Mar 4 2010 4:30PM
Primal Screams And Broken Dreams
The herd has been through a nasty wringer of drastic social and markets’ events since the fall of Lehman. (1) First we experienced pure naked fear as few knew what to expect other than the worst. (2) Next, with crashing markets and broken banks those in the know were in a pure panic as they had the misfortune to understand what could really happen. (3) Then, bankers and their house pet Federal Reserve fought openly with finger-pointing politicians (4) This was followed by Lehman’s demise and the imposition of TARP. (5) After the take-over of GM and Chrysler and the crooked pay-offs to big busted banks using AIG as a cash funnel, public anger rose significantly. It’s still rising and nearing the boiling point. (6) Criminal political-authorities-bankers-cabal gang members involved are so pleased with how this scam has worked, they are doing it all over again.
Central and global bankers with their politician partners have now seized control of entire nations. Taxpayers have been victims of the largest robbery ever in history and it’s not over yet. There is no going back and “no new normal” returning to the old paradigm recovery. They would like you to believe this but we say no way. The world is permanently changed forever.
This is a new era as we have been irrevocably destroyed.
Millions of citizens throughout the world have lost everything they’ve worked and saved for during their entire lives. This economic terrorism, on a positive note, will take down the instigators as they’ve wrecked what they have stolen to gain power and control. We wish no one ill will and are not vindictive, however no tears will be shed in my house when these paper billionaires go the poor house or worse.
Fiat money and central banking is headed for supreme wreckage. It may not happen in a flash but rather in fits and starts as pieces fall off and this crappy on-going game of international global theft is destroyed. The primary reason is these crooks have destroyed the system they’ve used to steal. They wrecked their own tools and sources for robbery.
In America, it began when the Federal Reserve was born in 1913 in a foolish reaction to install systemic controls after the New York Panic of 1907. From that day forward, the US Dollar has been on glide path of slow destruction from the imposition of inflation, sloth, theft, and waste.
Those creeps with their fingers on the printing press simply cannot control themselves. They are in the political business to buy votes for power. By printing cash and giving it away through a host of freebies they instill voter loyalty. There are no other reasons or legitimate agendas. For those that did not believe this or could understand their subterfuge and crooked games, the current administration has certainly made the mess to be understood very clearly.
How would you have liked to have been John McCain in that recent health care summit meeting having to sit there and be rudely lectured to by a 48 year old, smart-mouthed kid with no experience and starry-eyed grand schemes of socio-communistic power? If you do not understand that this man is very dangerous you are not paying attention.
My worry is I can see our enemies view the US president as an easy mark and one to be manipulated. He is a weak sister and not to be trusted. I am not picking on one particular political party. From my point of view, they all stink. Some stink worse than others but your-well-being is not at the head of their to-do lists.
Make no mistake there are power-hungry people in all political parties. They sternly believe their very existence is designed to take your money, decide how to spend it and slam you with punitive rules should you fail to agree and, or snap into line. If you disagree you could be fined and could be arrested. The end is nigh and they are going to get a very rude awakening. We wish them the worst. They have earned it.
I have read a lot of history and because of my work am intensely interested in economic history. The same things happen over and over again as human nature and psychology remain the same. Very serious and repetitive monetary mistakes are made easily and often as the human age spread widens between K-Wave Depressions into several generations. Not too many experienced bright people remain alive today who were economically hammered as adults in the 1930’s.
Consequently, we continue to make the identical mistakes under identical circumstances. Its lots easier for politicians to do the wrong things as the shorter term pain of doing the right things hurts too much and of course gets you tossed out of office. Expect more of the same until they have lost all power and credit.
What do we get for the balance of 2010?
“The Spring Coming-Out Party Of Realism.”
What we have today is a handful of major power-player countries that exercised their will upon others to the extent they have (1) burned out their national treasuries (2) created an immoral political and social climate (3) driven their populations to the poor house (4) destroyed any realistic semblance of an economy (5) loaded-up their nations with an un-payable mountain of debts (6) and instigated a host of messy social problems lasting over three or four generations.
This kind of crash and burn damage is not repaired overnight and many times it cannot be fixed peacefully as in the USA instance of the 1930’s.
Countries that did not gain a higher standard of living before this mess are better adapted to withstand what lies ahead. In other words these people didn’t have as much to lose in the first place so they are socially trained to get by on much less. That is simply not the case in the United States with its higher living standards and over-zealous expectations. Spoiled brats in the US are truly going to attend and endure a negative religious experience of the highest order. This one is going to be a rude awakening of the worst sort. Many will not cope and simply die.
At the beginning of this discussion I summarized six key points taking us to the next cyclic event, which I shall call a “Spring Coming-Out Party Of Realism.”
Between May, 2010, and July, 2010, we see a convergence of several negative events arriving to smash the markets, the banks, and the Sheeple.
These are: (1) $40 billion in credit card losses will be reported by lenders. (2) Global banks will be entering another nasty credit cycle (3) Auto sales, which are normally mostly produced in the first five months of the year will be awful. (4) REIT’s and other commercial real estate foreclosures and bankruptcies will escalate. (5) The FDIC is going to have to swallow and pay-cover $1 Trillion in failed bank and savings and loan deposits. (6) Fannie and Freddie (already bankrupt) have been given an open checkbook to buy all the outstanding residential crappy paper out there for the next three years.
This means the F&F’s are a dumping ground for all the bad residential real estate paper. At the appropriate moment when this trash is basically gathered and backed by the government (read taxpayers), authorities will push the handle and it all goes down the bowl. Presto! all of those real estate problems are solved; written-off so to speak.
Importantly, most of these events are all reported within that 90 day window (May-July, 2010), which just happens to fall right on “Sell In May And Go Away.” Think this isn’t going to be exciting?
Hunker In The Bunker
Between now, March 4, and the peak in stock prices, we are busy trading and recommending shares investing to buy in the current rallies. This week is slow as investors are waiting for the phony jobs report coming out tomorrow on Friday. You can be sure the dimwit pols and their minions over at the Labor Department will shake and bake those jobs numbers to share-buying perfection.
And if that isn’t enough, The Plunge Protection Team S&P Buying Hit Squad will pump buying on Sunday evening (under cover of late night darkness) or early Monday morning before the open. These dudes and dudettes are not going to miss stealing more and selling into strength while scooping-up big sales commissions.
When the selling and shorting arrives this spring-time, we think it could be legendary. And if this disaster is not deep enough nor bad enough, the game could be extended into those other serious selling bailout months of September and October this fall.
Real unemployment is going-off the charts. Flint and Detroit in Michigan have 50% unemployment. California, (the main one to watch for disaster cycle leadership) cannot be measured but you can be certain its at least double what Sacramento is telling us. The Terminator is $24 Billion in the hole and he keeps digging right along side his enablers.
Twenty million people collected unemployment checks in 2009. The official claim was 10% jobless when the actual was more like 24%. Twenty-five states have paid out all the money they have in their unemployment funds. The Federal Government has already paid many more billions in loans to those states to cover. It’s going to get a lot worse.
The Labor Department officially forecasts 40 states will borrow $90 Billion for un-employment by 2012. As per usual, doubling that number to $180 Billion is more realistic. Puerto Rico has had 25% of its population on USDA food stamps for generations. It’s getting worse.
GM is on its third bailout and the current auto czar operating that bankrupt company just relegated their best car guy to “Advisor.” That would be Bob Lutz who is retiring May 1, 2010. Government Motors continues to screw-up making more tragic errors. Somebody needs to throw the dirt over them and end their misery.
One good easy measure of these disasters is counting the Wall Street Journal’s number of posted lawsuit pages. It’s growing exponentially.
In Arizona, very hard hit by unemployment and falling real estate prices (-30% valuations), the Mayo Clinic has stopped treating Medicare patients and 3,000 people have to go to cash only. When the Congressional Reconciliation Vote (now there’s an oxymoron) is completed and Obama-maniac Healthless Care is invoked, the number of practicing doctors will skid lower as they retire and leave the country for better opportunity. Would you remain a US doctor being open to unbridled lawsuits and government pushback taking your compensation and telling you how to practice? I sure wouldn’t. Its not only illegal but unethical for the patients wellness and the doctors.
This doctor shortage will be a double whammy. (1) 30 million more non-paying, non-insured indigents are dumped onto the system for “free care” in the middle of a doctor shortage. (2) Then with a system already very short on skilled professionals, many of those practicing today will retire or leave. How is that supposed to work?
Ms. Pelousy is determined to pass health care, cap and trade, while gathering in millions more votes by giving freebies to the jobless and minimum wage people. Next she plans to invoke a new Value Added Tax (think stealth) VAT into the system to raise-steal billions more from taxpayers corporations. Understand tax collections are off 30% and falling like a rock. Unemployed people cannot pay taxes if they have no job. States have to balance books so they go down first. The Federal Government does not have to balance so they have more staying power printing valueless cash and bonds.
Pelousy’s next biggie is her plan to steal-convert private pensions to government managed pensions as this is the last big plum in the overall political robbery scheme. This means taking your pension savings and converting them to US paper. I think she learned this one from Mrs. Kirchner in South America. They are in the midst of self-destruction too, but just further down the track toward oblivion.
With all of these disasters of course Americans are busily engaged in their favorite in-door sport of lawsuits. The New York Times says there are 4.7 million cases backed-up in the courts with the pile growing by the hour. That would be either New York City or the entire state we are not sure which. It could be just the city knowing what we know.
Our “Hope and Change” president with his “Crash and Burn” game plan has managed to make millions of our citizens furious on health care they do not want. Others are wondering if he has a patriotic heart pandering to the Middle Eastern crowd and back-pedaling against Israel. We have two wars going full bore and in our view we can expect more in several new locations. The Iraq war seems to be a daisy chain moving from Iraq to Afghanistan to Pakistan. What’s next India next door?
We forecast a long hot summer in the urban streets of America. Despite massive food stamps’ aid and federal unemployment back-up for the state funds, the process will be woefully short of effectiveness. In our view, for every family or individual person getting some help, there are that many more who need it and are not qualified, or who have failed to apply. This is going to be a major disaster and portions of the largest cities will have riots, fires and go out of control.
While many are openly worried about a crash in China, Japan is much further down the road to perdition. We’ve seen reports about a possible Yen collapse and their political discussions are more heated than in many years. There is major disagreement about economic policy and we think this is unresolved as matters are coming to a head. The bankruptcy of JAL airlines was a wake-up call but there are more serious things on the front burner. When a nation must pay national pensions from their own bond sales something is very wrong.
Japan’s GDP versus debt is about 2.5 times worse than in the U.S. and ours is really nasty. Moody’s rating service once criticized and burned in the Lehman aftermath in the U.S. is not about to get nailed again. They have been busy working on a Japanese S&P downgrade and it could be implemented at any time. Since their economy is right near the top of the global pile that would be a shocker to markets.
We could go on and on with bad stuff but think it would better serve our readers to review things that directly affect them and offer ideas as to what they can do to protect home and family while earning some money. If the U.S. has a bank holiday or a bank run; or perhaps a U.S. Dollar devaluation, the fallout would be legendary. If something like this starts, you will not have time to install a shield and would just be another victim on the train tracks.
Here is a quick list of things to help.
- Pay off your debts to the extent possible.
- Cut your losses on debts owed to you. Take less or write them off.
- Have 30-90 days cash in the house in hand and in your vehicle.
- Larger cash deposits can be invested in gold-backed depositories or the Canadian Dollar ETF.
- Have a bag of junk silver (90% silver content pre-1964) for spending money.
- Some have stocked-up on liquor and cigarettes for trading and barter.
- Own at least 10% of your portfolio in physical gold; coins preferred.
- Own a pick-up truck or a car and utility trailer.
- Hold stored personal daily needs items in your home. Thirty days worth
is mandatory and 6-12 months is better. You have security, savings on prices
and you will need no shopping in an emergency. Inflation is coming this year.
- Grid failures are becoming more common. A standby generator is handy to run
demand for a short while but a whole house propane generator is better if you can afford it.
- Store water for 30 days needs. Have ways to filter it and obtain another source from your normal connections.
- The best way for most consumers to deal with a potential temporary “moneyless” society is to have the stuff you need in advance and plan for an extended hiatus.
- First easy solution: If you don’t have stuff to steal including money, stocks, and other paper assets, you cannot lose them. Out of sight out of mind.
- Retirement accounts in foreign nations should be ok especially backed by gold.
- Security is always a problem but there are several ways to manage this and we won’t discuss them in this essay. You do not need guns if you are inventive and creative.
- Transportation could get troublesome if fuel is difficult to obtain. Being in the right location can avoid the need for longer trips. Small towns with all their convenience (walking distance) would be excellent.
- Bikes, motorcycles, and old trucks are excellent. The Amish use horses for most everything.
- Energy needs can be kerosene lamps, coal and wood for heat back-up and propane for a variety of things including off-the-grid propane refrigerators and freezers.
- Have a garden, learn to can food and learn to trade. Quality is better than in stores.
- Do not count on any municipal services for anything. They are going broke.
- Telephones and the internet could get interrupted and mail could stop for awhile.
- Food stores have 7-10 days inventory before they are shut-down if not replenished. Plan ahead. Farmers markets are great fun and have cleaner, higher quality food.
- Forget using credit cards. As long as possible, use cash or a low limit debit card on a regular basis. Utility bills can be paid at retail stores in cash. No checks are needed.
- While the advantages of paying bills on-line are many, we do not do it and do not bank on-line for security reasons. In rough times the scammers multiply in the dark.
- Keeping a strong positive attitude is essential. Despite some problems ahead, we plan to be not only comfortable and safe but to earn a good living. This mess shall pass and life goes on. Just do not be an in-convenienced victim because of not being prepared. Start slowly but start today. It won’t take you long to be fully prepared.
Our guesstimate for a nasty event is this spring or later, but you never know for sure.
One of two top gold and silver trading cycles is now open for business.
While the first and second quarters’ precious metals cycles were tardy, get busy and get investing and trading. We forecast a stronger upside for the next 4-8 weeks followed by some short selling on the obvious forthcoming mainstream failures in credit and banks.
Traders and investors should be buying physical 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 12-15% per year. It’s not going to stop any time soon. In fact, we predict those annual percentages will rise even more and this a chance arriving usually 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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