MF Global And The Truth About Our Entire System

MF Global would not have been able to do what they did without Corzine's close relationship with CFTC Chairman Gary Gensler (see this:  LINK) - Dave in Denver

My thoughts for this blog just sort of flowed from a back and forth exchange I had earlier with long-time market colleague and GATA Chairman Bill Murphy, aka "Midas" of http://www.lemetropolecafe.com/  We had been discussing why the metals sold off today despite the fact that it's becoming more obvious by the day that both the Fed and the ECB will have to print a lot more money OR be willing to accept the consequences of system collapse.

With regard to the market in gold and silver, I said that when I woke up and saw gold down with no real news I assumed it was what Jesse says it is ("Jesse" of http://www.jessescrossroadscafe.blogspot.com/):  It's become crystal clear that the Government has absolutely no intention whatsoever to stop the illegal manipulation of the metals market. The best thing to do is keep accumulating physical on these dips and be careful with margin.

Bill pointed out that the action in the shares on Friday - unexplainably lower - forecast today's action in the metals, as the big bank manipulators - left unregulated by the regulators - usually hit the mining shares before they try to raid the metals.  I agreed with that for the most part except that the hit on silver didn't work on Friday. It's true the hit on the shares forecast this but the reason for it is to try and reduce the amount of actual Comex gold and silver deliveries they have to make, especially if the receivers (stoppers) ask for the metal to be delivered off the Comex. I think there's a real inventory stress building on the Comex. I think the advent and growth of SLV and GLD alleviated this for a few years but now more investors are understanding the difference between ETFs and real metal and the risks of leaving your metal with a questionable custodian. Just the movement of the reported inventory of metal at the Comex over the past couple of weeks tells us something unusual is going on.

And don't underestimate the stress that the Venezuela move has put on the physical market  (Venezuela President Hugo Chavez has recalled 200 tonnes of gold being stored in England, Switzerland and New York and had it shipped back to Venezuela out of justified distrust of the custodians in those countries). Chavez is no dummy. He didn't do that to try and squeeze the market, he did that because he wants to make sure Venezuela has its gold and there's no risk of an MF-type event at the big bullion custodians like HSBC and JP Morgan. Which brings me to one more point, even though the MF thing will probably be minimized by the media and the perps will walk relatively unpunished, there is no doubt in my mind that it's "raising the eyebrows" of smart, wealthy investors all over the world. This will be a problem for the fractional bullion custodians if I'm right.

Furthermore, for what it's worth, my partner and I think most of the risk of big hits on the metals has been washed out. We think we will see a significant move to the upside over the next 3-6 months and have started positioning our portfolio accordingly. There's no doubt in my mind they are working like hell to contain the risk of a possible run on Comex metal. Again, we should not be underestimating the trust/confidence factor that has been introduced by the MF situation. You would have to be absolutely brain-dead to believe that this can't happen at one of the big Too-Big-To-Fail banks.
Regarding my above-statement about MF, hilariously the CTFC today passed "tougher" regulations with regard to commodity and futures brokers abilities to use customer funds.  Interestingly:  

The Commodity Futures Trading Commission, which voted unanimously to approve the rule, originally planned to finalize it months ago. But the agency delayed the overhaul amid fierce push-back from Jon S. Corzine, who at the time was the chief executive of MF Global.   LINK

It's been my contention all along that MF Global would unequivocally have NOT been able to embezzle customer funds the way they did if it were not for the tight relationship between Jon Corzine and CFTC Chairman Gary Gensler.  In fact, I strongly believe that Gensler should be forced to resign his position and AG Eric Holder should open an investigation into his link to Corzine.  Anything short of this and you can be assured that the integrity of our system is rapidly collapsing.

The truth of the matter is that as people who are paying attention start to really lose faith in the system - the banking and brokerage industry, traditional wealth safekeeping custodians and the entitie which make money insuring their integrity (clearing agents like the CME), and the Government regulators who are supposed to be enforcing the rules already in place but are more likely in bed with the corrupt operators like Corzine - we will see a massive sweeping of money from of all paper wealth depositories that will be channelled into in the world's oldest currency and the only one that does not have any counter-party risk - gold and silver. 

For those who are wondering how the dollar has "counterparty risk," understand that the dollar is backed by the "full faith and credit of the U.S. Government."  The Government is therefore the counterparty obligated to maintaining the value of the U.S. dollar and guaranteeing its use as a currency.  Given that the dollar has lost 96% of its value since the 1913 establishment of the Fed, I would say that the risk of the U.S. Government as a counterparty to the dollar is substantial.  Eventually the dollar will completely collapse, as have ALL "fiat" currencies in the entire history of human  existence.  In the meantime, those who are in a position to do so are stealing as much wealth from the people in this country as they can - and they are often enjoined in this venture by those in charge of preventing the theft.  Corzine/Gensler is the perfect example and proof that I am right about this.  Got gold?

You CAN'T Be Serious

Before I get to the ridiculous non-farm payroll report the BLS released this morning (believe me, it's a serious pile of dog shit with chocolate cupcake frosting spread all over it to mask the stench), I wanted to point out that the media is finally starting to scrutinize CFTC Chairman Gary Gensler with regard to his oversight - or lack thereof - and role in the MF Global fraud.  I want it noted that this blog outlined Gensler's unscrupulous ties to Corzine a month ago:  Gensler and Corzine - Two butt-buddies, with reach-arounds

I'm starting to think that "BLS" - instead of Bureau of Labor Statistics - stands for Bureau of Ludicrous Shit.  The monthly non-farm payroll report was released to today and the numbers they are reporting are so absurd that they go well beyond any possible tiny shred of credibility.  The headlines scream:  "Jobless rate falls to 8.6%, 120,000 jobs added."  Sounds wonderful, right?  Go out and spend!  However, let's look at the truth behind the headlines.

Here's the numbers you won't see being reported by most news media sources.  The unemployment rate dropped from 9% to 8.6%.  This is a very highly manipulated number and it is determined by taking the size of the labor force - as reported and defined by the BLS - and dividing that number into the number of unemployed.  But first understand that the labor force is defined as "those employed plus those who are actively looking for a job."  There is a large amount of leeway for manipulation in this metric.  At any rate, in order to make the unemployment rate better, all the BLS is does is somewhat arbitrarily reduce the size of the defined "Civilian labor force."  If you go to page 5 of the link I provide below, you will see that from Oct 2011 to November 2011 the "civilian labor force" indeed declined from 154.198 million to 153,.883 - or by 315,000.  This means that according to the Government, 315,000 people stopped looking for work (or possibly got fired from their Walmart greeter job and slithered away into a cave).  Also on page 5 is the "labor force participation rate."  This shows the percentage of people in the economy who are considered to be part of the labor force.  This number dropped to 64%, the lowest rate since 1983.  Given that the population is substantially larger now than in 1983, this means that there are a record number of people out "there" who are not working and not looking for a job. That is, they are largely living off of the Government entitlement programs.  Another startling metric is the average duration of unemployment, which rose to a new record of 40.9 weeks, up from 39.4 weeks. 

More significantly, the BLS has a metric titled "Not in labor force."  This number increased from 86.07 million to 86.558 million, or a whopping 487,000.  So the Government is reporting to us that 487,000 people have decided that things are so good with their finances that they have decided to just stop working altogether.  I find this exceedingly hard to believe, especially since the supporting data that would support this metric show the complete opposite.  For instance, real wages have been plunging.  The point is, you would expect that more people would be looking for work, because the population is growing and people are earning less, on average, which would indicate to me that size of the real labor force should actually be growing, not shrinking.  Also on page 5 you will find "Duration of unemployment."   If you scroll down to page 6 in the link below you will see that average weekly earnings declined, as did average weekly hours worked.    These numbers are unequivocally not consistent with the positive jobs report that is being promoted in the headlines.  BLS - LINK

To sum it up, here's the truth that you will not see reported in your daily newspapers tomorrow or hear on your nightly local news, CNN, CNBC, Bloomberg or MSNBC:  There are less people working as a percentage of the total population, the total number of employed people as a percent of the population continues to decline, it's harder to find a job for those still looking, and those who do find a job are earning less - especially after factoring in inflation.  Sounds a bit different that the rosie headlines reported by the media and promoted on CNBC. 

Have a great weekend.  I am playing in my last tennis tournament this weekend as a USTA/NTRP 3.5-rated player, as I was bumped up to 4.0 by the NTRP.  I haven't decided if I will appeal this LOL.

David vs. Goliath

I wanted to bring to your attention how the SEC goes after small investment advisory firms and then issues grand press releases which announce the fines and punishment doled out to these "criminals."  As you are reading thru this, keep in mind that while the SEC and other financial markets regulatory offices, like the CFTC for instance, are looking the other way while big investment firms rape and pillage freely, the big bad SEC is clamping down on small firms that fail to "adopt and implement written compliance policies and procedures."  Oh boy, it's okay to embezzle $1.2 billion in customer assets to make margin calls on your firm trading account, but if you don't have your internal written policies handy for the SEC to walk in and look at whenever they want you get in big trouble.  Here's the LINK

I can guarantee you that this fact has a lot to do with how, and against whom, the Government decides to enforce the laws:

Lobbying outlays by the five biggest spenders in the commercial banking sector increased 12 percent in the first three quarters of 2011 over the same period last year, a McClatchy/Tribune analysis of federal lobbying disclosure records shows.

Here's the LINK

This is just more evidence that is piling up which points the fact that this country is deteriorating into a large-scale banana republic.  I can vividly recall in the 1970's reading countless stories about the way in which Governments and businesess operated in Central and South American "banana republic" countries.  If you were wealthy and owned your own politician, you could essentially operate your enterprise with absolutely no regard for the laws or fear of prosecution.  All it took was big "donations" to the politicians.  How is that any different from what is now happening in this country?  Seriously. Why does Jon Corzine get wait a month before he has to appear before Congress to answer questions about MF Global?  Why is he not in District Court right NOW answering questions from a judge?   He hasn't even issued any public statements?  Leads me to wonder if he's hiding in the closet of his good buddy Barack Obama and peeling bananas to feed to the politicians...

On another note, I have been fielding several inquiries about silver and the recent price action of silver vs. gold.  Well this comment from Ted Butler sums it up as well anything and rather than reinvent the wheel and create my own similar comment, I embezzled this from Ed Steers Gold & Silver Daily (which you can get for free everyday by email): 

The recent underperformance of silver relative to gold and other commodities presents an added reason to consider silver as undervalued. While many investors view relative price weakness as a reason to avoid purchase, that reaction is incorrect for a market already manipulated to the downside, like silver. In fact, an objective analysis of the relative price moves this year in gold and silver should bring that out. Silver and gold have more in common than any other commodity, making them an ideal relative comparison. As I write this, gold is up $325 (23%) year to date, while silver is up $2 (6.5%). (Admittedly, silver has generally outperformed gold on different time spans). Since there are 3 billion ounces of gold bullion in the world (out of 5 billion oz total), the value of those bullion ounces have increased this year by almost $1 trillion, to over $5.2 trillion. The total value of the world’s one billion ounces of silver bullion has increase ed by $2 billion to $33 billion. In other words, the increase alone in the value of the world’s gold bullion this year is 30 times greater than the total value of all the world’s silver bullion. Please think about that for a moment.

My point is that there is not much difference in the investment merits of gold and silver to warrant such a mismatch in the value of each. Both are precious metals valued by world investors in times of economic stress and loss of confidence. That the dollar value of gold is almost 175 times greater than the dollar value of silver is absurd. Let me be clear in what I am saying. I am not saying that gold is valued at absurd levels; I am saying that silver is being valued at absurdly low levels relative to gold. It is absurd that a ten dollar change in the gold price is equal to the total value of all the world’s silver bullion. The true absurdity is that this mismatch in relative values is not yet recognized by the world’s investors, even the big and sharp hedge fund operators. As and when it is recognized, those investors will rush to buy silver. In a very real sense, the higher gold prices climb, the better it is for silver. A higher gold price is the silver investor’s best friend.

That pretty much says what needs to be said.  And since I said yesterday that I felt that silver would minimally go to $200-300/oz., and on the assumption that we will ultimately see the gold/silver ratio regress back to at least 16, you can back into an implied price target $3200 - $4800 for gold.  But remember, $200-300 is only my publicly disclosed view...

Finally, I realized last night that I had made a comment about Bank of America's stock nearly breaching $5/share to the downside and that the comment might have puzzled a few people.  Typically once a big cap stock goes below $5 and holds there it is because it is less than 12 months from filing bankruptcy.  But this comment sums it up, and I forget the source from which I embezzled this early today (apologies in advance to the source):

If BAC had fallen below $5, there could have been avalanche selling because some institutions cannot buy or hold a stock that is less than $5 per share. A cascading BAC could have generated an ‘Emperor has no clothes’ moment for BAC. Buffett would have been chagrined. So it was imperative that someone closed BAC above $5 on Tuesday and that some scheme had to be implemented to drive the price higher on Wednesday.

You Know How You Get To Carnegie Hall?

Practice.  After practicing short term gold and silver forecasting for 10 years, I tend to shy away from posting my short term views on here because it only leads to readers busting my balls when my calls are wrong.  It's safe to assume that - in general - my longer term outlook (3-5 years) is for at least $200-300/oz. silver.  Likely higher but that's what I'll go on record publicly with.

Having said that,  I do believe that the silver market - after the vicious manipulated take down that took silver from $50 in April to a recent intra-day low of $26 and change on Sept 26, I am confident that silver is ready to take-off again.  Now, having said that, we will still get a lot volatility because of the market manipulation to which even CFTC board member Bart Chilton publicly admitted (note: of course, he did not explain why the CFTC does not crack down on it).  I know many of you have read the recent uber-bullish price calls by James Turk and John Embry.  I purposely have not read those yet because I like to form my own convictions before I see how they match up against the trading convictions of people whom I highly respect.  After looking at hourly and daily silver charts yesterday before the market closed, I decided that most of the downside risk has been washed out and that there is a high probability silver will begin to make a big mover higher.  We started accumulating AGQ in our fund and we lifted all of our bullion hedges.

While the risk of a manipulated take down always exists, if silver can grind thru the mid-40's it should easly and - as John Embry termed it - "cleanly" move well above $50.  I know Turk is calling for $70 silver and Embry is looking for high $60's in the "short term."  I won't put out a specific price target but I will say that I believe the price outlook of both Turk and Embry are achievable - if they do occur - by May.  Now, if I'm wrong about this go ahead and bust my balls and I'll post those comments unedited.

************

I wanted to comment quickly on the currency swap deal announced by the Fed today.  In a nutshell, what this facility does is make available a massive quantity of U.S. dollars to non-U.S. banks who have immediate dollar liability requirements (payments) that are not being funded by their income producing assets (i.e. they are insolvent, for the most part).  To cut through the spin, it is likely that there were one or more very large European banks that were close to collapsing and the Fed bailed out the situation.  From the Fed statement today: 

[T]hese central banks have also agreed to establish temporary bilateral liquidity swap arrangements so that liquidity can be provided in each jurisdiction in any of their currencies should market conditions so warrant. At present, there is no need to offer liquidity in non-domestic currencies other than the U.S. dollar...

That tells me that one or more big banks were on the brink of default.  The Fed also cut the interest rate charged for use of the swap facility from 1% to 1/2%.  This really underscores the severity and immediacy of the problem.  Interestingly, a friend from NYC called me this morning and told me that Deutsche Bank is trying to sell its asset management division.  This is a cash cow asset and it tells me that, not only is DB desperate to raise liquidity, but it has to resort to unloading good, core assets because there is no bid in the market for its crappy assets.  In other words, Deutsche Bank is running out of room with which to hang itself...these problems are also impending in the U.S.  The stock price of Bank of America nearly lost the $5 level yesterday and I fully expect Bank of America to either be bailed out by the Taxpayer or collapse within 12 months.

One more little tidbit for those watching for history to either rhyme or repeat:  when the Fed initiated a massive global dollar liquidity credit line like this in December 2007, it was followed by the collapse of Bear Stearns three months later in March 2008.  The entire U.S. banking system nearly collapsed a few months after that.  The point here is that this Federal Reserve - ultimately U.S. Taxpayer back-stopped - liquidity bailout is nothing more than kicking the can down the road.  The question is, for how long?

One more point of note:  China announced just prior to the Fed action that they were lowering their bank lending reserve requirements.  Both the move by the Fed and by China are moves that will likely have to be followed up sometime soon (i.e. within 2-4 months) by a very massive Quantitative Easing - aka money printing - program.  The money printing - aka currency devaluation - is on the verge of becoming globally viral.  This is why gold and silver are moving very strongly today, as well as fiat/risk-based assets like stocks and junk bonds.

It's on the basis of this fundamental back-drop that I am confidant that my outlook for silver (and gold) is quite justified and highly probabilistic.

Just When You Think It CAN'T Get Uglier Out There...

Before I get started on what I had intended to post, I want to present two items of acute interest.  First, I hope everyone - Democrat or Republican - is aware of just how tight Jon Corine is with President Obama and the Obama White House insiders:  LINK  Not that it will matter for the Presidential race because the leading Republican candidates are thoroughly unelectable, but I sincerely hope that the conservative media makes Obama wear Jon Corzine the way that Republicans made Michael Dukakis wear Willy Horton in the 1988 Presidential race vs. George H. Bush (everyone remember that?).   I am sure that we are not seeing immediat investigative actions being taken on Corzine because of his inside connections to Obama.  He's not even scheduled to appear before Congress until next month. If this were a drug-dealer busted in Harlem, this case would already be before the magistrate and the perp would be waiting for his trial in jail.

Second, many of you have read this by now, but here's a textbook example of the ways in which the insider elite and those connected to the insiders are raping our system wholesale and stealing what they can, while they can: 
"How Paulson Gave Hedge Funds Advance Word"  LINK  The article goes on to describe how Henry Paulson - then Secretary of the Treasury under George W Bush - met with several large hedge fund managers - many of them Henry Paulson cronies from Goldman Sachs - and revealed  the Government plans for bailing out Fannie Mae and Freddie Mac - several months before the bailout actually occurred. 

Some bird-brain professors are quoted in the article as saying that this is not inside information, but that is total horse shit.  If I had possession of that information when Paulson doled it out to his buddies, I would have gone out bought up every single discounted Fannie Mae and Freddie Mac bond I could find and I would have leveraged those purchases with as much money as I could borrow.  I'm sure the trading records of those at the Paulson insider trading pow-wow will never be investigated.  What Paulson did was unequivovally illegal and he won't be prosecuted for it.  Hell, Bush signed an executive order that gave all of his cabinet members a perpertual get of jail free card. Obama was supposed to repeal that EO but never did.

This shit just keeps piling higher and higher...quite frankly, I have become unusually doomish and gloomish in my outlook for what is coming our way.  And the outright fraud, corruption, raping and pillaging and theft that is actually being enabled by our Government is an obvious signal to me that very bad things are headed our way...

In fact, I'm so disgusted by the information and implications of the two above articles that I'm going to abbreviate my original post.  In short, the market yesterday was all giddy about the Black Friday sales estimates and the new home sales.  However, everyone should know that when the real numbers are tallied, there will be substantial downward revisions of the Black Friday initial sales estimates.  In fact, one of the widely reported sales reports is based on measured foot traffic at malls not based on anything concrete, like money going into the cash register.  For those of you who didn't see it, here's a fantastic summary why the Black Friday initial sales numbers are nonsense:  LINK  Moreover, it was pointed out today that every year more and more stores participate in Black Friday.  In fact, many of them open up either at midnight or before midnight.  This makes year over year same-store-sales metrics - which are the relevant numbers if you want to see real growth - impossible.  Furthermore, it is highly likely that the pervasiveness of sales deals and give-aways has "pulled" a substantial portion of holiday budget spending into Black Friday and the ensuing weekend, which means that it is likely that overall sales for the entire holiday period will be anemic at best.  After all, we have seen that real monthly income for workers has been declining and consumers are cutting back on credit...who is left to spend?

Regarding my gloomy outlook - look at it this way:  this country is not capable of dealing with the economic and standard of living plunge that would occur IF the Government were to implement the type of policies and spending cuts required to fix the system.  Just think about the implications for joblessness and the massive increase in poverty that would occur if the Government were cut itself down by the at least the 50% required to start balancing real spending.  This country would look like a 3rd world country on steroids.  So that being the case, the people on top and inside know this so they are looting what they can, while they can.  And no one is around to stop this because the people who were voted into office to enforce the laws - of the people, by the people and for the people - are the same ones who are engaged in the mass looting of our system.

Your best shot at seeing what "the other side" of what is coming will look like is to move as much of your wealth as you can into physical gold and silver - NOT GLD, CEF or PHYS (unless you have enough money to take delivery of 400 oz bars and a place to store them safely).  This includes liquidating as many of your retirement fund accounts as you can (obviously if you have a 401k and currently work at your 401k provider, you can't liquidate that).  Beyond that, sailing away from this country on a boat, the way my buddy did who introduced me to the precious metals 10 years ago, is your best option.

The Stench From MF Global Gets Worse - Should James Giddens (Bankruptcy Trustee) Recuse Himself?

A few days ago I opined that the stench coming from MF Global had taken on the distinct and nauseous odor of dog shit.  Well now the smell has elevated to the level of the kennel area at the Westminster Dog Show.  It turns out that the law firm of James Giddens - who is the very highly paid bankruptcy trustee - just so happens to do legal work for both Price Waterhouse, MF Globals' audit firm, and JP Morgan, MF Global's largest creditor.  Quite frankly, I find it extremely hard to believe that the bankruptcy court would appoint and allow Gidden to be the bankruptcy trustee in this case, as the conflict of interest has the smell of dog shit all over it.

But it runs even deeper.  I find it very interesting that no one has mentioned Refco or Goldman Sachs in this whole ordeal.  After all, MF Global purchased the assets of Refco after it tanked in colossal fashion.  However, there were many questions which were conveniently swept under the rug and buried.  For instance, Refco filed for bankruptcy literally two months after Goldman Sachs took it public.  Typically, when a large company like Refco is taken public, the underwriter and audit firm involved, Grant Thornton, perform very detailed and thorough legal and accounting due diligence.  The fact that Refco filed bankruptcy literally 60 days after it went public raises all kinds of questions, all of which were neatly and conveniently dismissed.  If memory serves me correctly, Goldman threw out about $300 million in "nuisance" settlement money, thereby somehow avoiding billions in liability actions.  It also made a lot more money off of Refco and it's IPO than the$300 million in "hush" money that it coughed up.  Goldman Sachs' audit firm:   Price Waterhouse, the client of the MF Global bankruptcy trustee James Gidden.

Bloomberg writer, Jonathan Weil raises some interesting questions about the credibility of Price Waterhouse and its competence as an auditor of MF Global and ultimately Goldman Sachs.  Kudos to the commenter who provided the link, which you can read HERE

I don't know about anyone else, but I find it quite fascinating and intriguing that ultimately there is a direct connection from MF Global to Goldman Sachs that goes beyond the Jon Corzine connection.  And there is a direct connection to MF Global, Corzine and the ability of the Government to cover up a lot of this mess via Gary Gensler, Corzine's butt-buddy at Goldman Sachs and the Chairman of the CFTC, the regulatory body of the U.S. Government that was in charge of monitoring and regulating MF Global.

Quite frankly, among James Gidden and his law firm, Hughs Hubbard & Reed, Goldman Sachs, JP Morgan, the CFTC, Price Waterhouse and the ashes of Refco, there is far too much "coziness" and conflict for me to believe that there is not one massive cover-up going on here.  At the very least the Obama Administration should step in and force Gidden to step aside as bankruptcy trustee.  In addition, Attorney General Eric Holder should open up a wide-ranging inquiry into this whole dog shit show, including appointing an independent audit firm responsible for conducting a very thorough forensic audit of every party mentioned above.  Gary Gensler should also be removed at Chairman of the CFTC.  This is the very least that the President who got elected on the promise of cleaning up DC and creating a more level playing field for all should do.

Don't hold your breath on that, but make sure you keep your nose covered, because the smell of dog shit emanating from Wall Street and DC has become unbearable.

This thing stinks worse than a bunch of rotting dead bodies covered in rat shit and I find it quite appalling that the Obama Administration has issued no meaningful statements nor is it taking any meaningful actions to enforce the laws and investigate this matter. It leads me to conclude that the Obama Administration is being complicit in the cover-up.

Have A Great Thanksgiving Holiday

I wanted to post an excerpted commentary from Richard Russell, which I sourced from Ed Steer's Gold and Silver Daily.  Richard Russell has been "doing" the markets for longer than most of us have even been alive.  An expert in the Dow Theory theory and stocks in general, in the last few years he's been shifting his investible assets into physical gold.  He understands as well as any of us the degree to which fiat currencies globally are being destroyed by greedy bankers, disasterous Government fiscal policies and - foremost - accelerating corruption and fraud.  Here's Russell's comments: 

My advice: We are moving closer and closer to what I call "survival period" -- the period where the magic of compounding turns into what will be the poison of compounding. This isn't a time for timing. This is a time for action. Reduce your exposure to bonds and all items that provide fixed interest rates. Similarly, reduce your exposure to stocks except the gold miners. Look to expand your positions in inflation-protected assets, especially gold.

Those who are holding stocks in the hopes of the usual rebound are going to be terribly disappointed in the years ahead. This bear market is going to be unlike anything we've ever seen before. In the end my survival vehicle will be gold. I say again, timing is hopeless. Gold will have purchasing power and true wealth as almost everything else is destroyed by this unprecedented bear market. The US Government is now so loaded with ever-growing debt that it has become a mathematical freak. We return to different times, when rising interest rates will eat up the US government. With $55 trillion in assorted debts, the US is in no shape to deal with rising interest rates. We are in a state of reverse compounding, leading to inevitable bankruptcy on a massive scale.

There you have it.   Happy Thanksgiving and remember:  enjoy what you can, as much as  you can, while can.