Closer look at $Gold

Gold shows a  clean break out in its long term bull trend.  Silver has failed to confirm this but could be lagging.  There are a number of developments with the FED and China that is going to shape our next 2-5 years.  I will go into further detail in a separate post.

A look at Silver $SLV

Silver is definitely lagging Gold on this break out.  One of them is giving a false signal.  In light of the Fed raising the discount rate and China reducing its demand for our debt.  We have an ugly 2nd half of 2010 setting up.  Fed anticipates withdrawing all of its stimulus by October 3rd 2010.  All of these things will reduce paper currency in the system and reintroduce deflationary forces.

If Silver can take out the high  it will probably run for miles...and to me that would signal the end of our currency.

The FED's New Time Bomb

A rising tide lifts all ships. It seems we are seeing something we have already seen before. Gold, stocks, Bonds are all rising in sync with one another as the US dollar takes a bath. The same lax monetary policy that fueled the stock bubble of the late 90s and the housing disaster just recently is in effect once again under the disguise of stimulus. Now with a 0% interest rate policy we have take Japan's place as a funding currency.

How many times can we make the same mistakes. It is inconceivable that a crisis created from too much debt would find a solution to the problem using, yup you guess it, even more debt. This is beyond asinine. Just look at Japan did it work? Absolutely not!

Bernanke has stated that the FED intends to withdraw its 2 Trillion plus dollars of stimulus from the US Bond Markets and MBS markets come October 3, 2010. That is literally D day if they actually follow through on this threat.... Yes I call it a "threat" because thats what it is.

They are filling the void left by the destruction of the shadow bank market and when and if they withdraw this support and if the original structure has not been restored there will be a vacuum created. That sucking sound you will hear will be the last breathe of life being sucked right out of this country's already strained financial system as Mortgage Back Securties and US Bonds tank and rates skyrocket.

US Dollar 2B or not 2B

Markets are sneaky so beware of the stop running 2B pattern that seems to be ridiculously persistent in the Forex market. The mainstream media has written of the US dollar and all but seal its doom in the minds of most investors.

With Pay Option Arm mortgages now posing a new mortgage threat and commercial mortgages running a close second the deflationary story persists.

Gold sits now at $1000 and Oz and gold fever is everywhere again. Lets not forget Silver is 25% away from its correlating high with GOLD. The dollar is still no where near its 2008 lows and many emerging market currencies fail to confirm an outright dollar collapse.

Seasonally speaking this is a critical time of year with many currencies, commodities, and indices are also at critical levels that warrant close surveillance. My bias is still on the side of deflation until the charts or the facts show me something else.

What is Natural Gas Telling US?

Natural Gas has not been acting right at all or has it? The persistent weakness in this commodity should be a clear sign of the deflationary pressures I have been speaking about.

It can only really be telling us one of two things.

One: Every asset class out there when looked at in terms of Nat Gas are completely overvalued.

Two: Nat Gas is the buy of the century.

Given analysis of other factors in the economy I would be inclined to go with option number 1. I will say I believe Nat Gas has indeed run too far too fast to the downside, but buying Natural Gas would only be a good idea if you where hedged correctly across the entire commodity complex and other asset classes as well. However I think it would be dangerous, as it has been, to attempt to bottom fish this commodity on pure price speculation.

Predictive Markets Part II

In the first article I was mainly focused on the the stock markets predictive powers according to conventional wisdom. Now lets take a look at GOLD when considering future inflation or deflation.

If you follow the pundits and experts today on mainstream TV you would be led to believe that $900-$1000 GOLD prices must be signaling inflation or hyperinflation going forward. Well lets think about that for a minute. If that was really true then what was $800 an ounce for GOLD signaling 27 years ago when it first happened? Surely it wouldn't have forecast an 18 year decline in the prices of GOLD and disinflation, but that's exactly what we got.

Now with prices high again the pundits are back and so is GOLD fever. I have learned time and time again the crowd never discovers buried treasure together and when everyone and there mothers are starring at that mythical pot of GOLD (excuse the pun) its probably not really there. As we are the counter party to private corporations and the Federal Reserve we are the source from which wealth is transferred from and not too.

If you look at the facts: Diminishing institutional lending capacity, reduced consumer credit, increasing savings rates, massive de-leveraging of the financial system as a whole, increasing reserve requirements, etc,... all of these things are 100% deflationary not inflationary. Although the FED has turned on the money spigot with its Quantitative Easing, it is replacing money in the system that is vanishing at a greater pace than they are creating due to the unwinding leverage in the financial system.

Lower consumption, lower consumer confidence, higher unemployment, low consumer spending, people are hoarding their dollars, combine that with reduce credit facilities and this all will translates into dollar shortage or dollar scarcity. None of the above is considered inflationary. Now the mainstream media is selling us on buying an asset that has risen in price over 300% in the last decade. When was the last time buying something after it rose 300% was a good idea? They usually call that missing the boat!!!

Don't believe there is dollar scarcity yet..... Take a look at California's predicament and tell me, what are they short of right now? They are about to issue IOU's....simply put they are short money.

The Super Regulator......

And there you have it. As I have said all along, the FED engineered a crisis and have come back to be our hero in our time of need.

It didn't not matter who became President, this was the only outcome that could have been.

"Give me control of a nation's money and I care not who makes her laws. " Mayer Amschel Rothschild

Bernanke a scholar of the great depression has just about full filled his mission to firmly entrench the Federal Reserve as the Alpha and the Omega when it comes to the UNITED STATES OF AMERICA.

Tim Geitner the former President of the New York FED is now the Treasury Secretary who is the one selling this scam to Congress. Congress will put on a show as if they don't like the idea.....but watch they will still approve this Hydra's power mad ambitions and The Federal Reserve (private bank) will inherit the USA lock stock and barrel.

At first I was amazed at the ease of how quickly they moved this plan along....then I did some people watching. Since the whole damn country is asleep or oblivious there hasn't been anyone to stand in thier way. This was literally like taking candy from a baby.

SIMPLIFIED STEPS TO CONQUER THE NATION:

1. Increase the FED FUNDS Rate 17 times during a debt boom

2. Have George Bush close the Bankruptcy window (Signed in April 2005)and trap Americans in record debts (In effect October 2005)

3. De-leverage (Crash) the commercial banking system, lower rates to save us from a banking crisis they created

4. Transfer trillions of dollars worth of private debt onto the shoulders of the public at interest to the FED with bailouts we believe we need

5. Have the FED put in charge of everything on both sides of the equation to protect us from the crisis they manufactured to ensure our safety.....GAME SET MATCH.

(If I do say so myself this was masterfully played)

Its a bloody disgrace that 300 million people could sit on there asses and let this happen right in front of them and be so easily deceived about the realities. But you all are so mad about Kaley Anthony or Scott Peterson....How did the media bamboozle all of you so easily? Did any of you notice the media cooperatively blankets the TV with garbage news when this would be the most pressing issue to us all. The problem is power is colluding to close all the channels you could learn from, and if no one asks questions....well then you will get no answers will you?

It took me an hour or two of my spare time to piece it together and make this prediction. It should be very worrisome I was able to get it right. This was supposed to be a surprise to everyone.....do I seem very surprised to you? I am not Nostradamus so that means there was an agenda they were executing.....An agenda very crooked wealthy people tend to follow when they want more power and need to trick it out of others.

Its called Problem, Reaction, and Solution. And the entire country just bought it again for the umpteenth time in a row. I would say wake up...but perhaps our country is better off in the hands of people who are already awake.

Think about this: A man or men with a billion dollars or more would never let a pauper make his decision for him. If you still believe in voting have fun. Lord knows George Bush was laughing when he took power, but Iran has the crooked elections right? They are all crooked no one who has power has it by chance. We are in a top down society not the other way around. The best slaves are the ones who don't know they are enslaved. Your media is lying to you.