TO DO OTHERWISE IN THIS COUNTRY, WE ARE BROKE.
I can hear some of the chuckles out there that this is just
another ranting of the imbalanced Sage, but mark this down as another
one of my laser-guided forecasts. We are going to see
"change" in this country that does not make us throw up.
So if you need to sell some estate jewelry or second homes or
stocks or bonds or cash to have liquidity to buy Gold and
Silver, BY ALL MEANS, DO SO. These parabolic moves are
going to be more the norm than the exception. And remember
that the interim low can be hit while you are going to the
restroom at the office or brushing your teeth at home.
Start buying at these levels, because the Sage's forecasts of
$3,500 Gold and $130 Silver are more possible today than even
six months ago. I will possibly be dedicating the
hearthstone in my upcoming house in Norway to Ben Bernanke, he and
Greenspan will have done more than anyone else to make my
financial dreams come true.
ONE FINAL NOTE TO THE
TROOPS: WE NEED TO REIN IN THE ROLE OF
THE U.S. FEDERAL RESERVE, PERIOD. Ben Bernanke's
zero-interest rate policies are pushing America's Senior
Citizens into risky assets much to the detriment of their
financial well-being. And the buying of Treasuries to bail
out Washington to put on the books of the secretive, despotic
Fed has got to end and now. Please put that item on
your legislative dockets, oh fellow citizens of the Land.
Wearily, The Sage of Wexford,
locked and loaded with Gold in one hand and Silver in the other.
BACK TO TOP
December
18, 2010: OUT WITH THE OLD, IN WITH MORE OF THE SAME.
I am putting the writing of this ezine on a time clock, 1.5
hours is all I will expend this morning, since I have little new
to expound upon this merry, merry season. I want to take
this opportunity to thank Congress for working on a Saturday
today since they have done little all year to set the nation on
the right track. The Reed Dream Act and
Don't-Ask-Don't-Tell are oh so important to the fiscal solvency
of the nation that they absolutely must be passed before the
House turns Republican in January. Where do these guys
come up with this stuff???!!! Having been the only
non-minority student in the Financial Aid line every term at
Michigan to obtain my engineering scholarship payment, I must
admit that I was the most poorly dressed in the queue.
Army field jacket and worn corduroys in a spectacle of leather hats,
leather coats, and yes, even leather pants. I always
pondered how these "disadvantaged" students could afford such
splendid threads and still need 100% support from the University
and its donors. Now, I am jumping with glee that the
children of alien adults who have entered and stayed in our
country ILLEGALLY will be rewarded with taxpayer subsidized
State Tuition when many LEGAL residents' children across the
land with go without the same benefit.
The message is all
too clear: DO THE RIGHT THING IN AMERICA, AND YOU WILL PAY
FOR THE BENEFITS OF THOSE THAT DO NOT DO THE RIGHT THING.
Is this a great country or what??? I will not even give
the open gays in the military question the time of day since my
late father served both proudly and valiantly in the U.S. Army
for 30 years and I know where he stood on this issue. I
wonder as a Navy man when was the last time that the Chairman of the Joint Chiefs
of Staff was actually in mortal combat?? This is where the
issue will blow up in Congress' face, they are all so attuned to
life in the field in the U.S. military today.
We only have to turn to the renewed turmoil in Euroland debt
markets to realize that the Sovereign Debt Crisis is here to
stay and will become an even bigger funding problem for the many
insolvent countries within the European Union. Greece,
Ireland, Portugal, Spain, Italy, and even France are likely to
have a very rough time of selling their seemingly endless debt
going into 2011. The Euro is effectively a failed currency
of a failed state, and the individual insolvent members are akin
to the growing cadre of insolvent States in the once United
States. The debt rating agencies, as compromised as they
are via conflicts of interest, have steadily been downgrading
some of these Euro-Losers and Moody's has now once again
threatened to downgrade U.S. Debt from the investment grade
status it so improperly holds. The Debt Collapse is now
entering a Second More-Deadly Phase where nations, states,
counties, and municipalities are coming under the scope of the
resurrected bond vigilantes for their inabilities to meet
payment obligations.
Poor Bennie Boy Bernanke!!!
That $600 to $900 Billion of freshly printed money under QE Lite
and QE2 is burning a hole in his autocratic pocket, but the
mortgage pricing
end of the bond market is slicing and dicing bond prices as
global investors
attempt to obtain reflective yields THAT EVEN BEGIN TO
COMPENSATE FOR THE DEFAULT RISK IN MUNICIPAL, STATE, AND
NATIONAL DEBT TODAY. Some very big sovereign defaults are
just over the horizon in the New Year.
As the
Treasury Yield Curve steepens further and further as you go out
the maturity curve, IT IS A FRICKING VOTE OF NO CONFIDENCE FOR
THE POLICIES OF THE BERNANKE FEDERAL RESERVE. Holding
short-term rates to Zero to INFINITY AND BEYOND does little for
intermediate and long-term borrowers in an environment of
heightened INFLATION EXPECTATIONS. ECON 101, BENNIE BOY.
Just another sad example of Big Brother Knows Best blowing up in
the bureaucrats faces!! And did you hear that the Bond
King, Bill Gross of PIMCO fame is now exiting some bonds to buy
...................... death march tune, please
....................... STOCKS??!! Yikes, the "World
Turned Upside Down" at Britain's Yorktown, VA surrender to the
tattered and soiled gaggles of American colonists should be played
before the opening bell of the NY Stock Exchange. If this is
not a death knell for bonds, I don't know what is!!! And
after stocks have appreciated some 86% since the March, 2009
interim lows, I KNOW THAT I WANT SOME OF THAT ACTION IN A DEPRESSIONARY
ECONOMY WITH RISING INTEREST RATES AND COMPRESSING PROFIT
MARGINS!!! If the S&P has not
been putting in a rounding top since April of this year, I will
run down to Capitol Hill and cast my Yes Vote for all of the
garbage legislation on the docket in the Senate today!!!
By all means stay in stocks up to your eyeballs going into 2011.
And buy more bonds with the left hand.
Just don't ask me
to support you in retirement with higher and higher taxes
because I will be speaking Norwegian by then.
Premiums at wholesale for most precious metals products are
steadily increasing right now. This sometimes occurs at
year-end as refineries and mints switch over production to the
upcoming year's mintages, but a noticeable shortage is beginning
to develop in both Gold and Silver bullion products. For
example, South
African Krugerrand gold coins are almost impossible to obtain Stateside
these days. Days-to-Shipment have not increased
much, by one day to a few days, not weeks, but the rising costs
of shipping, insurance, and production are seeping into more
wholesale premium increases. If you think there is no
inflation in the U.S. right now, operate a bullion refinery or
mint or a bullion distribution center!! Energy prices
alone with spot crude over the $80 per barrel mark have an
effect on bullion production & distribution costs and, hence, final product
pricing. I told all of my clients and readers some 8 years
ago that this was going to happen, and .......... pass the
Yuletide contribution cup, please ............ another Sage Prediction
comes true. And don't forget that ObamaCare affects
bullion employees' healthcare insurance costs also, and they are
going through the roof!
BOTTOM LINE: DON'T GET TOO
FANCY WITH YOUR MARKET TIMING OF ENTRY POINTS FOR NEW OR
ADDITIONAL BULLION PURCHASES IN HERE. Clients ask me
almost hourly where the metals are going in the next 10 minutes
and I have the same answer: "If I knew with any certainty,
I would not have to answer the phone anymore". The real
answer: "BOTH GOLD AND SILVER ARE GOING MUCH, MUCH HIGHER
WITHIN THE NEXT DECADE (how is that for a laser-guided time
horizon?) AS
THE WHEELS FALL OFF THE GLOBAL ECONOMIC AND FINANCIAL SYSTEM
CART".
That I do know with certainty. The Sage is still on target
for $3,500 Gold and $130 Silver so buy today before we see 7%
delivered premiums in Gold products across the board and 9%
delivered premiums in Silver products outside of sovereign mint
coins which are already pushing 10%. It has been my personal philosophy since 1997 to
follow the Sage Axiom (SA): WHEN YOU
GOT THE DOUGH,
GO!
And money sitting in stocks
and bonds, I don't care where they hail from, China included, is
money waiting for an accident to happen. I read about empty
cities in China this week, and if that is not a real estate
bubble, show me what is! If Japan can have two decades of
depression after a real estate, stock, and debt collapse, so can
the United States of Bananas.
ONE HOUR EXPENDED PRO BONO, AM HEADING TO
THE FINISH LINE.
Watch Silver burst through $30 and head toward $35 per
ounce before the First Quarter of 2011 is over next year. Can you
feel the earth starting to tremble beneath your feet??
Something a'big is a'coming. The Prez, Repubs, and Demos
just passed another defacto Fiscal Stimulus Bill to the tune of
some $857 Billion this week to get the Bush Tax Cuts extended
and a break on the Estate Tax. WHERE THE HELL IS THE
FISCAL DISCIPLINE THAT THE VOTERS CLAMORED FOR IN NOVEMBER?????
Oh, and Scott Brown from Massachusetts: You is going to be
thrown out in the next election, oh Liberal in conservative
clothing! These guys ever hear of spending cuts to pay for more
spending??? The U.S. fiscal situation is totally out of
control. We are bankrupt, fiscal & economic toast, and there is no avoiding
a depression at this point. So even as Bernanke puts on
his ink-smeared printer's hat one more time, the humongous, non-stop
spending by most levels of U.S. Government is making it
impossible for him to keep up. Like the Disney Sorcerer's
Apprentice who lost control of the animated brooms and buckets
until the chamber floated away in a sea of newly created water.
To think that another $Trillion of government spending in 2011
and 2012 will get the nation back on course economically is to
ignore the lessons of the last 3 years. More, more, more
Government Debt is not the answer. But that is where we
are once again headed with wild abandon.
Higher interest
rates, higher inflation, lower stock and bond prices, and higher
bullion prices will be the result. The Sage has spoken.
Try to keep from nodding off out there,
I myself just got some coffee:
Sage prediction for
Gold's high in 2010 (made in December, 2009) of $1,495 and for Silver's 2010 high of $29.65
are so prescient that I may run for President of Nova Scotia in
2012. How about a $1421 Gold high on 12/7/10 and a $30.50
Silver high on 11/9/10, London PM fixes all!!! Not
beginner's luck my fans, but a dart board with laser-guided
darts honed from 35 years of experience. So I still need
$74 in Golden Gains (WikiLeaks Bank of America memo shows
officers laughing at Paulson and Bernanke for feathering their
opulent nest! or BofA moving money offshore as bail-out money is
received!!) and have exceeded my Silver Gains by $0.85 per ounce
or 2.9%. Silver is just getting started on this current
run. If you are expecting big pullbacks in here for either
shiny metal, try your luck as well on the Shanghai Stock
Exchange. I kind of giggle when analysts get all bubbly
about investing in China; what is the Chinese word for bubble?
In Czech, it is bublin.
If you are considering vault storage of your gold and silver to
spare your back, having a stolen handgun stuck in your face at
home by a Dream Act Alien (DAA!), or are tired of the spouse
yelling at you to put that heavy stuff elsewhere, I have access
(without compensation) to a new facility just opened in Fargo,
North Dakota. Having been dealing with the principals of
this operation for several years now without a hitch, and we are
talking $Millions in business, I can attest to their being totally trustworthy and with very
competitive storage and insurance costs. Insurance is
provided by none other than Lloyd's of London. Give me a call at
877-855-9760 and I will put you in touch with them AFTER I SELL
YOU $100,000 IN BULLION. Actually, no charge whatsoever
for the referral. Always good to have storage outside of
the nuclear strike zone of the East Coast with a new despot
being installed in North Korea!!
SO WISHING YOU ALL A VERY MERRY CHRISTMAS
( I am a Christian, I confess ) AND A HAPPY NEW YEAR IN
TUMULTUOUS 2011.
GODSPEED FOR A SAFE RETURN FOR ALL OF OUR BRAVE SERVICEMEN AND
SERVICEWOMEN OVERSEAS AND STATESIDE. Although our
Commander in Chief has never worn any uniform in his life, even
on the basketball court, we are confident in the abilities of
our military commanders in the field. We can only hope to establish
conditions so that oppressed peoples can be free to live without
fear and deprevation, we cannot
guarantee their freedom over time, only they themselves can do
that.
THE SAGE OF WEXFORD, very glad to
have been 97% out of financial assets since 2000.
P.S.
S&P 500 up a whopping 11.6% to date in 2011 (real gain of 4.6%
after 7% real-world inflation!), while Gold has gained 24.8% as
of 12/17/10 and Silver has smoked equities with a 71.9% ytd
gain! Still want to be in financials for the next
decade???
TIME LIMIT EXCEEDED BY 50 MINUTES,
PLEASE SEND COOKIES AND MILK.
BACK TO TOP
February 9, 2011:
The Black Swans Are Circling The Global Lake.
There is a kind of chill in the air that is not the fault of
Mother Nature. It is a kind of foreboding cloud over the
world that will just not disperse with all of the feel-good talk
and newly printed money coming out of world capitals. It
is partly intuitive and partly experience-driven, but "A Bad
Thing Cometh" feeling permeates the air.
I know that I get all bubbly inside when I think of the Federal
Government spending additional Billions of Federal Dollars to further bail out the
States. When such irresponsible stewards of the peoples'
purse such as California, Illinois, Michigan, New York, Nevada,
etc. start crying to Uncle Sam that they just must have more
Federal Dollars in order to meet expenses, I know that I want to
write a separate StateAid check when I mail in my quarterly tax
payments to Washington. Of course, Uncle Sam
does not have the dough, he just prints it up through the
Treasury and the Federal Reserve, but let's not get mired in the
details here.
As Make-Jimmy-Carter-Look-Good Obama must think, it is all free
money that will never have to be repaid, right?!!! At
least not on his watch. I just
love the couple of $Billion that the Prez has come up with as far
as spending cuts. And now he will bail out irresponsible
legislators at the Federal and State levels that have provided
Unemployment Benefits to millions of Americans up to an
unprecedented stipend of TWO FRICKING YEARS!! The Welfare
State is clearly here. And if Michelle Obama would have
her way with controlling what we eat, inside and outside of the
home, then we got the Nanny State! And now small
businesses will be saddled with Obama's proposal to increase the
Unemployment Tax starting in 2014 in order to pay for his
administration's current vote-bribing generosity. Don't you just
love those who are so generous with your money that generations
to come will struggle to pay back. Didn't the Anointed One
promise not to raise taxes only a couple of weeks ago.
Who's on first?
The U.S. Dollar has now sunk to critical support levels headed
toward
75 on the Index, ready to break multi-year lows on its way to
Eventual Worthlessness. Thanks, Bennie Boy Bernanke, YOU THE
MAN. One always realizes that most Western Developed
Country currencies are severely compromised since the individual
sovereign states have found every means possible to kick the can
down the road regarding fiscal retrenchment and debt reduction.
The Bernanke Money Printing Strategy ( known as BMPS ) to save
the world has definitely caught on around the world, and the
countries guilty of this genre of Monetary Suicide will pay the
eventual piper of higher inflation, lower standards of living,
higher interest rates, fewer government services, and sovereign currency devaluation.
Of course, a basket of global currencies by definition can't
devalue against all other currencies at the same time, so it is
the ultimate guardian of sovereign solvency, GOLD, that all of
these compromised currencies will depreciate against. And
since 2000, that is exactly what has been happening. But
the Dollar is surely going to get whopped in 2011 as we set new
world records on spending another $1.5 Trillion in Fiscal 2011,
so that Obama can maintain his to-date record of adding 10% per
annum to the National Debt since he was sworn in two years ago.
What a guy. Maybe we can clone him and send him to Iran to
run for office.
Note also what Bernanke's
announcement of QEII in the Fall of 2010 did for the Currency of
the Realm, whacked it along with bond prices, yippee eye yea.
The best and the brightest at the highest offices of the land.
Are we a lucky generation or what?!
So as the United States plods merrily and cluelessly along the
Road to Financial Ruin, the world does not stand still and just
watch. Since our leaders don't have a clue what the real
problems of the nation are, they obviously don't have a clue how
to solve them. If they by chance did have a Revelation and
did recognize the disasters headed our way, NOT SURE MANY OF THEM
WOULD HAVE THE SMARTS OR THE POLITICAL COURAGE TO SOLVE SAME. But the slaughter in the Treasury and
Municipal Bond arenas is attempting to give them a clue, a very
big fat clue. Hang on to your seats. The Black Swans
are circling the Global Lake.
Now for those of you lucky readers that are provided the
opportunity and privilege of reading this erudite epistle when the Sage is in
the mood to pound it out on his worn keyboard, what is coming is
technically not a Black Swan event to any of you. It is
not unexpected and coming out of nowhere, because the trusty
Sage has been warning about such potential events for the last 5
years, if not 10 years. But we will continue to utilize
that imagery, since it is rather ominous symbolism and
increasingly popular in the
financial press right now. And as graceful as these
literary birds are in flight, they are not so entertaining when
they land on your head.
Now I have taken out a non-collateralized loan from none other
than JP
Morgan-Chase, think it was unused 2010 bonus money from TARP, to
short the socks out of the teetering Stock Market; I took $5
Million, they offered $10 Million, and I am just waiting for the
inevitable Stock Market Crash, Number 3 in the New Millennium.
Now say after me: "No revenue growth, no true,
non-cost-reduction earnings growth". And if you believe in
the accuracy of Wall Street reported corporate earnings,
especially U.S. banks and insurers, then Congress will produce a
Balanced Budget in 2011, ha, ha, ha. They had the unique
NO BUDGET last year, but they will make an attempt at budgeting
this year, even though all of us sober ones know it is just like
Wall Street smoke-and-mirrors.
Double dip recession in
progress as the Greater Depression, Phase II, takes hold.
Housing and commercial real estate are leading the way, with
retail sales right behind them and bank failures and bank
write-off bringing up the rear where they belong. You can
only keep $4 Trillion of Ten-Cents-On-The-Dollar Derivatives on
the books so long before they start stinking up the place.
Just ask Depression Suffering Japan: Billions still on the
books of the nation's banks that went bad as early as 1990 and
1991. No recovery until the garbage gets flushed down the
sewer. To think otherwise is delusional.
With food and energy prices headed for their own moon landings,
Americans are being hit from all sides. Start thinking
about $5 gasoline when you crank up that 5,000 pound monster you
have taking up most of the driveway or garage!! I truly expect food
shortages as we enter Fall since Mother Nature has not been kind
regarding heat and drought for several years now; if she doesn't
bake us, she drowns us in flooding rains. Higher fees at
the Local level, and higher taxes of all forms at the State and
Federal levels are inevitable since these spending drunks can't
push themselves away from the bar. Just one more drink
they cry as they stumble forth, full of the promise of reform.
THEY ARE REALLY MORE FULL OF YOU KNOW WHAT. Not only are Americans
still deathly fearful of losing their current jobs, but
$Trillions in Stimulus have basically gone down the drain with
little or no net job creation to show for it. If I hear
one more mention of Green Industry from this
business-experience-challenged President, I am going to puke!
Yeah, let's use energy technology that is 3 to 4 times more
expensive than fossil fuel to acquire and operate DURING A
FRICKING DEPRESSION. Oh, since Uncle Sam will subsidize
these still struggling technologies, I guess that makes Green
Energy economically viable??? This removal from economic
reality is another reason that even hints of additional Billions for more
stimulus are being shot dead on arrival, not to mention the
effect more Money Throwing will have on the Fiscal Solvency of
the nation. More and more Americans are getting
discouraged and just dropping out of the labor force; this is
the weakest so-called economic "recovery" in modern times when
it comes to net job creation after the official end of recession
of June, 2009, over 18 months ago!
Now, like anyone addicted to spending, consumers will have that
one last drink before trying again to go on the wagon, and that
is what Holiday Spending, 2010 was all about. You can't
expect Americans to do without the latest gizmo or gadget when
their neighbor or co-worker has one, do you???!!! Plus,
addictions are very hard to conquer. Save little, spend
more ..... the rallying cry for retail and home sales over the
last decade. This mentality has lead to the demise of a
once great people and nation. Silas Marner is rolling over
in his grave.
So, getting off my soapbox, at least for a minute, where are
Gold and Silver heading at this very nanosecond??? I may
be going out on an icy limb here, BUT THE BOTTOM IS IN FOR THE
PRECIOUS METALS. There are just too many Dollars and Yen
and Euros and Yuan and Francs decaying in people's pockets
around the world for demand for Gold and Silver to do anything
but head higher and higher. Corrections to date have been
adequate to wash out the weak hands, get the shorts to cover,
and wet the appetites of new investors to take the plunge.
Retirement plan conversions to Precious Metal IRA's will set a
new record in 2011, especially with stocks and bonds giving
investors a redux of Deja Vue. Remember you heard it here
first.
Without getting into moving
averages and all that techno-hocus-pocus that everyone and his
uncle are looking at, the consolidation that
we have had since early November for Gold and early December,
2010 for Silver has most likely run its course. I watch
prices constantly throughout the day until my eyeballs hurt, and
I can get a good sense as to when price pressures are building
to the upside. WE ARE THERE IN THE PRECIOUS METALS.
Now it may not be a Black Swan or Two that ignites the rocket
know as PM, but there are no lack of fuses out there to send
both Gold and Silver on another spurt. Correct me if I am
wrong, but there has never been a time in the history of the
world when the affairs of man were so totally out of whack.
Maybe during the Middle Ages during the plagues, but we is in
deep doo-doo economically and financially on a scale that is
unprecedented. Oh, I am such the fear-monger you say just
to push my bullion sales?! Au Contraire, mon ami. I
have been right for the last 10 years and am likely to be right
for the next decade since I parked my rose-colored glasses back
in 1997 and started personally getting out of financial assets
and started buying gold.
A NEW REGIONAL CURRENCY IS WELL UNDERWAY AND IT WILL INCLUDE
BOTH GOLD AND SILVER. As I predicted that the housing market would
eventually implode as early as 2004 on these very pages, I am
making another Sage Prediction here and now. And to think
that you are now a part of history in the making by coming to
this electronic page! WHEN YOU GOT THE DOUGH, GO.
Timers usually get lost in the dust when the precious metals get
a head of steam as they are building now. And Black Swans
are likely to poop on you before they land.
THE SAGE OF WEXFORD,
telling the painful truth for
over 11 years now.
(Wasn't this worth waiting 60 days for??!!!)
BACK TO TOP
April 6, 2011:
The Can Being Kicked Down The Road Has Nitroglycerin In It!!!
I have really come to despise American politics at this
junction, but these Bozo's in Washington, including the Chief
Bozo Obama, are ruining the Nation and making precious metals
investors quite wealthy at the same time. So I should love
these Something For Everyone miscreants right? Wrong.
I still have to live in this shell of a country when these
Re-election Only Motivated Charlatans have spent the last
American dime that will never be paid back for even 5
generations to come. Expect a lower standard of living
with fewer services from all levels of government AND A MUCH
HIGHER COST OF LIVING, higher taxes on those of us who have done
the right thing for the last 30 years, and more civil unrest in
every fricking burgh in the land. Not exactly a set of
circumstances to look forward to as one heads toward retirement,
but the Mess is going to get MessyER before it gets better.
I have come up with an analogy as to the kind of politicians we
need going forward that comes right out of Osama Bin Laden's
playbook. I am not minimizing the barbarianism of
terrorists when I make this analogy; it just seems to fit the
time and place. WE NEED POLITICAL SUICIDE BOMBER
POLITICIANS GOING FORWARD. These will be men and women who
have not spent the majority of their adult lives as either
Public Trough Feeders, Academics or Lawyers AND ACTUALLY KNOW
HOW TO BALANCE A CHECKBOOK. They will come from that
much-despised business sector and HAVE A CLUE HOW AN ECONOMY
WORKS AND HOW EXCESSIVE DEBT WILL KILL ONE IN A HEARTBEAT.
THEY WILL CARE MORE FOR DOING WHAT
IS RIGHT FOR THEIR COUNTRY AND ITS CITIZENS THAN FRICKING BEING
RE-ELECTED ON THE NEXT GO-AROUND OR SERVING THEIR SPECIAL
INTERESTS MASTERS.
Let me repeat that sentence
one more time: THEY
WILL CARE MORE FOR DOING WHAT IS RIGHT FOR THEIR COUNTRY AND ITS
CITIZENS THAN FRICKING BEING RE-ELECTED ON THE NEXT GO-AROUND OR
SERVING THEIR SPECIAL INTERESTS MASTERS.
The economic pain that they will inflict on their electorates
will not be inconsequential, BUT THEY WILL BE DOING THE RIGHT
THINGS FOR THE EVENTUAL SURVIVAL AND RECOVERY OF THE COUNTRY.
Please make note of the fact that Japan has been in a
depression since around 1990 with the bad assets still on the
books of Japanese banks from their extreme speculations in
stocks and real estate from the Roaring '80's. We are in
similar shape today within our own financial and economic
systems, albeit with a still-crippling 90% Federal Debt to GDP ratio versus
a 200% ratio for Japan. However, our Total Debt, not just
Federal Debt, to GDP ratio of 370% wells exceeds the Great
Depression peak of 300%. How will we fare should a
Category 8.3 earthquake hit the West Coast? Where would
California or the U.S. get the dough to rebuild?? Sell
more Treasury bonds into a market where the U.S. Federal Reserve
is the primary buyer today at 70% of issuance??? There is
no margin of error to deal with Black Swan events in either
Japan or the United States. Unfortunately, Japan will take
another 20 years to recover from the triple disasters it has
just experienced.
THE UNITED STATES HAS
A BROKEN POLITICAL SYSTEM FRAUGHT WITH VOTE-BUYING PANDERING, A
BROKEN ECONOMIC SYSTEM OVER-WEIGHTED ON CONSUMPTION, AND A
BROKEN FINANCIAL SYSTEM WITH BANKS LADEN WITH GARBAGE "ASSETS"
STILL DESTINED TO FAIL THAT ONLY DEBT REPUDIATION, RESOLUTION,
AND RETRACEMENT CAN BEGIN TO CURE. IT WILL TAKE SEVERAL
DECADES TO GET THIS ONCE GREAT NATION BACK ON ITS FEET, BUT WE
ARE UP TO THE TASK AS A PEOPLE. ( Since I
will be pushing up daisies long before the final results are in,
this is my pep talk to those non-gray-haired Americans out there
to save the country from Third World Status! )
Since Americans are used to The Good Life with minor obstacles
to their abilities to enjoy a high standard of living, they will
reward many of these true patriots with removal from office.
But the November, 2010 results were just a microcosm of what is
to come in America. We the people will keep throwing the
bums out until we get a set of "bums" we can live with.
The Spoiled Brat Americana has turned its head each time the
tablespoon of medicine was put in its face, but the Political
Suicide Bomber Politicians gathering support from the adults in
the crowd are going to force the bitter medicine down our
collective throats. AND WE WILL THANK THEM IN THE END ( if
we live that long!! )!!! AND IF THE P.S.B. POLITICIANS
DON'T SUCCEED, THE BOND VIGILANTES AND THE REST OF THE WORLD
WILL PUT US IN OUR PROPER PLACE MANY RUNGS DOWN THE LADDER OF
WEALTH AND INFLUENCE.
Election Day 2012 will see America firmly in the grasp of a
Double-Dip Recession headed for the Greater Depression.
The political catchphrase: "IT'S THE ECONOMY STUPID" will
be dusted off and used with even greater relevance.
Monkeying around with the CPI and the Unemployment Rate will no
longer work to pull the wool over the electorates' collective
eyes. The official Unemployment Rate has only gone down
due to a shrinkage in the total workforce still looking for a
job, certainly not the result of job creation from Federal
Stimuli packages akin to throwing money at a wall and seeking if
it sticks. The money has not stuck.
The Sheeple will
be too much in pain at the pump, at the grocery store, at the
Tax Window, at the pharmacy and doctor's office, at the
UnEmployment Line, and at the Utility Bill window to be other
than Mad As Hell. Ben Bernanke has already shot the last
arrow in his Monetary Quiver. Whether we have QE3 or not
is irrelevant. The point of no return was passed many
moons ago, and this Princeton Academic who never ran even a
candy store has run out of goodies. No place to go with
miniscule interest rates that have been killing the incomes of
senior citizens and conservative investors for over 15 years
now. Getting an economy back on its feet with lower
interest rates just will not work at these Lilliputian levels
with a banking sector unwilling to lend due to a severely
compromised balance sheet and consumers either unwilling or
unable to borrow. Shuffling the categorization of "assets"
on the Fed's Balance Sheet will no longer serve to confuse and
placate both domestic and foreign Treasury investors. The
amount of bad assets that the Fed would have to attempt to
monetarize is readily over $6 Trillion and the inflationary
effects of U.S. money printing has literally got the rest of the
world up in arms. Not to mention a domestic populace that
sounds like a hornets nest about to explode with stinging votes
and protests.
THE PROVERBIAL JIG IS UP FOR THE FREE SPENDING AMERICA WE HAVE
SEEN DRIVE OVER A FISCAL CLIFF IN THE LAST DECADE. Kick
the can down the road if you must, Washington, to TEMPORARILY
save your own sorry arses. BUT THAT CAN IS FILLED WITH
NITROGLYCERINE AND WILL BLOW UP IN YOUR FACES AS WELL AS THE
AMERICAN PEOPLES' FACES.
What is going on in Wisconsin is just the introduction to civil
unrest and civil disobedience when the Public Trough is pulled
away from any who have been feeding at it for any period of
time. The Public Sector in America has gotten way out of
control as to breadth and scope, not to mention the cost of
supporting it with now-too-expensive pensions and healthcare
benefits in addition to out-sized total compensation packages.
If teachers in America actually gave homework to their students
in every subject every night like I had in middle school and
high school and worked 12 months out of the year, instead of
maybe 9, I would shed a tear for them. BUT THEY ARE JUST
ANOTHER CLASS OF AMERICAN ENTITLEMENT RECIPIENTS THAT HAVE A
SOCIAL TSUNAMI OF THEIR OWN COMING THEIR WAY. Always
remember that those of us who pay the tab for the Public Sector
pull 3 to 4 times as many levers in the voting booth on each and
every Election Day.
THE AMERICAN AGE OF
ENTITLEMENT IS OVER.
Uncle Sam will no longer be able to give you lots of freebies
from Cradle to Grave since he is now standing with his pockets
turned inside out. The Bond Vigilantes only went into
hibernation for the last dozen or so years. They will make
sure that Uncle Sam pays a rate on his borrowings that is more
commensurate with his sinking Credit Rating AND ABILITY TO
REPAY. The interest tab on the Nation Debt eventually will
eat so much of the Federal Budget that default in a more obvious
manner than Bernanke's Dollar Devaluation Strategy will be
apparent to all with a pulse. Foreign investors are
already shying away from U.S. Treasuries partly because they pay
a yield some 500 Basis Points or 5 Percentage Points below the
true rate of U.S. inflation today AND partly because they
are up to Bernanke's Dollar Devaluation tricks via Banana
Republic money printing to attempt to keep the Federal Reserve
Ponzi Scheme afloat.
That was going to be the title of this epistle,
THE AMERICAN AGE OF
ENTITLEMENT IS OVER,
but I thought the vision of
everything eventually blowing up as we know it due to the
continual expansion of debt since October, 2008 was a much more
riveting image. Debt contraction by the citizenry has more
than been countered by debt explosion at the Governmental and
Corporate levels; total non-financial debt still hangs at Fall
2008 levels, where is the deflation in that category???
GOLD and SILVER prices reflect the dire conditions that the
world and the U.S. are already within. Currency debasement
has been seen as a tool of preference for bankrupt countries
since the Dawn of Time, and global investors are increasingly
coming to the REVELATION that maintaining all of their wealth
via paper currencies and their surrogates such as stocks and
bonds is a recipe for degradation and impoverishment.
I have to chuckle somewhat with investors' hesitancy to buy the
precious metals at $1460 Gold and $39.50 Silver. They
alternately don't seem perturbed to buy stocks at the S&P 500's
level of 1340, but they freeze in the headlights at today's
precious metals prices. They are waiting for a correction
to buy since they sorely missed $250 Gold and $5 Silver, but
what if say Silver goes to $51.50 before any pullback AND IT
ONLY CORRECTS BACK TO $42 BEFORE HEADING HIGHER AGAIN.
Timing is an exercise in futility. Write that on your
foreheads and you will prosper as a precious metals investor (
or any asset investor for that matter ). Think you are
smarter than the market and you will be left in the dust as many
newbies are going to be as my fingers pound the keyboard.
Let's do the math here: If the Sage is correct, and moi
has been so for some 15 years now, then Gold will eventually hit
$3,500 and Silver soar to $135 per ounce. IS THAT ENOUGH
OF A REASON TO BUY EITHER METAL???!!! I think that is much
more upside potential than stocks or bonds or real estate or
currencies, whatever. At a minimum, you will retain your
purchasing power with each decaying Dollar converted to Gold
and/or Silver.
HOW HAS YOUR
INVESTMENT PORTFOLIO DONE OVER THE LAST 10 YEARS???!!!
THESE ARE HARDLY
NORMAL TIMES IN MOST ASSET MARKETS. DO NOT EXPECT SAFE
HAVEN ASSETS AND TRUE STORES OF WEALTH SUCH AS GOLD AND SILVER
TO BEHAVE NORMALLY IN THE RAREFIED SYSTEMIC COLLAPSE WE ARE
SEEING UNFOLD AROUND THE WORLD. BUT I BET MANY WILL BE
BUYING AT MUCH HIGHER PRICES WHEN THEY CAN NO LONGER STAND ON
THE SIDELINES AS GOLD AND SILVER ROCKET HIGHER OR THEIR
INVESTMENTS IN FINANCIAL ASSETS FORCE THEM ELSEWHERE.
THE SAGE OF WEXFORD,
voting with my feet and
fleeing Conventional Wisdom Land.
BACK TO TOP
June 6, 2011:
A Double-Dip Recession into Depression Was Virtually Guaranteed.
As a lawful citizen of the United States, with a freshly renewed
passport I might add, I am both horrified and saddened by the
incompetence of the present and past leaders of this once-great
nation starting in Jimmy Carter's era. The Financial
Collapse of 2008 was handled so poorly, with money being created
out of thin air to throw at the unprecedented DEBT COLLAPSE to
avoid a liquidity crunch without addressing the resolution of
the underlying necessity for toxic asset write-downs, that our
situation now is akin to a frantic mouse backed into a corner by
a ravenous feline. THERE IS NO WAY OUT WITHOUT
SIGNIFICANT PAIN AND SUFFERING FOR AMERICANS AT THIS POINT.
Not only am I an ardent supporter of the abolishment of the U.S.
Federal Reserve, an institution that has done more harm than
good since inception with the exception of Paul Volcker's
tutelage, but an even more ardent supporter of a total revision
to the current political system in this country. Retain
democracy but get rid of most of the unqualified, self-serving
scoundrels and a system that perpetuates absolute power devoid
of regular citizen input and, hence, absolute corruption.
The United States is in no position in 2011 to preach the
virtues of Democracy to any budding government in the Middle
East or elsewhere. We have truly lost our way. As
long as politicians are more concerned about being re-elected
than doing what is fiscally sound for America, then our fate is
sealed toward Third World Status vis a vis a progressively ( no
pun intended ) lower standard of living that has already reared
it ugly head.
AMERICANS ALSO NEED TO
ACT LIKE RESPONSIBLE ADULTS WHO WERE GIFTED SELF-DETERMINATION
FROM THE CREATOR, SUCK IT UP WITH FEWER TEARS AND RANTS, AND
GRIT THEIR TEETH WHILE THE COLLECTIVE "DOCTOR" POURS DOWN THE
BITTER MEDICINE OF NO-MORE-SOMETHING-FOR-NOTHING TO INFINITY AND
BEYOND FROM BIG DADDY, aka UNCLE SAM.
That two Fed Chairman in Alan Greenspan and Ben Bernanke could
foolhardily subscribe to a zero REAL cost of money strategy to
sober up a financial and economic system drunk on excess debt
accumulation for the last 12 years is an outlier in history that
should never be repeated. Academics need to stay in
academia for the safety of the masses. A review of the
proclamations from these Elite Bankers proves that, not only can
they NOT forecast the fate of the economy for the next 3
minutes, they cannot attempt to micro-manage a $14 Trillion
economy without running the Ship aground. The so-called
"Wealth Effect" espoused by Academic #2 Bernanke as the savior
to the DEBT COLLAPSE OF 2008 has proven to be a false idol.
QE1, QE Lite, and the now exiting QE2 have proven to be abject
failures at stimulating and reviving the U.S. economy and
financial system. PERIOD. On a temporary basis, only
stock prices have been revived along with speculative fevers in
basic commodities via the endless money spigot from the Fed.
Since investors and savers make nothing by holding cash, thanks
again Helicopter Ben, AND REAL WORLD CONSUMER PRICES ARE SOARING
BY OVER 10% PER ANNUM NOW, even conservative CD savers morph
into a creature of the night and plunge into speculative
investments. Once the stimulative feedbag of money
printing is reduced in volume, which it inevitably must be SINCE
IT CANNOT BE ENDED ENTIRELY WITHOUT COLLAPSE OF THE U.S.
TREASURY MARKET AND THE DOLLAR, the last prop under stock prices
will fall just as the economic support of a very temporary
"recovery" has fallen. This so-called "Green Shoot
Recovery" was given an Artificial Fertilization of Zero Cost
Money and Misguided and Misdirected Fiscal Stimulus, ALL IN THE
TRILLIONS OF DOLLARS, which the sobering rains of Spring 2011
have now washed away. Oh, we can wait for more economic
data to come forth, data that is sadly manipulated on occasion
by those in power or fatally flawed in its computational
methodologies, BUT THE JURY HAS COME BACK WITH A VERDICT ON THE
U.S. ECONOMY.
AND THAT VERDICT IS: Welcome to
the Second Phase of the DEBT COLLAPSE OF 2008. That phase
is clearly a renewed or DOUBLE DIP "recession" as the
politically correct may label it, but correctly defined:
IT IS THE GREATER DEPRESSION.
Simply stated:
"One cannot have an outcome other than a depression when the
underlying financial system has failed regardless of
superficial, not fundamental, liquidity-not-solvency props to
make it appear recovered. One cannot have an outcome other
than a depression when residential AND commercial real estate
are either in, the former segment, or are entering, the later
segment, a multi-year depression. One cannot have other
than a depression when the goods- producing capacity of a nation
has declined by over 30% in the last decade AND A GREED DRIVEN
FINANCIAL SECTOR HAS TAKEN ITS PLACE; this latter elite
service-sector has not produced lasting "value" or wealth as
evidenced by the Trillions of Dollars of toxic debt and "assets"
putrefying in customers' portfolios that has yet to shrink to
its true value. One cannot have an outcome other than
a depression when retail sales and total employment levels are
entering a depression of their own." ...............
The Sage of Wexford, June, 2011.
History will prove me right on
this point, but who wants to be right when millions and millions
of Americans are having a hard time putting food on their
tables, a shelter over their heads, and clothes on their backs.
I hope all of you fence-sitters and market-timers out
there have been paying close attention to the behavior of both
Gold and Silver since the correction in the Precious Metals
began back in late April. Surprise, Surprise, Surprise as Gomer Pyle used to say on television.
Over the last few weeks, both Gold
and Silver have been able to hold their ground if not rally WHEN
THE STOCK MARKET CAME UNGLUED AT THE SEAMS.
What under Obama's Gray Skies could be happening here?????
Well, and I have been waiting for this day for a decade now, the
Sheeple are finally beginning to realize that the financial
markets are a giant Ponzi scheme tilted in favor of Wall Street
and against Main Street, that Gold and Silver are REAL MONEY IN A
TIME OF MONETARY / SYSTEMIC COLLAPSE, and that the Dollar's very
brief dead-cat bounce is just about over. I will give you
a few minutes to digest these salient facts. WE HAVE JUST
WITNESSED A CLASSIC TURNING POINT IN INVESTORS' PERCEPTIONS OF
THE PRECIOUS METALS. It may have slipped by you in the
chaos of daily battle on the investing landscape, but I say it
is of utmost importance as to what is going to happen to both
Gold and Silver prices this summer and beyond.
Now we all know that
summer can be a soft period for precious metals prices, but we
have a sea change going on here. WE ARE ALSO ON THE VERGE
OF ANOTHER BLACK SWAN LANDING AT ANY MOMENT SO I AM NOT PUTTING
MUCH CREDENCE ON SEASONALITY OF PRICES TO TIME MY OWN ADDITIONS
OF GOLD AND SILVER. Sound like a sales pitch?
Granted, I would sell you Gold and Silver 24/7 if I could since
as a professional investor I find very few alternatives out
there that are making me steady money, but this is medicine you
had better think about taking SINCE YOU CANNOT PREDICT WITH
ANY CERTAINTY WHEN THE NEXT FISSURE IS GOING TO OPEN IN THE
GLOBAL ECONOMIC AND FINANCIAL VOLCANO. Markets are
going to move very fast in The Panic of 2011. Events are
happening at accelerated speed these days, and your ability to
not only get me and other PM dealers on the phone in a panic
will be compromised along with surging premiums over spot and
backlogs out to 8 to 10 weeks to get delivery of product.
I know this business from over a dozen years of being in the
trenches and selling & buying Millions and Millions of Dollars
of bullion to thousands and thousands of very satisfied
customers.
THE NON-PRODUCING S&P 500
INDEX SINCE JANUARY 1998!!! Looks like we are today at an
S&P level first seen in March, 1999. Talk about a lack of
capital gains production!!! For you guys out there that
constantly tell the Mrs. you have everything under control for
retirement, DON'T LET HER SEE THIS GRAPH IF YOU VALUE LIFE.
I do think that not only will the
U.S. stock market continue the Bear Market Decline that it
started way back in 2000 as a triple top attempt shows to have
failed, but also that the Sovereign Debt Crisis that was born in
Greece is going to spread through the EU and intensify in
severity. ANY COUNTRY, INCLUDING THE U.S.A., CANNOT KEEP
THROWING GOOD MONEY AFTER BAD TO PLUG A VIRTUAL BOTTOMLESS PIT
OF BAD DEBT. The global banking system is hardly out of
the woods as to SOLVENCY since the toxic assets in mortgages,
derivative instruments, AND FAILING SOVEREIGN DEBT totaling TENS
of Trillions of Dollars yet to implode ARE STILL SITTING ON THE
BANKS BOOKS AT CLOSE TO FACE VALUE. Whether they sit on
the private sectors' books or the public sector's books via the
domestic Central Banks or such failed entities as Fannie Mae and
Freddie Mac, they are "assets" that will collapse in value as we
go forward as the holders' hands are forced by new regulators
AND THE CITIZENS OF THE LAND. THE ABILITY OF GOVERNMENTS TO SPEND OR INFLATE
THEIR WAYS OUT OF THIS DEBT COLLAPSE IS NOW BEING CAPPED BY
SURGING CONSUMER PRICES AROUND THE GLOBE, SURGING INTEREST RATES
FOR THE MOST COMPROMISED BORROWERS, AND BY A CITIZENRY THAT IS
HOPPING MAD OVER THEIR GOVERNMENTS' THROWING GOOD MONEY AFTER
BAD. The last development of mobs in the streets is an
attention getter that will unsettle financial markets like none
other. And expedite the rush to safety in Gold and Silver.
Your ability to time entry into any market is not only a
function of luck, but also of a market environment that is
devoid of the outsized probability of panic. I think we
are on the cusp of a panic of some variety, and you will see
gold move $50 to $100 and silver put on $3 to $5 in daily global
trading. Has happened before, is about to happen again! BUY PRECIOUS METALS WHILE THEY ARE IN A
CORRECTIVE MODE POISED TO BREAK OUT AGAIN AND ARE READILY
AVAILABLE. I am going to be one frustrated bullion
dealer when I cannot get access to reasonably priced and
delivered product as I was in the Fall of 2008. Thank
goodness I have superb access to top-drawer fancy colored
diamonds around the globe. But I have personally been
buying Gold since 1997 and Silver since 2003 in quantity; still
own the same watch (1979), car, and home that I bought in 2002.
And I am still a buyer today at $1,550 Gold and $37 Silver.
ENOUGH SAID, I am the broken record, next missive in 60 days ( or maybe sooner if we
have the looming panic beforehand ).
For those Dudes & Dudettes
that claim that Silver or Gold is in a bubble, feast your eyes
on this chart of the S&P 500 since January, 1950 to present.
Note in particular the exponential rise from January, 1995 to
March, 2000 where the index of American Large Cap Stocks
QUADRUPLED in just over 6 years. Ask yourself how much
corporate profits and the economy grew during that same period.
ANY WONDER WE HAVE BEEN IN A BEAR MARKET FOR STOCKS FOR OVER 11
YEARS NOW???? And at the beginning of a depression and the
end of low cost money & negative real interest rates, are they
undervalued or overvalued my friends??? NEWS FLASH:
WE HAVE SEEN THE TOP FOR THIS PEAK. 666 or below is the
Devil's number.
THE SAGE OF WEXFORD,
building the bomb shelter
daily ...... brick by brick.
BACK TO TOP
August 7, 2011:
Banana Republic Status Confirmed.
Two alternative titles for this month's rant were: "This
is a fine kettle of fish you've got us into, Stanley!" OR "On
The Road To Junk Bond Status". Now all of us erudite
adults out here in American-Reality-2011-Land know that the
credit rating agencies are a gaggle of financial whores, laying
down with anyone who will pay their fees, but my tattered hat
goes off to Standard and Poor's for having the gumption to
downgrade the United States' sovereign debt to AA+. Most
of us who have been in finance for almost 40 years now would
give the country a Junk Bond status based on the utter inability
of the U.S. Government to politically bite the bullet and rein
in entitlement spending. However, since the Black Boots
have already been sent to S&P's offices to rough them up a bit,
not to mention the busload of IRS Auditors right behind them,
lest they cut another notch in the next 60 days, we will
belatedly see the financial whores at Moody's and Fitch's do the
dirty deed of hoisting the American Flag and downgrading the
efforts of the fools in Washington to a rating a smidge closer
to "credit reality". The campaign slogan of, "Change We
Can Believe In" has turned into a complete Fiscal Nightmare, and
our Harvard graduate President will have one more very unique
feather to put in his under-qualified hat. I am personally
having a neon sign made at great expense to hang in front of my
office reading: "IT'S THE ECONOMY STUPID!!!!!!!!!!!!!"
The exclamation points will alternate Red, White, and Blue with
some paisley swirls thrown in.
I will donate the sign to the Guggenheim upon my expiration as
the single most deadly phrase that will send Barack back to
Chicago community service in January, 2013. I will even
pay his bus fare since he will not be campaigning on that trip.
He should serve without compensation 50 years of community
service just like any convicted felon! The American people
at the ballot box will serve as his jury of peers in November of
2012.
Now one of my Soviet-launched spy satellites has seen Helicopter
Ben oiling up the Monetary Printing Press again, but he knows in
his heart of hearts that a lynch mob that shops for its own
food, shelter, and clothing will be at his front door if he
pulls the lever. As the stock market goes into Panic Mode,
which it already is well within, and more and more signs of
economic retracement hit the slanted news wires, he will
probably put on his black cloak and hood and secretly employ
some form of liquidity injection in a Zero Interest Rate
environment. I have a newsflash for Bennie Boy: "One
cannot think about borrowing even dirt cheap money when one
needs a diaper to stay unsoiled in a very, very, very scary
financial and economic landscape". I have spent hours
going through old boxes of textbooks in the musty basement, and
I found a tome that I am going to send Bennie: "Economics
101". Please refer to Chapter 1, Page 3,
Not-Going-To-Be-Knighted Bernanke, where they talk about the
Propensity to Borrow. A populace caught in the downward
spiral of Loss of Confidence is not going to revert back
to old credit-induced spending habits just to keep the U.S. economy afloat when
they can barely meet current obligations and are worried sick
about job loss. The recent increase in Consumer Credit is
more use of plastic to pay existing creditors than to pay for
new shiny automobiles sitting in the driveway. At some
$30,000 a pop, I can do without new wheels for another 10 years,
just watch. Ford better be producing one heck of a quality
automobile to justify their current pricing schemes, because my
brother is still seeking reimbursement from Ford for a premature
failure on a 2005 Freestar's transmission. Class action
lawsuit currently in process ( no kidding! ).
Using credit to pay creditors is a page from Bennie's erudite
handbook titled, "How to Inflate the Global Economy in Four
Quite Easy (QE) Steps". Bennie will attempt to ride to the
rescue in the not-so-distant future in a remake of "Fist Full of
Dollars", but the poor lad is pushing on a string as the Second
Phase of the Greater Depression unfolds. Using more and
more Credit to put Humpty Dumpty back together again after
falling from a Wall of Debt will just not work. Putting
good money after bad is the proper description of the addicted
tendency of Central Bankers and Politicians around the world
today to try to inflate their way out of this Debt Collapse.
But the American Public has had enough of it as evidenced by the
stinging political polls and those very ornery Tea Party types
amassing in the streets and hitting politicians over their
free-spending heads with Notices of Eviction from Office.
Standard and Poor's merely saw how poison the political
environment was in America Today that the labeling of Tea Party
members as civilian-killing terrorists by the Vice Prez was the
final straw!! Way to go, Biden!!! Dan Quayle thanks
you, Joe, for taking the title of Goofiest Second in Command
from his legacy just like Jimmy Carter thanks Obama for taking
the Worst President in Modern History title. I have also
found out that the CEO of S&P is a card-carrying Tea Party
member, but this is confidential, so don't spread it around.
Shred this ezine after reading.
GET READY FOR PANIC IN THE STOCK AND BOND MARKETS GOING FORWARD.
What will happen tomorrow, Monday, August 8th, me not know, but
deep doo-doo begets a very stinky financial environ. We
will have some of the Government subsidized hedge funds and
Money Center Banks selling Gold and Silver futures on this
occasion or that to get liquid
FROM LOSING POSITIONS as the Crash of 2011 gains momentum ,
but physical bullion buyers are lining up as I type. It
was a very busy bullion and colored diamond selling week last
week and I expect to be even busier this coming week as the
wheels fall off the Obama bus. How you people out there
ever elected this bozo who was never even a Cub Scout or who never
ran a lemonade stand is beyond me, but I am holding you folks
responsible for letting the 50-ish kid get both of his hands in
the fiscal cookie jar. Now he is stuck just like Pooh Bear
in the honey jar.
Stocks are selling at some 20.19x projected earnings and as the
economy slumps further South in the weeks and months to come,
those profit projections are going South as well. Note
that at the March, 2009 interim low that the PE only got down to
15x ....... not cheap when the historical average has averaged
10x to 12x AT MARKET BOTTOMS, and when at the crash lows of
1921, 1932, and 1981, the PE was from 5x to 7x. Stocks are
not cheap even after the recent pummeling, so the Sage feels
that we have another 50% to 60% down in stocks to go since the
denominator, Earnings, are going to keep pushing the ratio up as
the economy goes into Phase II of depressionary decline.
In fact, the PE today is very close to valuations that existed
back in 1965 when stocks entered a torturous 16-year Secular
Bear Market that did not end until August, 1981 with a 7x times
PE ratio, a 66% decline from here??? Do definitely think
we will exceed the March, 2009 low of 666 on the S&P. 500
would not be surprising for the S&P 500.
This secular bear market started in 2000 with the highest
over-valuations for stocks in recorded history, some 44x
earnings.
IS THERE ANY WONDER
THAT THE EXCESSES OF THE TECH BUBBLE OF 2000 HAVE YET TO BE
WRUNG OUT OF STOCK PRICES WITH TWO CONSECUTIVE
OVER-ACCOMMODATIVE FED CHAIRMEN FOR THE DURATION TO DATE???
WE ARE IN A SUPER SECULAR BEAR
MARKET IN STOCKS THAT WILL MAUL MOST RETIREMENT ACCOUNTS AND
INVESTORS' NET WORTHS BEFORE IT IS OVER!
We have
a Global Contagion in Sovereign Debt Defaults now in progress
with the S&P Downgrade, so man the lifeboats of Gold and Silver
because things are going to get very ugly in the trading pits
and on Main Street. Higher interest rates for U.S. credit,
whether it be at the Federal, State, Local, or private/consumer level is
inevitable as the world adjusts its price for giving more
fire-water to the drunken American Debt Machine. It will
happen. The rush into Treasuries as the least-of-all evils
last week pushing the 10-year Note yield perversely down to 2.6%
from the 3% region is totally herd instinct and very
counterintuitive in my book. Let me do the math:
Over ten years I make 26% in still-borrowed interest payments
from Uncle Sam WHILE INFLATION EATS MY LUNCH BY 100%. IS
THAT A DEAL OR WHAT??!!!***##@@@
My savings account at
USAA, the military insurance company, is at a whopping 0.30% and it
literally pains me to hold cash although I do know with some
confidence that USAA is one of the few solvent institutions out
there.
SAVINGS ACCOUNTS & MONEY MARKETS ARE JUST PARKING PLACES FOR
MONEY WAITING TO FIND A BETTER DEAL.
If your money market holds European Sovereign Debt instruments
or European Bank instruments, you had better take a second look
at whether the $1 per Share GOAL will be met!!! And those better
deals are coming on the interest rate front for American savers,
stay tuned. I guess Barack gets a Bronze Star on his
forehead for that aspect of spending us into oblivion in the
shortest amount of time in history ....... AND EVENTUALLY GIVING
SAVERS HIGHER YIELDS IN THE PROCESS. See ........... no
politician can be totally incompetent!
Let's see, U.S. Treasuries are on
their way to further credit rating downgrades, inflation is
north of 9% domestically, the Federal Reserve has monetarized
$Trillions in Treasury issuance to date and has pretty much
spent its last nickel, U.S. Federal Spending is on a runaway
trajectory, WHICH WAY DO YOU THINK THIS CHART IS HEADED IN THE
MONTHS AND YEARS AHEAD???!!!
If you are waiting for $1500 Gold and $32 Silver I suggest that
you not stand on the sidelines in the immediate future as all
currencies are recognized for what they really are: A
Promise To Pay Or Retain Buying Power That Is Issued By A
Sovereign State That May Be Insolvent. The rush to the
bottom for competing currencies is well underway so it will only
be a case of what currencies end up at the top of a depression
in the earth as to purchasing power. Europe is a morass
that is too lengthy a topic to go into in this missive, but
trust me when I say that Spain, Italy, and possibly France are
going to tip the Ship of Euroland into very muddy waters in the
days ahead. Another Mega-Credit Crisis in Europe is inevitable at
this point, and this will be on top of a Liquidity Crisis that
is developing in China, one of the few global economic cylinders
still firing. The newly issued debt of the PIIGS and Then
Some have grown utterly toxic. I do not expect the
EuroZone to survive in its current configuration of Haves and
Have Nots.
CONTAGION IS CLEARLY IN THE WIND! What is your retirement nestegg in stocks and
bonds going to look like if this Waterfall Decline in Equities
proves to be farther and faster than the Fall of 2008???!!!
I say a collapse is coming and the Fed and the Tooth Fairy
haven't a single EFFECTIVE arrow left in their quivers to shoot the Beast
of Lost Confidence dead in its tracks.
Enough for now, I think there is the sound of Black Boots
outside my door.
Gold is going to
$5,000 per ounce and Silver to $150 before this is all over in
the next decade. New
long-term forecasts from the Sage of Wexford, but in my wildest
dreams, and they can be pretty weird, I never imaged such a
debacle of incompetent leadership around the globe as we have
now. Nor could I have ever imagined the amount of
un-payable debt that has been created in the $100's of Trillions
that has yet to evaporate on the ledgers of history. Good
night, Mrs. Calabash, where ever you are as the late Jimmy
Durante used to close with.
THE SAGE OF WEXFORD,
determined to survive the
Maelstrom with something of timeless value.
And a steamer ticket to Norway.
Post-Postscript: We are
in recessionary territory AGAIN with Consumer Sentiment or
Confidence. In fact, we are on the way to setting a new
low for the series. How can an economy 70% dependent on
consumer spending experience any growth if Confidence is
plunging??????!!!!!!! HOW CAN CORPORATE PROFITS GROW IN A
DECLINING ECONOMY??? The signpost up ahead reads, "You are
now entering the Loss of Confidence Zone" in the Greater
Depression of 2008.
GO BLUE!
OH, AND ALL YOU STOCK CHEERLEADERS OUT THERE, HERE IS A
REVELATION: CREDIT RISK & DEFAULT RISK DO MATTER IN THE
EVALUATION OF CORPORATE PROSPECTS GOING FORWARD. HARD
TIMES ARE NOT A TIME FOR ATTEMPTING TO SERVICE INCREASINGLY
EXPENSIVE DEBT. JUST ASK THE U.S. TREASURY IN THE NEXT
YEAR THE SAME QUESTION!!! AMAZING CORRELATION TO MOVEMENT
OF S&P 500. TIMBERRRRRRRRRRRRRRRRRRR. MUCH MORE
DOWNSIDE IN STORE FOR THE S&P 500 COMPANIES' STOCKS.
BACK TO TOP
October
17, 2011: Precious Metals Bull Just Grazing In The Pasture
Gaining Strength For Next Rally Phase.
I thought I would break with tradition today and start my ezine
with a discussion of the precious metals. I get so worked
up with the political crap that has engulfed our everyday lives
that I very often vent profusely in introduction and have little
steam left for discussing the most precious of the metals, Gold
and Silver. I think with every ounce that I sell of either
metal in the future, I will include a box of Pampers and a
fishing rod so that my clients are better able to cope with the
vicissitudes of these two increasingly popular commodities
necessary for a healthy life. The fishing rod is better
than prescription tranquilizers in soothing your nerves and
keeping your eyes off the minute-by-minute price charts of the
precious metals.
BUT EXPECT GREATER
VOLATILITY IN THE PRECIOUS METALS IN THE WEEKS AND MONTHS
DIRECTLY AHEAD. THINGS ARE ABOUT TO GET VERY NASTY IN THE
FINANCIAL MARKETS AND THE ECONOMY, NOT JUST STATESIDE, BUT
GLOBALLY.
But the trend is your
friend and we remain in a very powerful long-term Bull Market in
both Gold and Silver. Stay the course and sell the
vacation home to buy more on dips like we just had.
Conviction must last two decades in here, not just months and
years.
When silver investors, for example, start looking for the
nearest cliff to end it all over, after a 25% CORRECTION in a
matter of days, one has to step back and realize that in the
Fall of 2010, silver was still trading around $23 per ounce.
Seems like we are in a consolidation zone right now from $28 to
$32 per ounce, so a 30%ish increase in just a year's time is
nothing to sneeze at and should keep you a safe distance from
that perilous cliff you just discovered via Google.
Compare this return to what your friendly (or unfriendly) banker
or money market is paying you right now. Hard to save for
retirement or anything else at interest rates under 1/4 of a
Percent, especially when the Pump Priming by global Central
Bankers has caused food prices to rise so quickly you are
tempted to pull an Occupy Wall Street and campout in the fresh
produce, diary, or cereal aisles. Although Greenspan and
Bernanke have damaged both the economy and financial system of
our once-great nation during their tenures, us Precious Metals
Owners are deeply in their "debt" for attempting to inflate the
United States AND THE WORLD out of the Greater Depression of
2008.
And don't forget that Gold was trading at $1320 a year ago, so
today's $1670 price per ounce still nets long-term holders a
fine inflation-beating 27% gain. Now the Comex is on a
mission to stamp out speculation in the futures pits by
increasing margin requirements once again for both Gold and
Silver, BUT DURING A PRICE DECLINE, NOT A PRICE SURGE!!!
What about the U.S. Treasury Bond market ........ oh
ever-so-vigilant overseers???? If there ever was an
accident waiting to happen it is in intermediate to long-term
bonds, especially U.S. Treasuries and secondarily Corporates and
Municipals. Since Harrisburg, PA just filed for bankruptcy
last week, expect more and more municipalities to follow this
route to avoid outright fiscal collapse and preemptive take-over by State
governments. With U.S. inflation north of 9% as my nimble
digits fly across the keyboard, don't us Peons need at least 10%
interest on our money to stay even, much less ahead?????!!!!!
Cash is trash, but keep some buried in the backyard for the
inevitable Bank Holiday that is not far away.
Please also realize that Gold is a First Tier Monetary Metal (
FTMM ), so with new central bank buying, which I predicted over
7 years ago on these electronic pixels, the correction in Gold
from $1920 to $1595 represented a 17% pullback, roughly 50% less
on a percentage basis than Silver's 25% correction. Silver
may be considered a Second Tier Monetary Metal ( STMM ) for the
purposes of future central bank reserves that will be necessary
to restore sorely lacking confidence in fiat, paper currencies
within the next decade or so. Silver is also a thinner
trading market, so it doesn't take as many contracts from JP
Morgan or Goldman-Sachs to whack the metal southward AND it
happens to have the massive short position owned by JP Morgan
that requires fainting spells so that the bank's officers will
get their next paycheck, much less any bonuses this year.
Is it any wonder that Occupy Wall Street is full of citizens who
feel disenfranchised from the rewards of investing??!!!
But JP Morgan's day of reckoning regarding its massive short
position in Silver is fast approaching as the political winds
blow against the Wall Street Thugs, who regardless of political
contribution truckloads sent to Washington for 2012, will lose
tremendous political influence in the months and years ahead.
Another Sage Prediction that you can
bank on. Wall Street has now become a very
convenient Political Whipping Boy for politicians who fear being
in the unemployment line in the not-too-distant future.
Many will make it into that line regardless.
NewsFlash:
The S&P 500 at 1205 right this second was at 1186 one year ago.
That is a whooping 1.6% return, or some 7.4% under the
U.S. inflation rate of 9%. How is that asset class working
out for you Baby Boomers like me out there who want to avoid
being a Wal-Mart Greeter at age 80???
CREDIT AND DEFAULT RISK ARE COMING TO A BOND YIELD NEAR YOU.
Uncle Bernanke, who will be fired 10 nanoseconds after Barack
Obama is thrown out of the White House in January, 2013, is
serving no one with Zero Interest Rate Money in the United
States. Even if the banks could afford to take the risk of
lending money out of their vaults, WHO THE HECK IS CREDITWORTHY
ENOUGH TO GET A BIG LOAN TODAY AND WHO THE HECK IS IMPRUDENT
ENOUGH TO TAKE ON MORE DEBT WHEN THE TREND IS TOWARD DEBT
LIQUIDATION AT THE CONSUMER LEVEL!!!
Anyone still doubt that hard assets such as gold and silver are
the enemies of bankrupt governments who are threatened by their
substitution for freshly-printed currencies and Sovereign Debt
as stores of wealth?!! While the Nymex/Comex can attempt
to put a lid on PM prices during a portion of the 23-hour
trading day, this is a global market for Gold and Silver, and as
I have said until I am purple in the face:
THE DEMISE OF
THE STATUS OF THE UNITED STATES WILL INCLUDE A DEMISE OF
AMERICAN TRADING EXCHANGES ON THE PRICE DISCOVERY MECHANISM FOR
ALL ASSETS TRADED. Wall Street may have a bunch of
1960's hippie throw-backs / prodigy camping out on their front
lawns today, but it will be more and more Wall Street employees
that will be camping out on their own front lawns tomorrow as in
the movie, "Everything Must Go". Will Ferrell was a beer
alcoholic in this tragic comedy, but the Wall Streeters are
addicted to Unprecedented Leveraged Speculation, unearned compensation, and
outright fraud when it comes to full disclosure of total risk
pertaining to their Designer Securities peddled across the
globe to widows and orphans. MAIN STREET IS ENTITLED TO BEING MAD AT WALL
STREET. Where are the bail-outs for the man or woman on
the street??? Oooppps. The piggy bank is broken.
Europe has just come to this realization also regarding its own
PIIGS and ALL EUROPEAN BANKS.
( SEE HOW THE SAGE IS CONSTANTLY DRAWN
INTO THE POLITICAL MAELSTROM OF 2011 IN HIS DISCUSSIONS OF THE
PROSPECTS FOR GOLD AND SILVER GOING FORWARD!!! )
While the Lefties are going to pour money and support behind the
Occupy Wall Street "mobs" in the classic me-too, me-too of
flailing, failing politics of money looking for a cause, some of the
biggest contributors to the Obama Administration's coronation
have been the targets of these disenfranchised groupies, i.e.,
WALL STREET. Watch a finally coherent message come from
near-term interviews of participants as the Union and Move-On.org
monies and infiltrators flow into the sea of unwashed or poorly
kept demonstrators who should have a shovel-ready job by now. The Tea Partiers, who at least did not offend the
olfactory nerve by wearing clean clothes while in public and
never were documented as either spitting on or destroying
anything or anyone, were previously referred to as terrorists
and unruly mobs by many elected officials in King Obama's Court,
esp. former Speaker of the House, Ms. Nancy Pelosi. Both
Nancy and Hillary Clinton really need a new line of make-up
these days since the Fall From Power and the Rise To Power,
respectively, are having adverse effects on their television
persona's. Not a sexist comment, just an observation from
a homo sapiens, many women I know have made the same
observation.
Remember the Disney cartoon movie, "Ferdinand The Bull"?
He was such a gentle creature that they just couldn't get him
mad enough to participate in a bull fight. He pranced
around the flower-filled meadows like a hoofed bumblebee, until
he got stung by one. Then he snorted, figuratively
breathed fire, and charged at anything that moved. That is
our current beloved bovine, the Precious Metals Bull. He
is so good-tempered right now even with the Comex sticking
sticks in his eye, that he cannot see the big, bad Bumblebee
coming to set him on fire again. Here are just a few
Bumblebees buzzing around out there to reignite our most beloved
Bull:
1. The Nitely News decides to report the real state of the
economy and it is clear to everyone with a Third Grade education that The Double Dip Is Here.
( Antidotal Evidence from The Sage: Just got a UPS package
this Monday PM that was ordered on Friday from a company in
California. Transit and processing times for retail orders
have shrunk to days from weeks. ) THE RETAIL SALES GAIN
JUST REPORTED WAS ALL SEASONAL ADJUSTMENT, NOTHING ELSE, NO LIE.
Great work if you can get it.
2. Germans decide that their Teutonic Heritage is more
worthy of preservation than preservation of the Euro, and they
vote NO! on bailing out more PIIGS that can't fly. EURO
may survive but it will be a much thinner version with fewer,
more solvent participants. Dollar has benefited from
EuroMalaise of late, but that jig is just about up also.
The Sage not buy, however, the requirement for the Dollar to decline
for the Precious Metals to ascend. The Dollar is toast
anyway you slice or dice it, just a question of when it ends up
in the Fiat Trash Heap of History ( FTHH ) ......... Gold and possibly Silver will be
called upon to back-up the New Greenback when it is created.
3. The default of Greece is only days, maybe some 9 days, away and
the European banking system will come to the brink a la 2008
bringing down the U.S. banking system with it. The Eight
largest banks in the United States will subsequently have to be
restructured using Private Funds, not Public. Occupy Wall
Street will turn into Obliterate Wall Street if any substantial
taxpayers monies are used to restructure these banks. This
is what should have been done in the first place back in the
Fall of 2008; risk-takers must fail if they make stupid,
imprudent, greed-induced decisions to include A.I.G., Chrysler,
and Government Motors. No other long-term approach will
preserve American Capitalism Principles ( ACP ) that once led us
to greatness.
4. Congress and the White House continue to be at
loggerheads concerning government spending and taxation and
another Government Shutdown Possibility is right around the
corner. Americans and our trading partners lose faith in
America's will to get its fiscal house in order, we get another
downgrade in our credit rating but from all three rating
agencies this time, and the sale of U.S. Treasuries, both
freshly-printed and secondary-market, suffer from a lack of bids
with yields having to rise sufficiently to attract new suckers,
I mean investors.
China uses selling points all over the world to unload as many
Treasuries as possible under the radar. Currency
Manipulator Legislation from U.S. Congress more than poorly
timed.
5. Large States such as California and Illinois become
insolvent and have difficulty selling new bonds at any price or
yield. Greek Contagion has come full circle, and
public-service employee layoffs soar along with disorderly
demonstrations and sit-ins. Services are cut while tax
increases are passed at the local levels upon a populace that
already can barely make ends meet. Civil unrest spreads to
the taxpayer level with the escrowing of tax payments awaiting
reform gaining in support and practice nationwide.
6. The S&P 500 confirms its renewal of the 2000 Bear
Market with a close below 1100 as quarterly earnings are replete
with losses and missed guidance, Europe implodes at the Euro,
ECU, and bank levels, and bond yields rise to more correctly
reflect default and credit risk, not to mention inflation risk,
AND STOCKS CANNOT TAKE THE COMPETITION. An economy
re-entering a Depression it never left without fudged inflation
adjustments is not going to produce 15% to 20% year-to-year
profits growth as the market is priced right now. Expect
corporate earnings by 2013 to show negative comparisons to prior
even with U.S. Bastardized Corporate Accounting ( USBCA ).
500 to 430 on the S&P 500 here we come.
This is only 6x Bumblebees to put PM
Bull into charge mode, I am sure either you or I will come up
with 5 more by breakfast time tomorrow. Me the Humble Sage
thinks it is only days, not weeks, before a bumblebee stings.
WELCOME TO THE LOSS OF
CONFIDENCE PHASE OF THE GREAT DEPRESSION OF 2008. IN TIMES
OF DISRUPTION TO THE FINANCIAL, ECONOMIC, POLITICAL AND CIVIL
STRUCTURE OF ANY SOCIETY, GOLD AND SILVER HAVE PROVEN THEIR
METAL.
Don't be a market
timer in here! I have told you this for the last decade plus.
I just bought some more Silver this morning and watched the
price go down 50 cents after doing so, but to coin a phrase from
Alfred E. Newman, "What Me Worry?". Would rather own
it than chase it or not be able to get it at any price.

a.k.a. Alan Greenspan
a.k.a. Ben Bernanke
a.k.a. Timmy Geithner
a.k.a. Eric Holder
a.k.a. Vladimir Putin |
Delivery times are
going further out as demand soars during this "correction" with
3 to 4 week delays common, premiums at the refiner/mint levels
are going up, and it will be more difficult with time to buy the
amount of both Gold and Silver that you want to buy in a timely,
cost-effective manner. Sit on the fence or market time at
your own peril. Rocket ships are hard to mount by
earthlings once launched skyward. Bucking Bulls even more
so.
And this is no bull.
THE SAGE OF WEXFORD,
right on about Gold and Silver for over 15
years now.
BACK TO TOP
December 7, 2011:
THE SHIP OF FOOLS HAS RUN AGROUND.
One can't help but feel both the emotions of disgust and depression
at the Current State of Affairs. No, I am not talking
about Herman Cain's alleged misdeeds, but what passes for
governance in the World today. For European bond investors
to reduce Italian bond yields at auction merely due to a pledge
by Sarkozy and Merkel to strive for more central Brussels
control over miscreant EU member state budgets and spending is a
bridge to nowhere. If the United States stands little
chance of getting a constitutional amendment requiring a
balanced Federal Budget each and every year, good luck with
getting acceptance by Greece, Italy, Spain, and Ireland where
austerity measures are already causing riots in the streets.
While we have 50 States to present the proposal to, the European
Union has but 17, BUT OF DIVERGING AND HISTORICALLY UNIQUE
DIFFERENCES OF PRIORITIES WHERE LANGUAGE AND CULTURAL FEATURES
ARE MORE FRAGMENTING THAN UNIFYING. We supposedly speak
one language, English, in the United States, but language is
only one element of differences between increasingly torn
members of the Euro countries. And if France wants to wait
until June of 2012 to attempt ratification of these proposed
Euro Treaty changes, Rome will have burned to the ground along
with most of its countryside by then. THERE ARE NO
PROPOSALS ON THE TABLE THAT WILL SOLVE EITHER THE EUROPEAN OR
AMERICAN CRISES OF TOO MUCH
FRICKING DEBT THAT WILL NEVER BE REPAID. THERE IS NOT
ENOUGH TEA IN CHINA TO COVER THIS EVEREST OF DEVELOPED (?) WORLD
DEBT!!!
Now Ben Bernanke, just like
his predecessor Alan Greenspan, has some distorted notion of his
ability as Fed Chair to put out every global financial fire with
buckets of freshly printed Dollars, BUT NEAR-TERM LIQUIDITY IS
ONLY ONE ASPECT OF A MUCH BIGGER LONG-TERM SOLVENCY ISSUE FOR
HIS LUCRE RECIPIENTS.
Bennie Boy is like the Little Dutch Boy that races to the
compromised dike with a bottle of Elmer's Glue instead of
buckets of quick setting mortar. Actually, there is no
mortar in quantity enough to plug the Broken Dikes of World Insolvency.
THE TENS OF TRILLIONS OF DOLLARS OF DEBT COMING DUE IN THE NEXT
18 MONTHS IN EUROPE AND THE UNITED STATES ARE JUST TOO HUMONGOUS
TO BACKSTOP. Only time and massive defaults can stop the
tidalwave of global financial insolvency. THE UNITED STATES
FEDERAL RESERVE WILL BE REINED IN UNDER ANY NEW ADMINISTRATION
IN THE WHITE HOUSE AND CONGRESS IN 2013. The frightening
question is how much additional damage an uncontrolled Fed
Printing Press will do in the interim. Does Bernanke have
any grandchildren that will be stuck with the towering bill he
is creating for generations to come?????????????????

Courtesy of http://www.jsmineset.com/ |
Don't you feel all warm and cozy inside knowing that your very
own Central Bank is creating liabilities known as Dollars out of
thin air in the $Trillions on an annual basis, literally giving
them away at interest rates a fraction of what they should be to
COMPROMISED OR INSOLVENT BORROWERS, and never telling you the
American People that these Dollar Swaps or Loan Facilities may
create $Trillions of losses for American generations to come AS
EUROPE IMPLODES FINANCIALLY AND EVENTUALLY ECONOMICALLY.
Confidence in the United States Federal Reserve
AND THE UNITED STATES GOVERNMENT is rapidly
waning as one failed attempt at saving the economic and
financial system of the world proves to be short-lived in effect
and TOTALLY INEFFECTIVE IN RESULT. We are in a time warp
right now as world events will occur in increasingly more rapid
succession entering 2012, bringing the very real end-result of
systemic collapse to a venue near you. Yes, Systemic
Collapse is what we are facing now due to The Ship of Fools,
just ask Jim Rogers or even George Soros. HAVE 3-MONTHS OF
LIVING EXPENSES BURIED IN A MAYONNAISE JAR IN THE BACK YARD
BECAUSE A 60- TO 90-DAY BANK HOLIDAY IS ACOMING.
Now enter S&P, a rating agency that has been slow-on-the-draw to
make ratings changes as everyone but Santa's Elves knew of the
rapid development of compromised credit conditions of a
multitude of borrowers, Stateside and across the globe.
Including France and Germany in a 17-count list of potential AAA
& AA has-beens, S&P throws cold water on the EURO SALVATION CROWD
with a dose of financial reality: Even the Teutonic
Bastion of Fiscal Soundness, Germany, with a debt to GDP ratio
of 200%, is not immune to getting a much deserved down-grade in
its credit rating. Especially if Reich Minister Merkel is
proposing some form of Euro Slush Fund to attempt to save the
proliferate spenders of Europe from themselves and effectively
putting the citizens of Germany on the hook to bailout the
bankrupt Southern and Western European countries. Financial,
and hence, economic reality is seeping into the trading markets
for European Sovereign and Bank debt at an accelerating pace.
The credit markets get it first, the equity markets next.
Once confidence is shaken in credit markets, it can take years
and years to restore same. Just ask any country that has
defaulted on its debts to foreign creditors as to how many years it
took to get back to manageable, serviceable interest rates. Now it is
up to Moody's and Fitch's, two more slow-on-the-draw credit
rating agencies, to ante up to the bar and downgrade the United
States in step with S&P's earlier downgrade.
IT IS
INEVITABLE, REGARDLESS HOW RETICENT THE GRADING AGENCIES MAY BE
TO AVOID A POLITICAL HAILSTORM ( and even more profit-killing
regulation ), FOR THE UNITED STATES AND EUROPE TO APPROACH THE
JUNK STATUS OF SOVEREIGN DEBTORS.
The current ratings on the entities in question is a joke, and
if the agencies want to remain germane and even marginally
profitable, they will swallow the bitter pills of Sovereign and
Domestic Bank credit downgrades. THIS NECESSITY APPLIES TO
BOTH U.S. AND EUROPEAN ENTITIES, SPORTS FANS!! Of course, our Miscreant
Congress will attempt to put them in the slammer for finally
doing their jobs, but there is plenty of room there also for
Congress. How about that Pelosi Insider Trading scandal!!!
I have sent Nancy the unlisted phone number for Martha Stuart
who can give her some knitting tips for Nancy's upcoming stay in
West Virginia. And Nancy, your last face-job pulled things
a little too tight!
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
Now on to Gold and Silver.
Many investors seem enamored with the recent rally of the stock
market back above its recent trading range highs, but it is a
FOOL'S RALLY. To think that European leaders, or American
leaders, if we have any!, can solve the current DEBT COLLAPSE
VIA EDICT OR MONEY PRINTING GETS ONE A FIRST-CLASS CABIN ON THE
SINKING SHIP OF FOOLS. Hope springs eternal in the hearts
and minds of stock investors that think somehow, some way, we will
avoid hitting the rocky shoals of financial and economic
meltdown with one tidbit here, one flotsam there of better-than-expected economic news or more sound-and-fury
of reform out of European
leaders. The European cow is not only out of the barn,
EuroDaisy was last seen climbing the Matterhorn.
We are firmly within the grasp of a
multi-decades-long DEPRESSION and only time and debt dissolution
will get us out. Very simple. But the U.S. economy
is no beacon of light on the horizon for the wallowing vessels
of foreign lands, because Americans and the American Government
have feasted at the trough of Public Largess and Entitlement for
over 50 years now AND WE ARE LISTING BADLY TO PORT. (That
is the LEFT side of the ship!). Such an imbalanced vessel
cannot steer straight and certainly is in no shape to navigate
the dangerous shoals the Ship of State is caught within.
Although my gut tells me that some major sovereign, economic, or
financial entity is going to founder sooner rather than later
to cause chaos in the markets, we can set a horizon of Spring of
2012 as a end-post in our planning. Both gold and silver
are being wound up like tightly-wound springs, not susceptible
to panicked selling due to exploding global demand, forget the
defunct trading venues such as the Comex. The MF Global
failure is a fatal arrow in the raison d'etre for the Comex and
this exchange will never recover from the failed supervision and
oversight of one of its major trading members. If one
thinks that both Gold and Silver will fall 40% along with a 70%
decline in stocks and a 50% decline in bonds in the very near
future, then by all means stay in cash under the mattress ...... not
in a bank or money market that pays you 0.15% to 0.30% per
annum.
I have watched markets for almost 40 years now, and
I know technical strength when I see it. Gold and Silver
trading since the end of summer are eliciting all of the traits
of markets that are merely consolidating for their next moves
higher.
TAKE THE
LONG-TERM VIEW IN INVESTING AND YOU WILL SEE MORE CLEARLY THE
INTACT UPTRENDS IN BOTH PRECIOUS METALS! Note the
ascending wedge pattern building in Silver. Jump on the
train, because a speeding train is tough to jump on.
BACKLOGS ARE ALREADY COMING BACK IN MOST BULLION PRODUCTS.
The differences today in the bullion investment landscape versus
October of 2008 are striking. Investors have seen
Government and Central Bank efforts to revive domestic economies
and financial systems fail. Americans have nothing to
cheer about when their Government tells them we have made money
on this TARP program or that, because there are many programs
used to bail out financial entities in the United States and
Europe that We The People do not know about and that will almost surely
fail to return principal to the American taxpayer as a financial
collapse occurs. And these clandestine programs are in the
$Trillions, not in the $100's of Billions as existed under
Paulson's tenure. Government Motors has proven to have
been a bad investment for the American taxpayer, not only as the
much-beloved-by-Obama Volt catches fire under load, but
$Billions are lost on stock sales of GM on behalf of
us-little-ole taxpayers.
AIG is still an accident waiting to happen, the final chapter
has not been written yet. The FHA has
become the Fanny and Freddie of the Obama Administration,
effectively guaranteeing many new residential mortgages.
See, We The People continue to go into the hole of blackest
Public Debt even as we struggle to reduce our Private Debt.
Faith in Government and the U.S. Federal Reserve is not what it
was in the Fall of 2008. Hard to believe that U.S.
Treasuries will cop a bid this time around as the Safe Haven of
Choice. These compromised CCC promissory notes barely pay
for the electricity to place the order for them online.
Placing my bets on Gold and Silver being those safe havens!
The debasement of currencies, sovereign debt, bank debt, and
most paper assets is well underway and on an unprecedented
scale. Desperate governments and Central Banks are doing
desperate things that only guarantee greater insolvency of the
issuing parties in the future. No solution has been found
for the Debt Collapse of 2008, we are merely in a new phase of
it, a much more dangerous phase where printing money seems to be
the path of least resistance and the hard political decisions
are delayed indefinitely, i.e., the Congressional Super
Committee. People who have never even thought of Gold and
Silver as alternative investments are buying bullion in size and
on a regular basis. The mindset of investors is much
different than in the Fall of 2008, redemptions from stock
mutual funds over the last 3 years is just one example of
abandonment of traditional investment avenues, partly out of
lack-of-trust and partly out of Total Lack of Performance for the last decade
for equities.
Scandals on Wall Street, with former NJ Governor Corzine's
complicity in the disappearance of $1.3 Billion in client monies
the most telling recent example, have created a "Them Versus Us"
mentality with investors. Hence, Occupy Wall Street makes
a curtain call. The entire financial system, to
include intermediaries such as MF Global, has grounded on the
very rocks that they once could maneuver around with ease as
regulators watched with half-closed eyes.
Many European banks are on the brink of failure as I type.
HENCE THE UNAUTHORIZED, PANIC MOVE BY THE FED TO PROVIDE DOLLAR
SWAPS AT INTEREST RATES SUBSIDIZED BY THE AMERICAN TAXPAYER.
Their balance sheets are leveraged some 26 to 1 compared to U.S.
bank leverage in the 13 to 1 range, both exposed to evaporation
of equity positions with 4% to 8% revaluations of Assets Held.
Revaluations of CDO's and CMO's on their books, NOT TO MENTION
EUROPEAN SOVEREIGN DEBT, an event that may well be forced by the
markets and/or the naughty Credit Rating Agencies in the near
future should pretty much do the trick. It is just a matter of what rock hits the hull of the
European Bank Ship ( EBS ) in
question, not if or when. We did not have the European
Situation in the Fall of 2008. It is here now with a
vengeance and getting worse by the day as the Eurocrats fiddle
with makeshift "solutions" and debt payments across Europe come
due every month.
THE PERFECT
FINANCIAL AND ECONOMIC STORM IS HERE FOR BOTH GOLD AND SILVER TO
PROVIDE A STORE OF WEALTH IN A TIME OF UNPARALLELED WEALTH
DESTRUCTION.
NEWSFLASH: THERE HAS BEEN NO ECONOMIC RECOVERY SINCE
THE 2008 RECESSION BEGAN. FUDGED GDP DEFLATOR NUMBERS FROM
THE BUREAU OF LABORED SCAMMING ( BLS ) HAVE BEEN SUPPRESSED TO
NOT SHOW THE 9% TO 10% INFLATION THAT EXISTS IN AMERICA AT THE
CONSUMER LEVEL. ANALYSTS THAT STATE THAT INFLATION IS
WELL-CONTAINED MUST HAVE THEIR WIVES DOING ALL OF THE SHOPPING.
Does Ben Bernanke ever do the shopping for his family??
THE SAGE OF WEXFORD,
Merry Christmas To All and To
All A Good Fright.
P.S. Check out the Sage Predictions in December, 2010 for
Gold and Silver for interim 2011: $1755 for Gold and
$42.75 for Silver, what a genius!!! Then I got carried
away and gave new targets for 2011 of $1835 for Gold which did rise
to the occasion and bested my forecast by closing in London at
$1895 on September 6th. Now my second/follow-up forecast
for Silver of $57.20 has not been achieved yet ....... BUT THE
SAGE'S CRYSTAL BALL SAYS WE WILL HIT THAT LEVEL BY APRIL 15th,
2012. No guarantees, but am accepting Xmas gifts of
gratitude for those of you who benefited greatly by my Sage
advice. Could use a new BMW to adorn the driveway!
Stockings of coal also accepted, I will forward same to Congress
and the White House AND TO THE BULLION NAYSAYERS.
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