Oct 18 2010 4:07PM

Benny Tosses Bond Cash On The Fires Of Deflation

Europe Stops Spending And Moves Toward Saving.

Most of the world has stopped spending. The USA continues to accelerate with futile pump priming. Result: As the American dollar weakens on over-printing, what does this do to those installing new and severe austerity reforms in Europe and other nations? This is not going to end well at all. Could QE2 smash the system in 2011? Maybe.

Our pathetic Washington administration including most members of congress and the White House have badly failed the American people. The international spillover from their mistakes now threatens to implode the entire world’s economic system of currencies and trade. The US Dollar is going weaker while inflation ramps up.

We are not saying other countries or the GOP have clean hands either, but the root of this mess emanates from the American Capitol and New York global banks. The IMF, World Bank, United Nations, most central bankers and their One-Worlder buddies are playing the same tune in concert. Now that currency and trade disruptions popped-up, we envision a race to the bottom a la Smoot-Hawley Tariffs, price controls and higher taxes.

Our top advisor has named most of these people psychopaths for their permanently disabled minds. They have a serious personality disorder, “Especially one manifested in aggressively antisocial behavior.” He suggests these people are particularly drawn to positions of power as they exhibit as the dictionary says, “Any severe mental disorder, with or without organic damage, characterized by a deterioration of normal functioning, and intellectual and social functioning by a complete withdrawal from reality.”

For New Results And A Better Outcome We Suggest They Stop Digging.


Here we see a derelict steam shovel in Alaska; major components visible include boiler, water tank, winch, main engine, boom, dipper stick, crowd engine, wheels and bucket.

This resembles the derelict, congressional political machine. Worn out, busted and broke, these politcal gangsters need a trip to dad’s woodshed or the psychiatrist’s couch. Their American Charter is supposed to be Defend the Nation and Operate The US Treasury. All the rest is just noise and waste. They have failed on all counts and its getting much worse.  Are you sleeping well these days trusting America to Nutcases?



Expect More Expensive Social Programs With No Way To Pay For Them.

FDR’s Social Programs Birthed USA’s Decades’ Long Welfare Wasting Messes. While we disagree with most of FDR’s 1930’s policies, the WPA and PWA employed hundreds of thousands of jobless men who worked, did not steal to live, and sent money home to feedfamilies. If FDR did one good thing in his administration, this was probably it.


Public Works Administration (PWA) project plaque, using the name Federal Emergency Administration of Public Works, on a city hall in Minnesota.

“The Public Works Administration (PWA) was a New Deal agency in the United States headed by Secretary of the Interior, Harold L. Ickes. It was created by the National Industrial Recovery Act in June, 1933 in response to the Great Depression. It concentrated on the construction of large-scale public works such as dams and bridges, with the goal of providing employment, stabilizing purchasing power, and contributing to a revival of American industry. Most of the spending came in two waves in 1933-35, and again in 1938. The PWA was closed in 1939.”

“The PWA spent over $6 billion, and, its defenders claim, helped to push industry back toward pre-Depression levels. It lowered unemployment and created an infrastructure that generated local pride in the 1930s that remains vital seven decades later. It was much less controversial than its rival agency the Works Progress Administration (WPA), which focused on hiring the unemployed.”  -Wikopedia

Latest Developments Expose Acceleration Toward A Monster Crash.

We got the word this week the President is withdrawing from managing America as he is clueless to do anything positive within the framework of his congressional mandate of Health Care, Cap Trade, TARP, and let’s pretend job creation. Most of his time is spent, we are told, watching football on ESPN, playing golf, and re-appointing advisors through the White House Revolving Door. The WSJ today, said, “Democratic Funding Fades.”

His latest response is to go politicking with JoeThe Sheriff” Biden. What a lovely pair those two make. Both are screaming at their political enemies, flaying at the world for their own disastrous failures, while blaming others for their personal ineptness. Meanwhile, our beloved nation dangles in the wind with no leadership.

The political trash has left Washington with no budget in place to go off and chase votes. The fiscal health of America lies in smoking wreckage as these village idiots are busy trying to elect each other for “All fine things they have accomplished.”

They are basically ignoring the War on Terror just as it get worse, and provide little or no support to our troops.

They are leaving the Mexican-USA border wide open to illegal immigrants as Hugo Chavez imports criminals from Syria. Ol’ Hugo is running one transport a week into Mexico from Syria via Caracas and providing them guns.

Their lackeys, minions and destructive partners in political crime have mostly jumped ship. Those boys and girls know a Titanic Political Machine when they see one. Further, methinks they would rather not be in the gun sights of the next Attorney General’s office. Expect more vermin to go over the side before the SS Obama sinks for good. With some good luck and the GOP winning the House, we’ll get two years of blissful gridlock. No damage done if they are unable to pass any more socialistic rules and money grabs.

The Presidents new economic team is at odds with our beloved leader trying to persuade him to do the right things, to no avail. Watch for more Obama administration newbies to dive over the side and run for cover. Frick and Frack, our dynamic economic duo team of Timmy and Benny are busy printing counterfeit currency and bonds (counterfeit to the extent there is no real asset backing). Frick is busy antagonizing the Chinese to raise their currency’s value and ruin their economy; while pleading with them to buy more toxic USA paper. If that isn’t psycho what is? Is the new QE2 $500B or $1 Trillion?  No matter we know the ugly ending.

Mrs. Merkle in Germany is putting that nation on an austerity diet plan and this does not fit with BO’s social give-away schemes so Frick is wailing about that one too. Most of Europe cannot believe what is coming out of Washington and are taking serious steps to back-away from USA power and its interests. Notice moves in Japan to protect them selves economically and arrange for their defense against North Korea and other regional thugs.

What do the world’s leaders think of all this? They now view the USA as moving toward the third world. Further, it provides our worst enemies and of course some friends, with an astounding chance to enhance the crisis and take full advantage as Mr. Rham Emanuel (now departed) offers. We can just see Mr. Putin licking his chops and laughing at the “Kid” in the White House who’s pretending to be a world leader.

Meanwhile, in the Middle East, Iran continues to make nuclear bombs, Israel is tossed under the bus, Iraq returns to its old ways and Afghanistan-Pakistan goes rogue and scary. BO, of course not being interested in conflict and unable to grasp foreign policy fundamentals, runs to a game he knows best; “Community Disorganization.”

There is a major process disconnect as foreign nations speed ahead to (A) Defend their nations against foreign intervention from trade or violence; (B) Off-load as much American paper as possible for the inevitable day of reckoning when USA bonds dive down the bowl; (C) Gather-up hard goods and assets to defeat major losses incurred in stock and bond markets, and from other kinds of credit obligations and exchanges.

The first major rule is do not be in a position where others can come after you for debts or call in old favors when the barnyard matter hits the fiscal oscillator.  People are free with zero debts and when able to function without government.

Banks and corporations are stockpiling cash by selling stock and bonds. They are not hiring employees but instead giving them the pink slip. Cash is king in a depression and it’s survival of the fittest. Many might pass away unable to grasp reality.

Banks are not lending out the TARP money as they were told to do. They took the billions and converted them into US Treasury Bonds to earn a small net gain, obviate risk and to hell with their depositors. This takes them down when the bond market fails, as its most of their bank capitalization. Paybacks and insolvency can be lethal.

Fannie and Freddie have an open check book to scoop-up all the toxic mortgages from any kind of lender. This mandate lasts three years and then they file bankruptcy. Presto! Bad loans are gone and lots of homeowners are free and clear. In our view, there are several more shoes to fall in the real estate debacle; some are felonies.

BO stopped the offshore drilling after the large Gulf Spill. This immediately killed 40,000 USA high paying jobs. Further, the Captains on those big drill rigs were ordered out of the Gulf. They are moving to the Middle East, South America, and Asia where they enjoy higher day rig rates and no flack from flacks like BO. Now the energy reserves of America are further reduced as new wells-fields are not drilled. Energy inflation is not funny.

Media stars and analysts are busy promoting “The All is Well” theme for shares, credit, Europe, energy and a variety of other important topics. We know media is “In the Tank” for Washington, New York banks and traders. They must be or, the negative news would overwhelm.

One key point as to when you can trade or think the opposite is when an important public figure, congressman or woman, or person leading some lofty commission comes out in a special video, or statement, specifically reporting on something; when the topic is not in the news or really needs to be discussed at all.

One example would be Warren Buffet’s recent written-read report of several minutes touting the stock market. Mr. Buffet does not ordinarily do this so the remarks would be suspect at best. We think this report, for example, means exactly the opposite. His company, Berkshire-Hathaway has many billions at stake. Further, during the Lehman event they incurred huge multi-billion losses. We suggest Warren made the unusual presentation to calm the stock market Sheeple. From our view, we are now more concerned than ever. This is way out of character for Mr. Buffet.

Shakespeare once proclaimed, “Thou protesteth too much” or something to that effect. This is a strong signal to go opposite his statements and the trade. Chopper Ben is really good at this stuff. Timmy the G is not very good at all.  You can see Tim drop his head and talk to the floor when he fibs, which is often. In China, Timmy is viewed as a naïve child to be manipulated. You often see Chinese foreign leaders smiling when Timmy is around. Does the Chinese Central Party give a rip what our leaders ask them to do?

Our favorite gold and silver shares index is the GDX. Note the breakout over 55.

While traders and observers are expecting the precious metals shares to split from mainstream market trading action, we think it’s too soon to expect this. Rather, this   type of trading move is quite gradual leading up to a larger breakaway when the general stock markets sink into a collapse.

Watch for and expect a nearby softer correction in shares and most other markets for the balance of October. After the voting and the next FOMC meeting on November 3, (nice choice of date?) look for a stock market rally in most all shares including those in gold and silver.

The next fall rally in gold and silver should commence after November 3 and show some tiny moves up just before that date. From the signals we see, this rally could be absolutely outstanding. Try your best to own physical gold and silver and trade the shares of the related companies. The next larger-faster phase of commodities trading can continue for another 7 years based upon previous history. 

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 select 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. In the last twelve months, gold rallied over 34% and is going ever faster.

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 historical cycles.

Roger Wiegand
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. Listen to our Traderrog Daily Market Close on the Korelin Economics Report website  http://www.kereport.com/

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Monday through Friday, 9:00 am to 4:30 pm (EST) for details.  You can also e-mail our office manager, Claudio Bassi at cbassi@miningstocks.com for more information.


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