Apr 15 2010 4:23PM
Have No Fear But Get Prepared
Now, as we enter Phase Two of our years’ long precious metals rally, markets get hotter and more irrational. More than ever before, trading speeds increase, global governments flail at their massive failures and ever crazier stuff hits the news and our markets. To get through this melee without personal disasters, keep your mind clear and hold firm to your trading and investing plans. Hard assets and no debts is the right path.
Over the past decade, gold prices are up an average of 15% per year confirming that the longer trend remains in place. At a recent Calgary Canada Resource Conference we heard a top analyst tell us gold is up 34% within the past twelve months. It is obvious a game-changer is now in progress. Many new questions are being asked to enable more accurate trading and investing.
We think the key to most answers can be found in the vacant minds-heads of those global bankers’ and within the tiny IQ scope of these junior, elementary, genetic mistakes running our governments, central banks, and the Federal Reserve.
Our kid president has jumped into new and very dangerous diplomatic waters by bowing to Russia on nuclear matters, being wish-washy on Middle Eastern mayhem and denying Israel a place at the table. This inexperienced child leader is making nice to our enemies in hopes of persuading them to see his agenda. Foreign reaction is to laugh in his face and consider the USA a paper tiger taking full advantage using any methods possible criminal or otherwise.
We suspect the recent Polish air disaster wiping out that government was not an accident. We can guess who was behind it but you can figure it out yourself if you understand who benefits most. Quite obvious isn’t it?
What does this mean for precious metals, the general markets and international credit?
A clear path is open if we can surmise what these evildoers want and see how they intend to proceed. Let’s review these keys points:
Russia is on the prowl for foreign investment cash as they are broke with the exception of their oil and gas sales, which have been down in the global depression. Answer: Steal, buy and control more energy to become the global energy king of the world. He who holds this power is the ultimate winner. If you think your shares in investments in Russia are safe I’ve got a bridge to sell you.
Iraq is all about control of oil and the largest energy users want in the game to the best extent possible. Iraq and Iran with joint borders hold 4 of 6 of the largest known oil pools-reserves. That is what that fight is all about. The big oil men and their governments are not leaving and they will fight to get more.
Afghanistan is a tar-pit of despair. How can any outsider win when both sides on the local team are into poppy growing, bribes and violence forever?
Some of the best allies the USA has today, intend to leave these current war messes-yesterday. Pakistan has a nuclear-ready arsenal complete with flyable rockets for delivery. Think that naughty stuff is safe for now? We don’t.
In Europe, Obama has pulled back the nuclear shield signaling to Europeans “You are on your own.” Further, these nations are sick and tired of fighting in US military adventures as allies and partners. They simply cannot afford it and clearly understand its folly.
As the ugly reality of economic destruction spreads throughout the world, it’s every man, woman and nation for themselves. For example, Israel understands they will get no help from Obama regarding Iran aggression. Now that the news is out Iran is nuclear ready by August 1, Israel must deal with this problem by themselves and, they will deal with it.
Imperious idiots in Washington, New York and within other financial capitals of the world are intent on keeping the game in play by kicking the can down the road. We’ve got news for them-the can hit the wall and is coming back at them with full force in bond markets.
That full force is a rapidly decaying bond market sinking beneath its own weight throughout international bond land. It is obvious and clear economic ministers and their liberal minions are pushing and shoving to dump debts on others but those others are doing the same. Each is striving to sell their paper to outsiders while continuing to sell products one neither wants nor can afford. This is an economic circle of failure.
As the Bernanke circus continues to print bonds, bills and notes they have suddenly discovered they must increasingly buy back their own crap at the auctions where there are fewer takers and suddenly no takers? Who will finance international debts?
We smell panic in bond-auction-land and it has become every increasingly more strident and frightful. The Pimco boyz are shedding US paper and were recently prowling in Aussie land as they have the good sense to raise interest rates trying to get a lid on this nonsense. However, their larger dilemma (Pimco’s) is trying to place multi-billions in a market offering fewer places to go. At least places that just might return your capital and not dissipate it down some stupid rat hole.
Asia is beginning to the feel the international pain as their customers are going broke or are already broke. The lifeblood of China, Japan and Korea along with their neighbors is to make stuff and sell it overseas. Problem now is the overseas countries are out of buyers and out of credit. Oh Oh.
Inflation in China is running hot at 15%. Hong Kong real estate prices are up 23% so far in 2010 and the year is not even half over. To their credit, new China rules demand less leverage, higher down payments and face new curtailment on usable building land. Despite these new controls, the horse is out the inflation barn and he is running full tilt.
Japanese companies are losing customers, have too may retirees and not enough children coming along to take their places on employment rolls to become productive. Since Japan does not finance their government overseas, most all of their bonds are sold internally to the heavier savers within that nation. Now, however, their paper pile is out of control and is reported to be 2.5 times larger (adjusted for size) than a busted USA. Wow!
This simply cannot last and a truly religious experience is to be the end result. It will not be pretty.
Korea has grown considerably but also rose on the backs of credit and paper piles. They too are losing foreign customers and things are slowing down.
In Europe, the situation is not just worse it has turned dire. Germany is the last man standing and all their Euroland neighbors want handouts from Berlin. Greece is first in line and they were initially refused. However, it was reported this week that Germany’s Mrs. Merkle caved into immense Euro-banker pressure and will go along with the Greek-IMF bailout. This major mistake opens the money door for other busted Eurolanders like Spain (24 times the monetary damage of Greece), along with Portugal, Italy and a few others.
Ireland fell down so hard they went negative -12% GDP and taxpayers are on the hook for multiple billions they do not have.
In the U.K. Mr. Gordon Brown, the world’s champion liberal giveaway artist after Obama, who is the International King by far, has wasted $5 Billion in British gold holdings and continues to prop Zombie companies and banks. Brownie intends to exaggerate the situation with more of the same. His solution for being in the hole is to keep digging. The U.K. appears to be committing economic suicide just as in Obama-land.
None of these fools have the courage to stop it and make central bankers behave. The can kicking syndrome remains on page one and its going to be a global disaster.
In South America, Hugo Chavez has literally destroyed his country and is partnering with Putin and other commies to arm all the rebels within the southern hemisphere. He is particularly encouraging the really Bad Boyz, engaged in Mexican pharmaceutical sales, to take over that government and spread disaster into the southern USA. He is winning.
Meanwhile, our kid prez is planning to open the Mexican border to all comers and hand over USA citizenship to 12 million Mexican illegals, now in the US to garner votes using his welfare powers.
Our point in this discussion encourages the purchase of hard assets for personal protection including gold and silver coins, cash investment into the best remaining currencies (temporarily for the intermediate term) and steps to protect your wealth by debt elimination and a drastic reduction in spending. Savers and those with a maintained depression income will be winners. We are entering a lost decade.
Those living on credit cards, and a house of debts, and in danger of losing employment, will pay the price.
Now, more than ever, it is important to take the immediate necessary precautions to protect yourself and your families and friends.
Traders and investors should be buying precious metals and shares right now. In our newsletter we have a great list of trading and investing ideas for you. Meanwhile, you can never go wrong buying physical precious metals and holding them for security. We’ve had a constant run of nearly ten years in gold rising 15% per year so this remains a good trade.
It’s not going to stop any time soon. In fact, we predict those annual percentages will rise even more and this offers a chance, arriving only once in 25 years on the cycles. Good trading! -Traderrog
Editor Trader Tracks Newsletter
The Jay & 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
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