| |
Counterfeit Credit And It's Aftermath
|
|
|
Serial robberies of our national treasury conducted by the Federal Reserve, U.S. Treasury, international central bankers, and most particularly the New York Global Banksters have created a hole from which there is no escape. Now we hear these crazy dudes talking openly about NOT backing the F&F Frannie & Freddie Debacle. They prematurely shot their big mouths off saying they simply had to cover or we all fall down. Guess what? Cover or not and we are all going to fall down anyway. They better hurry as indecision on something this huge and dramatic produces equally legendary results.
Our new cycle work tells us we should be expecting some extreme market excitement between September 15 and 19. The two most critical days appear to be the 17th and 18th. If our timing is correct, the following week could be the trading week from hell or heaven, depending upon what you own.
We warned months ago in Trader Tracks that the last quarter of 2008 would be “Tumble-Down-Dee” time for China, Japan, Europe and parts of North America. Now we see it in spades. Canada has been holding-up rather well, especially in the western provinces with economies based upon mining, agriculture and energy. However, Ontario is beginning to suffer with heavy commerce and industry investment tied to US customers.
The larger problem is a marked slowing in Japan and an even faster one in China; post-Olympics. Consider this: Why is China now using new debt in prodigious amounts after collecting trillions in sales from other nations, most particularly the USA? Why has their stock market been cut in half or worse? Why are some American manufacturers after doing some new math deciding to pull the plug on China and move their manufacturing operations back to the southern US or Mexico? Since China is holding nearly a trillion in American currency, notes, bonds and bills, is this having a deleterious effect on their economic stature? Is it their increasing unemployment? Is it the electric power shortages and rampant pollution? We think these are problems faced in most modern western societies in varying amounts. While they have a China impact, we would suggest the old economic rules of supply, demand, credit, and customers are the real recessionary culprits.
Some would blame the command-controlled China banks as being too communistic or socialistically operated to effectively manage a capitalistic-style enterprise over time. This can be part of it, of course, but their primary problem, as demonstrated through years of history is plainly an over abundance of credit and an economy gone wild on the growth-inflationary side.
New York saw a fantastic opportunity to raise US capital and invest it in China with a cost/profit/cycle time equation bar none. Billions were loaned, and more billions invested in capital structures, infrastructures, and energy at breakneck speed. With this kind of scenario imposed upon a hard-working populace but not guided using strong professional business management and finance controls, we’re getting an eruption-reaction of dangerous proportions.
Will China crash and vanish? No, they will not. However, previous historic economic exercises taken to rabid extremes all blow-up and diminish back to reasonable “new beginning price/profit returns,” resurrected on more sound foundations. This excitement takes years to play out and as it’s so slow from start to finish, analysts and observers tend to get confused and lost in the middle.
Where Are We Now?
China, Japan and Korea operate a fantastic production machine using cheap labor, hard work ethic, lots of credit and a mindset to deliver the goods at all costs. This is great stuff as long as your customers not only have the desire to buy but the credit to make all those billions in new purchases.
Foolish, spoiled consumers in the US and elsewhere have run out of easy credit and worst of all are losing their jobs and their homes at the same time. The capability to keep buying on credit has stalled and in many cases plainly stopped. The national American homebuilders are crushed and see no recovery for years despite their corporate public relations nonsense. Related employment throughout the real estate industry has died with those builders and further migrated into used homes drowned under speculative credit terms. Those easy loans in hindsight seem extravagantly foolish but those in the middle of this game were all too happy to scoop up the interest, points, broker fees and massive dollar sales profits. The game is over.
With the US economy on its knees, Asia and Europe have followed. The smaller dimensions of those foreign markets and their lack of experience in USA type market-rigging finesse ensures their quicker and perhaps harder fall from grace. The US permitted “fixing artificial interest rates-terms” and allowed New York to engage in massive Counterfeit Credit, using a laundry list of derivatives. This puts them at the head of the line for economic malpractice. Their attitude is who cares? They’ve situated themselves into the category of “Too Big To Fail” so the buyers, consumers and taxpayers take a double robbery. First they meltdown under initial illegal lending and then pay again to clean it up.
Failed Tulipmania, The South Sea Bubble, and our Roaring Twenties shares and real estate adventures all concluded the same way-with one giant thud.
This Time It’s Different. This Time It’s The Same
Progress has changed the world since those previous market dramas. But, now we have some new twists making our current events all the more dangerous. In today’s troubles we see new things of great importance that stand out:
- Energy shortages and the international struggle for oil and gas have changed the dynamics of societies world-wide. Our wise Northern Advisor told me the winner in this global battle will eventually control the world from several dominant positions. For now, it seems the USA and Russia are leading the pack in that race.
- Computers and the internet move data, news, trading, and politics with the speed of light. Reactions that previously took days, weeks or months are now nearly instantaneous.
- A wise old lady I knew in my early years predicted all this self-imposed giddy-up and hurry-up would fill the insane asylums to a degree thought impossible. While we do not have numbers nor do we follow that stuff, signs of societal pressures abound. Working mothers, from our observation are suffering the most.
- Another sign of these pressures is the addiction by business people, especially those that travel, who feel helpless unless wired-packaged with numerous electronic devices, phones, earpieces, and berries of all kinds. I was talking to a guy in the airport who was staring right at me but not hearing anything. When he finally came-too I asked him what he would do if he ever experienced a giant on-body power failure. The response cannot be printed.
While some of this stuff is crazy and humorous, much of it is not-it’s insidious. With an ever faster, hyped-up world, international greed for energy, and flagrant electronic atmosphere, we would suggest these all contribute to the forthcoming crack-up boom.
Credit domestically and internationally is just shot. USA homebuyers must be nearly perfect to get a mortgage. With all their crazy extravagance over recent years how many consumers do you suppose have perfect credit? How many smashed banks, despite collecting millions from our government to stay afloat are willing to lend?
Our basic production systems and their companion buying-selling apparatus are busted. We are not only in an unacknowledged recession but about to embark upon the mother of all depressions. You can be certain those lending cretins will disguise these serious problems to the best of their mutually deceptive ability, prolong D-Day and pick the pockets of traders and investors all the way to the markets’ bottom.
Our job as good traders and investors is to preserve capital, find a way to trade with risk controls and not get run-over in bad markets. Technically, we see cycle set-ups for futures and some commodities for long positions. Commodities directly tied to commerce and industry are going soft and ought to sell even more. The best opportunities are with gold, silver, platinum, diamonds, energy and agriculture.
Some of these markets are easier to trade than others. While Trader Tracks presently prefers nine trading markets for shares and futures, we expect to cut the list back and focus more on gold, silver, and currencies. Some of our others will continue to be utilized but a stronger focus is better.
Prepare For Slow Trading From Today Through September 5th. On September 8th We Forecast Our Markets To Rally Full Blast .
- India and Asia are buying gold heavily for the jewelry season. Physical gold is in short supply causing these buyers to pay premiums above the spot prices.
- The USA Dollar rally is over and is preparing to trade sideways to down. Other western currencies are seeing similar weakness. The long term dollar cycle will sink further.
- Gold and silver are technically oversold but remain within the parameters of a longer term bull market.
- There are few places to initiate new trades with stronger upside gains. Precious metals are perceived to be one of the very few bull markets with major opportunities ahead.
Watch for new rallies in most all commodities markets. Now it’s time to buy. Our late summer precious metals haircut is over. The only action to prevent selling is our stunningly time-worthy Plunge Protection Team who had multiple recent failures propping shares. Will they win during the fall push-‘em--up event? With the election silliness underway the PPT will prop shares. We think with September market dangers they will prop their little hearts out and not permit the Dow and S&P 500 to get out of control; but it will sell somewhat. In our newsletter, Trader Tracks, we provide weekly guidance and extra e-mail alerts to report our best new trades and offer suggestions for trade management. Visit our website at webeatthestreet.com for more information on our spectacular futures and commodities trading record.
Whatever you do, make a concerted effort to stay with the trend and hang onto your core holdings of preferred shares, cash, and coins. Physical gold should never be sold or, traded but rather accumulated steadily on a monthly savings plan and squirreled away. Should you be having difficulty buying physical metals on new orders, we suggest placing an order and being patient. Big traders are always ready to buy on the dips and normally never sell their gold and silver. You would be amazed how quickly your physical gold and silver will accumulate using this strategy. - Traderrog
Roger Wiegand
Editor Trader Tracks Newsletter
& The Rog Blog at webeatthestreet.com
****
Roger Wiegand is Editor of Trader Tracks Newsletter for gold, silver and energy traders. Roger provides recommendations for short and longer term traditional stock shares, futures and commodities trading with specifics for individual trades. See webeatthestreet.com for more information
Contact Claudio Bassi, at Trader Tracks New York City publishing offices for a free 30-day trial subscription 718-457-1426 Monday through Friday, 9:00am to 5pm or, e-mail Claudio at cbassi@miningstocks.com
|
