Monday, September 30, 2013

Obama = A Joke; Obamacare = A Disaster

I'm not sure how anyone can possibly support Obama at this point.  But here's an interesting fact:

I'd love to hear what he has to say about that.  Of course, unless it gets programmed onto his teleprompter, we'll never hear an explanation.

As for Obamacare, the facts stand for themselves:   It's already costing the Government more to implement Obamacare than Obama represented when he was pushing to have it passed;  premiums for everyone who have to reach into their own pocket are going to go up 50-100%, depending your State;  speaking of people who have to reach into their pocket to pay for healthcare, businesses are already shifting a higher portion of their workforce into part-time status, as evidenced by the latest non-farm payroll reports - in other words full-time employment is down significantly and it's been replaced with part-time workers in order for businesses to avoid paying for employee healthcare.  You can read more the details of what a horror show Obamacare is turning out to be here:  Thanks Barack

Here's a couple other factoids:  1)  The U.S. has the most expensive healthcare in the world and Obamacare is guaranteed to exacerbate this.  2)  According to the World Health Organization, the U.S. is ranked 37th in healthcare, behind such economic powerhouses as Costa Rica, Domenica and Chile:  LINK.  3)  The U.S. is the most obese country in the world.  4) Americans pop more prescription pills per capita than any other country in the world.

For this you can all thank your President.  I don't understand why anyone can get upset by the fact that the House Republicans refuse to pass a budget Bill that doesn't defer and/or de-fund Obamacare.  But then again, I'm sure Congress will ultimately pass some kind of "stop-gap" that will enable the Government to continue operating and funding Congressional paychecks.  After all, the Obama Government has not operated with an official, Congressionally passed budget Bill in 3 years.

Anyone who voted for Obama and still supports that failure of a human being is a complete idiot.

Thursday, September 26, 2013

"Lights Out" On The Housing "Recovery"

I'm not a Rand Paul fan, but he made a comment yesterday that makes complete sense:  (to paraphrase) If Obama likes Obamacare so much, why doesn't he voluntarily enroll in it?  To that I'll add:  Everyone in Congress is exempt from Obamacare as well.  Any Congressman who voted for it should have to enroll in it.  I'll also propose this:  how about everyone in Congress doesn't get paid until the Government ratifies an official budget - something that hasn't been done for several years now - and come to an agreement on the debt ceiling.
 Yesterday's new home sales report for August and today's pending home sales report for August further confirms that the "housing recovery,"  which I prefer to call a "dead cat bounce," has run its course.  While new home sales for August were reported as a healthy "gain" over July in the headlines, when you analyze the details the data shows otherwise.  In fact, July's plunge in new home sales was revised even lower.

I review the August data - along with a quick overview of KB Homes quarterly earnings report - which further confirms my thesis in this article published by Seeking Alpha:  Lights Out For The Housing Recovery.

In addition, the National Association of Realtors released its Pending Homes Sales Index for August.  This index supposedly tracks future home sales based on contract signings.  It was reported to be down 1.6% for August.  This is not a good sign because typically August is the second or third biggest month seasonally for home sales.  The fact that contract signings dropped like this in August is a very bad sign.

Speaking of "signs," I'd love to know how the NAR calculates its inventory of homes report.  I say this because I've noticed over the past 6-8 weeks that there has been a literal avalanche of "for sale" and "coming soon" signs posted all around the metro Denver area.  The NAR must "seasonally adjust" the listings that get reported to it.

I travel pretty much along the same routes from central Denver to south Jefferson County every week and every few days I notice more and more "for sale" signs posted.  To me it's a sign of desperation when a homeowner or a home-flipper puts a home on the market right on the cusp of the slowest seasonal selling period of the year.  My observations lead me to believe that the NAR reported inventory numbers are substantially off the mark.  Perhaps intentionally to create the illusion of low inventory.  Whatever the case may be, there's a lot of homes in Denver that are on the market that were not on the market in June and my observation stretches across all neighborhoods in terms of demographics.

I'm sure the Fed knows everything I've just stated and I'm sure that the probable re-collapse in the housing market played a tertiary consideration in their decision to not taper.  Of course, big bank solvency and Federal Government solvency are the primary and secondary considerations, with most of the emphasis place on the "primary" factor.

Wednesday, September 25, 2013

The Denver Gold Forum - Get Ready For Lift-Off

We are in a totally irrational market. Investors are throwing money at the major exchanges so they can capture the very last 2% of the climb but totally ignoring the best run and most potential resource shares out there. This situation isn’t going to last for long. Investors will wake up, they will see great value in stocks and they are going to make gains they never dreamed of before.  -  Bob Moriarity,
The Denver Gold Forum is held every September and is considered to be one of the most prestigious gold and silver mining stock conferences in the world.  It attracts mining investment professionals from all over the world. The cost to attend is too high for me to justify attending the entire show, but I always try to set up off-site meetings with the management of the mining companies we own in the fund.

Yesterday I met with the top brass (CEO and the Co-Founder) at Exeter Resources (XRA) and the CEO of Alamaden Minerals (AAU).  Without going into the details specific to each company, let me just say that based on what is going on in terms of resource development at each, the stocks are very cheap at $1300 gold as "value" plays.  They are 5-10x home runs if gold does what we all know what it is going to do.  I'll leave it at that and you all can do your own due diligence.

I did happen to post an article on AAU last week on Seeking Alpha, which you can read here:  AAU Is An Early Christmas Gift.  I will update it eventually based on my conversation with CEO Duane Poliquin.  But after an in-depth discussion of the potential size and quality of their primary resource in Mexico, AAU is easily worth over $3/share in the context of today's price of gold.  As for XRA, it is sitting on one of the largest untapped gold reserves in the world (30 million ounces) down in Chile.  If the price of gold does what I think it can do in the 12-18 months, it is highly likely that a major producing gold company like Goldcorp will take out XRA at a hefty premium to yesterday's closing price (76 cents/sh).  In the meantime, XRA has nearly 50 cents per share of cash on the balance sheet and a slow burn rate.

Having said that, both companies independently commented to me that this year's gold forum was the most well-attended in the history of the conference.  I found this quite surprising, considering that the market sentiment toward gold, silver and the mining stocks is near all-time lows.  XRA specifically said that their one-on-one investor meeting schedule was fully booked this year, vs. last year when it was completely empty.  

Both XRA and AAU told me that the majority of the attendees - aside from the usual bankers, analysts and mining stock fund analysts - were "generalist" fund analysts, meaning analysts and portfolio managers who run the large macro-oriented diversified institutional stocks funds.  They said that this cohort of investors was there because they think the mining shares have become too cheap relative to their fundamental value (ya, no shit) and that these large macro funds are looking at taking their allocation to the sector up significantly.

One of the primary components of my investment thesis for this sector has always been that eventually the big institutional investment funds would significantly increase their allocation to the mining shares - as in from almost nil to at least 5%.  Let me put the size of this capital flow into perspective.  There's roughly $17 trillion in retirement assets.  5% of this is $850 billion.  The combined market cap of every publicly traded mining stock - in total - is less than the market of each of the individual top 10 companies by market cap in the S&P 500.  So, for instance, the market cap of Intel (INTC) is roughly $117 billion.  Imagine the affect it will have on the smaller cap mining shares when some part of that $850 billion starts to buy into these companies, at least up to the point at which they are no longer "value" plays.  I know that AAU, for instance, is fundamentally worth $3/sh at $1300 gold.  What is it worth at $2000 gold?

One last point, for those of you who are not aware of this fact:  since the Fed started QE in 2008, gold and silver have been the best performing asset class.  Also, since the FOMC announced last Wednesday that it was not going to taper, gold has outperformed the S&P 500.  In fact, gold is up 1.4% since then and the SPX is slightly negative.  I know both facts don't seem likely, but that just demonstrates how bad the sentiment is toward the precious metals.  Historically, when the sentiment is in the gutter for any asset class it, has been the best time buy into that asset class with both hands.

Friday, September 20, 2013

The Brain Damage Continues

I see the Einstein Foundation at Bank of America is now forecasting a taper in December of $10 billion.  I guess they expect that the unemployment will be below 6.5% by then?  Doubtful.  They just suffer from irreparable brain damage.

I also see that non-FOMC member James Bullard was on Bloomberg saying the Fed could taper by $10 billion in October.  The part that's being left out of the headlines is that he said "if the economic data warrants it."  Thanks James.  Thanks for regurgitating the message that Bernanke already gave us on Wednesday.  What a f#cking waste of time Bullard is.  Can someone please hand James mop and a bucket so he can wipe up his mess.  Thankfully Fed officials are not paid by the taxpayers.  Unfortunately, the mental midgets are Bank of America indirectly are being fed by our tax dollars...

Perhaps James Bullard and the brain trust at Bank of America are better suited to join the Obama supporter behind the counter at obese America's favorite fast food joints:

Have a good weekend.  You all better enjoy what you can, while you can, as much as you can - it's going to start getting very "bumpy" for everyone except the top 0.5% soon.

Thursday, September 19, 2013

Brain Damage - And, Uh, QE Is Working (I'll Explain)

The Fed has lost control of the markets and Wall Street economists, media analysts and most blog writers suffer from tragic and terminal mental disabilities.
First off, I'd like to say that I'm really quite amazed at the degree of "surprise" over the FOMC policy statement yesterday.  Anyone who understands the nature of QE and why it's being done knew back in May when Helicopter Ben first mumbled the word "taper" that the Fed wouldn't reduce QE.  Given the response reflected by the media and the fact that 100% of Wall Street's brain trust expected a $10-15 billion "taper," I'd say that every single Wall Street economist is brain damaged.  What he hell are they getting paid for when they get their forecasts so egregiously wrong every god damn week?  Seriously.

And now I'm seeing articles which are reporting that now the big debate is the timing of an eventual taper.  Einstein is credited with attributing insanity to the act of making the same mistake repetitively.  I guess Wall Street, and the media who regurgitates Wall Street's vomit, must not only be brain damaged, but they all must be insane as well.  Analyze this you brutes:   Ben Bernanke said - almost verbatim - that the Fed will reduce its stimulus policy when the unemployment is below 6.5%.  He specifically said that  "we are tied to the data, we don't have a fixed calendar schedule" and that a low interest rate policy will be in effect until unemployment goes below 6.5% The Fed is tied to the data not the calendar.  Bold, italics, underlined.  If you know how to use google you can find the exact quote from Bernanke's mouth.  If Wall Street's overpaid finest - and paid with taxpayer largesse, I might add - wants to figure out when the Fed will "taper," then they should spend their time figuring out what it will take to get unemployment below 6.5%.  Here's my call:  we won't see that number in our lifetime.

Now I'll explain for Zerohedge, CNBC, Fox Business, Bloomberg News and ALL the severely mentally challenged Wall Street analysts exactly why the Fed is printing money.   Follow the f#cking money.

The Fed is printing money in order to keep the banks - both the domestic too big to fails AND the foreign too big to fails - from failing.  That's the policy.  In fact, I believe that in the whirlwind of wealth transfer in 2008 - led by the Obama Government - that Congress may have even legislated into law the too big to fail idea.

If QE is about the economy and jobs, why is more than 50% of the money being printed going to - and sitting in - the Fed bank account held by the U.S. subsidiaries of foreign-owned banks?  Here's the money trail.   Since "QE" began, the Fed has printed up roughly $2.8 trillion dollars.  I've gone through this exercise in past posts, but here's the updated numbers.  Of that $2.8 trillion,  roughly $2.3 trillion is sitting in the banks' "excess reserve" account at the Fed.  Of that $2.3 trillion, $1.193 trillion has gone to U.S. banks charted in this country.  However, $1.225 trillion has gone to the foreign banks with operations in the U.S.  You can find these numbers in the Federal Reserve Board report on Assets and Liabilities in the United States, Table H.8 - here's the pdf for you:  LINK

I'm not sure I need to state the obvious here, but if QE is all about trying to stimulate an economic recovery, then how come 82% of everything the Fed has printed up is sitting in the "cash accounts" of the banks at the Fed?  The only explanation is that the Fed is engaging in this money printing in order to prevent the banks from collapsing.  There can be no other explanation.  None.  Not to throw salt on the wound but, as I've demonstrated ad nauseum in previous posts, the economy is not recovering.

And this is why I never believed that the Fed would "taper."  Especially after that interest rate spike in May.  I think the Fed actually wanted to extend a token taper, which it knew would have to be reversed, but could not even do a meaningless token amount after Helicopter Ben's mid-May faux pas caused the biggest interest rate spike in 50 years of data.

The fact that they can't even dish up a token taper really says a lot about how bad things are behind the scenes with bank balance sheets. The banks that have a big exposure to interest rate derivatives got crushed when the interest rates spiked up in May. That spike was the biggest spike in 50 years of data. What that means is that bank hedge models weren't even close to predicting that event AND the banks weren't even close to being properly hedged against this mega-multi-trillion dollar interest rate derivatives exposure. 

Think about Long Term Capital. Remember that abortion?  It was "outlier" black swan type market movements that sent LTCM to its grave. That's the kind of market movement we had in May with interest rates in the context of the kind of interest rate derivatives exposure that the banks have when there's an outlier move like that.  There is no other explanation and this is why the Fed kept injecting money into the system that went directly to the banks cash account at the Fed even after Bernanke mumbled something about it being time to pull back on QE.

Here's how it works:  the banks need that $2.3 trillion in cash to put up as collateral against their multi-trillion dollar market-to-market losses on their interest rate (and credit default) swaps.  That keeps them in the game longer and extends the amount of time they have for a divine miracle to come along and save them from completely incinerating from a big nuclear derivatives melt-down.   The fact that the Fed can't even pull back by a token amount tells us that the situation is still unstable and probably getting worse.  You could see that I'm right in the expressions on Bernanke's face and in his eyes when he was giving his post-FOMC press conference.  He's frightened and that's why he's leaving the Fed.

Any other analysis of this is nothing more than sound and fury, a tale told by an idiot.  Anyone who thinks that QE is about helping "main street" and the middle class is severely brain damaged. And, by the way, as long as the banks don't collapse, QE is indeed working.  It will probably take a collapse of the dollar for it to fail, but stay tuned on that one because if you pay close attention to what China is doing with the yuan and with gold, on a clear day you can see the dollar's cliff.

Wednesday, September 18, 2013

YESSS! I Was Correct Back In June When I Said "There Will Be No Taper"

QE to INFINITY!  Ben Bernanke = Buzz Lightyear with a printing press!!!

 Here's what I said in June:   There Will Be No Taper

Just for the record, Zerohedge was adamant for months that there would definitely be a taper.   Let me just say - even though they refuse to publish my work - that they do a great job reporting news, and especially hard to dig out news, but their analytic work functions on a grade school level.

Are You Sure You Understand What Your Financial Advisor Has You Invested In?

“This looks like to me like 2007 all over again, but even worse,” said William White, the BIS’s former chief economist, famous for flagging the wild behaviour in the debt markets before the global storm hit in 2008.  - Article Link
That short article is a must-read, by the way.  For those who don't know, the BIS is the global Central Bank of Central Banks.  In the U.S., banks are supposedly supervised by the Fed (we know that's b.s. though).  But the Central Banks in each country are ultimately controlled by the BIS.  Some think the BIS is ultimately hidden "heart beat" of the global power structure.

The quote above is from a former chief economist of the BIS, who was there when the U.S. banking system hit the wall - a de facto collapse that was "stick-saved" by massive Fed printing and a  massive amount of Taxpayer dollars.  You can thank Hank Paulson, Tim Geithner, Ben Bernanke and Barack Obama for handing your tax dollars over the big banks.

At any rate, there were a couple of troubling indicators in that article that might directly affect any of you who have turned your retirement nest-egg over to your "trusted' financial advisor, in some cases probably someone who calls you a "best friend forever" (in the superficial sense, of course).  Truth be told, 90% of all of the financial advisors I've known in my time are nothing more that glorified car salesmen who somehow managed to pass some exams that I passed without studying and could have done in my sleep.

Here's the first extremely troubling thing - aside from the quote above - that Mr. White said:
The BIS said in its quarterly review that the issuance of subordinated debt -- which leaves lenders exposed to bigger losses if things go wrong -- has jumped more than threefold over the last year to $52bn in Europe, and jumped tenfold to $22bn in the US.
What's the big deal there?  You see that $22 billion of subordinated (i.e. risky) debt number for the U.S.  Who do you think funds that?  Most of that is funded indirectly YOU - either via your "safe" 401k bond fund or your "safe" IRA, in which your Einstein-esque BFF-advisor probably has told you he has you well-diversified into U.S. and European corporate bond funds.  Please see what happened to Drexel Burnham to understand what can happen to the price of subordinated debt - hint: it can go to near-zero.   And that number cited by the BIS, in the absence of any meaningful growth in anything other than the global money supply tells me that most of the subordinated debt that your portfolio is invested in is really just junk bonds in disguise.

Worried yet?  If not, this do the trick:
The share of “leveraged loans” used by the weakest borrowers in the syndicated loan market has jumped to an all-time high of 45pc, ten percentage points higher than the pre-crisis peak in 2007-2008...The BIS said investors are snapping up “covenant-lite” loans that offer little protection to creditors.
Let me translate that:  What it means is that the amount of low quality bank debt being issued by an expanding universe of risky companies is now at a level that is 10% higher than it was just before the financial collapse of 2008.  Think about that for a minute.  The "covenant-lite" adjective means that the bank debt and bonds that are being issued offer a lot less protection to investors in the event that the issuer (the company borrowing from you) gets into financial trouble.  By the way, in the search for yield, I can guarantee you that your bond portfolio has exposure to this debt.

In other words, the actual leverage - i.e. financial risk - embedded in the financial system, and therefore embedded in your "diversified, safe bond portfolio" is even greater now than it was in 2008 before the financial crisis hit.  Better think about that one a littler longer and harder.

Finally, Mr. White issued this warning - and it's something you will NEVER hear from your BFF-advisor because it's something that is well beyond his ability to intellectually comprehend - and even if he did he would assure you that it's not the case now:
Mr White said the five years since Lehman have largely been wasted, leaving a global system that is even more unbalanced, and may be running out of lifelines.
"Running out of lifelines."  There's no question we are almost at that point on the global collapse time curve.  The last remaining "lifeline" we be for the Central Banks to engage in outright hyper-printing of their respective currencies.  Oh wait, Japan is already doing that.  I may be wrong about this - and if I am  then it means our system here in the U.S. will soon completely collapse - but the U.S. Fed is probably not too far away from following Japan's footsteps with the printing press.  Or, as Ben Bernanke would say - in a perverted distortion of Milton Friedman's original proposition - "drop money from helicopters.

The engines on the whirly-birds are warming up, regardless of the what the FOMC announces today.  The ONLY way you can protect yourself is to load up on physical gold and silver that you safekeep in your own possession or with a money manager who keeps the gold outside of the banking and financial system.  Capire a tutti?

Tuesday, September 17, 2013

The Richest Households Live Near The Capitol

That three of the five richest States per capita are located around Capitol Hill should not surprise anyone who has spent any time living in the DC area.  When you walk around DC or drive around the metro area - which includes northern Virginia and the part of Maryland encircled by the DC "beltway" - you can just feel taxpayer largesse oozing from everywhere.  Just like New York City and northern New Jersey have a lot of obvious mafia wealth everywhere, DC has even more wealth connected to the Government, politicians and YOUR tax money.  It really is a truly appalling sight.

As they say, a picture says 1000 words:

This is just another sign that the U.S. is in economic and political collapse.  I really hope no one really wonders how someone like the perverted Mormon, Harry Reid, can enter the Senate with barely a pot to piss in and amass wealth estimated to be at least $10 million during his time there.  I know after taxes and living expenses that Senators don't make a lot of money - legitimately, that is.

Sunday, September 15, 2013

Must Read Commentary (You Won't See This Published In U.S. Newspapers)

Ed Asner already said it, so I don't have to - but I feel an obligation to report it.  In response to an inquiry about what has happened to the Hollywood liberal anti-war protesters that were quite vocal during the Bush years, Asner says:  Everyone is silent because no one wants to appear "anti-black" by defying Obama's will.

Here's a must-read editorial that appeared in the Asia Times.  It pretty much sums up the golden truth about what has happened in DC - and not just with regard to Obama's Syrian abortion:
In the West's comfort zones, the first black leader of the land of slavery still feels good, as if his very existence represents a social advance, regardless of his trail of blood. This obeisance to a symbol has all but destroyed the US anti-war movement: Obama's singular achievement...The judges at Nuremberg were succinct: "Individual citizens have the duty to violate domestic laws to prevent crimes against peace and humanity." The ordinary people of Syria, and countless others, and our own self respect, deserve nothing less now.
Please take the time to read this:  The Enemy Whose Name We Dare Not Speak

It's been my view ever since Bush initiated the fictitious "war on terruh" that the world's most danger terrorist is the U.S. Government.

Friday, September 13, 2013

The United States Crossed The Rubicon On Its Path To Collapse

Alea Iacta Est - "The die has been cast" - Julius Ceasar, after crossing the Rubicon River on his way to conquering Rome
I really wanted to go into a rant about how our economy and political system is in a serious state of collapse. The economic numbers released yesterday and this morning are proof that I'm right in my assessment of the economy.  The Syrian situation is all the proof we need that our Government knows I'm right (the old attempted "divert the public's mind from the problems at home").

Quietly yesterday afternoon the Government released the August spending defiict.  It surprisingly came in on the high side at $148 billion, well in excess of July's unexpectedly large deficit of $97.6 billion.  And I'll note for the record that media was pretty quiet about reporting the number.  YTD the total deficit with one month left in the fiscal year is $755 billion.  To be sure it will a be bit less than last year and it will fall short of the trillion dollar mark, but keep in mind that embedded in this number is close to $100 billion of non-recurring payments from Fannie Mae, Freddie Mac and taxpayers (the December tax revenue jump from investment gains taken before the Jan 1 capital gains increase).  In addition, revenues are higher this year, not because of a better economy, but because of a higher payroll tax rate.  Finally, we know that Jack "I'm Robert Rubin's New Butt Boy" Lew, the new Treasury Secretary, has explicitly stated that he has played games with the budget in order to avoid running out of money now that the Government debt issuance has exceeded the so-called debt ceiling limit. The Government spending will experience a "snap-back" affect - at least from an accounting perspective - in the next FY from these "games."

Today retail sales for August were reported.  They came in below expectations, and well below expectations if you strip out auto sales (which are inflated by easy credit) and inflation.  You can read the details here:  LINK and here:  LINK.  Essentially clothing sales and building materials (I told you the housing bounce is over) are dropping and restaurant sales - the beacon of disposable income - are plunging.  In addition, consumer confidence was reported and it had its biggest miss vs. expectations on record and it has plunged back to its January level:  LINK.  In short, consumer spending is contracting (expect for student loan and auto debt recipients) - the economy is in trouble and the people on "main street" know it.

So much for my not ranting (but I kept it brief).  The good news for gold investors is that since the Lehman crisis in 2008 it turns that gold and silver have been the number 1 and number 2 best performing investments:  Gold and Silver #1 Since Lehman Collapse.  I bet that surprises everyone who is reading this.  Despite this nasty two-year correction, if you invested every penny in gold and silver, you have outperformed every other possible asset class.  And get ready for the next move higher in gold and silver, because our system is in worse shape and further along its collapse than it was in 2008.  Goldman Sachs knows this and that's why - despite their analyst report that says gold could still go lower here - Goldman Sachs - the firm - became one of the largest holders of GLD during the 2nd quarter of 2013.  That just goes to show that anyone who follows the advice of the Taxpayer-supported big Wall Street banks is a complete idiot.

This brings me to the intended topic of my post today. I happened to catch the 1957 Frank Sinatra classic "Pal Joey" with Rita Hayworth and Kim Novak last night.  I have to say, there's nothing like a cheeseball 50's musical to make you think back to what this country was like when it truly was an "exceptional" place to live and in which to be a proud citizen.  I'm not going to elaborate beyond that because I want everyone to enjoy this number from the movie - but I will say that it really angered me that our country has devolved into a cesspool of unfettered corruption that's led by a gang of Democrats who are war-mongering, lying, cheating, stealing neocons and their figurehead is a useless Chicago-system politician who is better equipped to pimp hookers on Chicago's South Side - ENJOY:

Thursday, September 12, 2013

The World Has Been Turned Upside-Down: Shaken, Not Stirred

“If the rule you followed brought you to this, of what use was the rule?”  - Cormac McCarthy, "No Country For Old Men"
As a child of the late 1960's and 1970's, I was taught that the U.S.S.R. was evil and the U.S was good.  It was the Russians and their cold-blooded leaders who wanted to destroy the world and "God's" country - good old "red, white and pie...Chevrolet...yada yada yada" was here to save humanity.

But just like Obama and his band of Merry Democrats are now the blood-thirsty neocons running our God-forsaken country, it seems Russia has now assumed the role of global savior.

Shockingly, the NY Times published an editorial appeal by Vladimir Putin to the American public in which he pleads for caution with regard to how our country deals with the Syrian situation and he completely undresses the Obama regime and exposes it for what it is:
It is alarming that military intervention in internal conflicts in foreign countries has become commonplace for the United States. Is it in America’s long-term interest? I doubt it. Millions around the world increasingly see America not as a model of democracy but as relying solely on brute force, cobbling coalitions together under the slogan “you’re either with us or against us.”
I was shocked the NY Times actually published this piece because, at some point during the Bush years, the NY Times transformed from a bastion of liberalism and intellectual critique into a war-mongering, neocon-promoting tabloid.

Here's Putin's piece and I urge everyone to read it carefully and think about it terms of just how rotten to the core the American Government has become:   A Plea For Caution From Russia            

                              “Query: How does the never to be differ from what never was?”                                                                                   -Cormac McCarthy, The Road

Wednesday, September 11, 2013

It's Getting Interesting Out "There"

War was always here. Before man was, war waited for him. The ultimate trade awaiting its ultimate practitioner.  - Cormac McCarthy, "Blood Meridian:  Or The Evening Redness In The West"
It's funny, I bought a few of Cormac McCarthy's novels for a friend several years ago and I ended up reading them before she did.  As an English major in college, I can say definitely say that his works should be taught at the college level.  The problem is, the college would have to decide if they should be taught as part of the English, Government or Philosophy curriculum.

It looks like Obama finally put the finishing touches on his fade from attacking Syria without justified provocation.  Hell even AP has ripped to shreds any of the "evidence" that Obama has offered up as proof Syria even used chemical weapons at all:  LINK  What's most stunning about this whole ordeal to is the ineptness with which Obama and John Kerry handled the entire situation.   This whole stunt the Obama regime tried to pull off was pathetic from start to finish.

Again, as an English major, to me the worst adjective that anyone can label anything is "pathetic."  What's hilarious about the whole ordeal is that the Democrats and CNN are now assuming the role of the neocons and the Republicans in Congress are now largely the pacifists.  It pretty much leaves one speechless.  Certainly anyone who originally supported and loves Obama unequivocally CAN NOT support this tragically pathetic neocon now...

At any rate, I am starting to conclude that gold and silver are marking time for a big move to the upside.  My latest indicator?  Pan American Silver (PAAS) announced out of the blue yesterday that just THREE weeks after it announced that it had implemented hedges for a significant amount of its gold and silver production, it had decided to remove them.  This was a stunning and rapid reversal of a big financial decision and it must have cost them a lot of money to remove the hedges.  I'll know if the cost was big enough that have to disclose the details in their next 10-Q (it will be pigeon-holed in the footnotes for sure).

I have never cared for PAAS as an investment because I have found the management to be incompetent and full of crap.  More important, they have always been a hedger.  But probably the biggest red flag for me with regard to PAAS is that Bill Fleckenstein was on the board of directors until the end of 2011.   Fleckenstein is probably one of the most disingenuous and incompetent market analysts out there.  For some reason he gets air-time on CNBC, but probably because he represents the "contrarian" investor viewpoint and CNBC has also figured out the he's an idiot.  We certainly know that CNBC features nothing but idiots.

At any rate, one of the primary Wall Street firms that "advises" PAAS is JP Morgan.  JP Morgan has spent the better part of the last 9 months eliminating its massive, manipulating short position in Comex gold and silver contracts and has actually amassed a considerably large long position in gold contracts.  My bet is that JP Morgan told PAAS that, based on what it knows as an insider to the precious metals market worldwide, putting on those hedges was not a good idea.

There are plenty of other signals being flashed loud and clear for anyone who is paying attention, but this latest move by PAAS further confirms my view that the metals are marking some time here - ostensibly until after the next FOMC meeting next Tues/Wed - before they being to make a move to the upside that will take everyone except the hardiest of precious metals investors by surprise.

Monday, September 9, 2013

Putin To Obama: "Check Mate - Little Boys Shouldn't Play A Man's Game"

When the shooting starts would you rather be armed or legal?  - Cormac McCarthy,  "The Road"
In a move that I can only describe as the equivalent of Putin changing Obama's political diapers for him, the Russian President has persuaded Syria to place its chemical weapons stockpile under international control:  LINK

This takes away any stated motive for Obama and John Kerry to press their dwindling cast of supporters into firing away at Syria.  Furthermore, it removes the possibility of the U.S. staging another "false flag" chemical weapons show, which is what most rational-minded observers have concluded occurred in Syria.

To be quite frank, I have to say that in the latest footage I've seen of John Kerry making his case for war in Syria, he has a frightening "rabid dog" look in his eyes - he's literally foaming at the mouth to attack Syria and get rid of the Assad Government.  I have to conclude that Obama and Kerry are acting in a politically insane manner here and I stand by my earlier conclusions that the underlying motive for this attempted attack on Syria by the Obama Government is seeded in money - oil-based blood money.

Is this the kind of leadership and political directive this country needs right now (or ever for that matter), when a record number of people sign up for food stamps and social security disability every month:  LINK  I have to believe that Obama has more serious policy agendas at home with the number of people in this country slipping into poverty growing by the day.

How about the Government debt ceiling Barack?  According to your blood money Secretary of Treasury and quiet advocate of your move to attack Syria, the Treasury runs out of money in about weeks.  How about the sinking economy?   Unfortunately money is the ultimate persuader in DC these days and AIPAC, the defense industry and the oil industry are throwing horse bales of it around very liberally.

The truth of the matter is that as the widespread and overt corruption on Wall Street and Capitol Hill grows by day, Obama needs something to divert our attention from our collapsing system.  History has taught us that crumbling empires always resort to war.  I hope this time around, given the historically unprecedented availability of life-destroying weapons technology, that Cormac McCarthy's vision in "The Road" does not spring into reality - it's been my fear since reading this must-read book four years ago...
When we're all gone at last then there'll be nobody here but death and his days will be numbered too. He'll be out in the road there with nothing to do and nobody to do it to. He'll say: where did everybody go? And that's how it will be. What's wrong with that?    Cormac McCarthy, "The Road"

Friday, September 6, 2013

The Non-Farm Payroll Report: The BLS Outright Embarrasses Itself

I want to preface my comments today by stating that the Government's monthly employment report is a complete work of fiction.  This has been shown to be true ad nauseum by many analysts.  What really amuses me is that these supposed highly educated, highly paid Wall Street "experts" go on programs like CNBC and Bloomberg News and have a serious discussion about an economic report that is really nothing more than a statistical comic book.  It's like watching a human version of "Family Guy."

Having said that, today's particular report from the Bureau of Labor Statistics was an outright embarrassment for the people working at the BLS - the few who actually put in a solid 30 hours per week not including their one hour lunch.  The headline number reported that 169k jobs were added to the economy in August, well below the 180k expected by Wall Street's finest forecasters.  But the real shocker was the downward revision to July's report.  The original report stated that 162k jobs were created in July.  But today's report showed a downward revision to just 104k jobs (please keep in mind that these numbers are purely fictitious).  If you care, here's a link to the actual report:  No BS like BLS

Huh?  The Phd Government statisticians and data-gatherers missed their original estimate by 38%?  You can't be serious.  If an insurance company actuary missed his estimates on expected payouts over the next year by 38%, he would be fired on the spot.  This is a tragedy and a comedy at the same time.  But what's most pathetic about the situation is that an error in estimation this egregious essentially means that everyone who works at the BLS on the employment report has been rendered of no use.  They are working on the taxpayer payroll in order to produce reports that are completely useless.  Their jobs are meaningless.  Why even bother going into the office?

What's equally as astonishing is that the Government has the nerve to report that the unemployment rate actually fell to 7.3%.  Again, this is a purely fictitious number.  The reason that the unemployment rate fell in August is that 516,000 people left the labor force.  Over half a million people either gave up looking for a job and crawled down some rabbit hole, took out massive student loans and enrolled at University of Phoenix online or went for the real money and decided to apply for social security disability and get paid by the taxpayer to stay at home and stare at reality tv.

Recall that the unemployment rate is calculated by dividing the number of people not working but appear to be looking for a job that's not there divided by the labor force.  The labor force is defined as everyone working plus everyone who really wants to work.  If you leave the "labor force" for any of the three reasons I listed above, you are no longer considered part of the BLS statistic known as "the unemployment rate."

From this the labor force participation rate dropped to 63.2%.  This rate is the number of people defined to be in the labor force divided by the working age population.  With over a half million people dropping out of the BLS's sight, the labor force participation is at its lowest level since 1978.  Think about that for a minute.  What were you doing in 1978?  What was our country like?  What was going on in our country?

Think about what it means that our economic system can only support the same relative number of jobs now that it supported in 1978.  That is truly an appalling fact.  That's even more mind-blowing than the revelation that everyone at the BLS who works on the monthly non-farm employment report is completely useless..

Wednesday, September 4, 2013

A Really Foul Smell Is Coming From The White House

You know how horrific it smells when you walk into the men's room at an NFL football stadium in the fourth quarter?  That's the kind of smell I'm getting from the Obama Government right now after Barack has made it clear that he wants to attack  Syria and ultimately remove Assad.  But the real question is, why?

Does anyone really believe that the U.S. can prove that the Syrian military used chemical weapons against the rebel forces?  To begin with, based on everything I've read, IF chemical weapons were deployed, it's impossible to know if they came from the Syrian military or the rebels.  But just to remind everyone, the rebel forces are being led by Al Qaida and have been heavily funded, armed and trained by both Saudi Arabia and the United States.  The latter is a fact that the U.S. can not deny. 

How absurd is it that the U.S. is conducting a trillion dollar "war on terror" against Al Qaida around the globe and yet it is funding and supporting them in Syria?  It's so absurd that you couldn't begin to make that up.  But why?

First off, let's completely dispel the cover story of chemical weapons use.  The evidence is flimsy and 100% hear-say.  Maybe they were used, maybe not.  But which side used them is impossible to know for sure, although, as I'll show in a minute, the motive for staging the use of chemicals was a lot greater for the Saudi/U.S. coalition.  This reminds me 100% of the Bush regime argument for going to war in Iraq, which we know for a fact was complete lie.  Colin Powell lied to the world and he knows it and we know it.

Second, check out this photograph of John Kerry having a cosy dinner with Assad and their respective wives in 2009:  LINK   Keep in mind this the same person that Kerry just referred to as "Hitler."

Finally, what's the U.S. motive?  It's never really for "humanitarian" reasons.  After all, regardless of which side flung the alleged chemicals, there's no do doubt that the U.S.' strategic bombing of Syria will yield many more multiples of casualties - military and civilian - than occurred from the alleged use of chemical weapons.

However, I have found that beneath the surface reasons for every war in history there has always been economic reasons embedded as the root cause.  Every single one.  As it turns out, not surprisingly, this one is over energy.  Natural gas pipelines.  Read this if you don't believe me - and this is not the first source from which I've read this but it's laid out nicely here:  LINK

The real reason for the U.S. involvement is that both Saudi Arabia and Qatar want to tighten their control of the flow of energy in the Middle East.  Rest assured that there's also plenty of motive for big U.S. oil companies to make this happen. 

I guess the next questions would be, who really controls the U.S. and the Obama regime?  Big oil or Saudi Arabia?  And does Obama really deserve that Nobel Peace Prize?