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B4 The Bell Weak-end Den July 22-24


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Link Good discussion last night-Huh.  Ray Merriman in my view is the best Financial Astrologer out there.  I have followed him for a lot of years and rarely is he wrong.  He sums up where we are very well.  It is indeed fish or cut bait time. When you spend the years I have watching the tape you get to a point where you can recognise when there is an anomaly.  A time when things are different, when forces take over that are beyond natural cycles.  This I believe is one of those times-if so WE are in a lot of Trouble!

Tanks for the link Brian. The guy seems pretty bullish on Metals. I'd like to know what he wrote about gold & silver in his 2004 book. I read somewhere that he sees the Dow losing 50-90% from the high into 2010...

 

The following was written in May :

On one other note, I am often asked about Gold and Silver, which broke to a new cycle low on Friday. After reaching $433.00 on April 1, this contract sank to 377 on Friday, May 7, as Mars entered the very emotional sign of Cancer. After reaching a high of 836 on April 2, Silver has now plummeted to 558 as of Friday, May 7. It is my opinion, based on cycles and geocosmic signatures reported to subscribers in this week?s special "SOS Report," that an exceptional buying opportunity in precious metals is about to unfold.
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Yes , I agree with Plunger most traders tend to over analyse. This market is falling because technicals and fundamentals have come together. The Market has to be re priced at lower multiples to reflect lower profits and growing debt. There are too many Companies out there fighting for market share in a shrinking economy and a lot of them are going to go belly up. Which of course adds to the unemployment problem, the deficit problem, the personal debt problem etc.. Given a choice between inflation or deflation..I would take the former but it ain't going to happen and that scares me silly. You can see deflation everywhere other than Oil and NG there is nothing that you can't buy for less than you could 5 years ago. Deflation means "Depression" it means a whole lot of hurt for everyone including us. We are better prepared than most of the public but deflation will alter our lives in ways we can't conceive.

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However, the march of technology is unstoppable...

Well, the Dark Ages showed us otherwise. As the Roman Empire collapsed, the major trading roads were left unprotected and the world began an implosion cycle. I believe in cycles and I believe Dark Ages are just around the corner as the American Empire collapses.

 

Jim Dines predicts the "the coming end of the age of travel..." and many brilliant thinkers like Marc Faber say that a new 20-year war cycle has just begun. America is pre-emptively securing its oil as China is starting to buy Canadian commodity companies... By the way, I think China is playing this commodity chess game a lot better than America by registering increasingly on the GDP of resources-rich countries.

 

Summer fun is behind us. We'll have nice pictures for memories.

 

We have entered the downside of the current K-wave. This wave could last anywhere from nine to twenty years as we saw in earlier winter K-waves. The K-wave is the rise and fall of a generation and covers both the social and economic life of the period. The ancient Mayans knew of the inevitability of the cycle and took steps to mitigate its effects (although ironically in the end it did not save them).  Our challenge will be to see that we come through so that once again we can rebuild.

 

The current winter K-wave is still young. We have noted in the past that following a speculative bubble things have a tendency to return to where they started or stated another way the gains of the previous period are wiped out. Already some stocks such as Nortel Networks have fallen 98%. Other big names are just disappearing period. We highly suspect that the NASDAQ will ultimately lose at least 90% of its value from the top.

http://www.gold-eagle.com/editorials_02/chapmand062902.html

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Thank you Karenblue for your post, and welcome to the board.

 

Yeah, I lurked for a long time, too, before they "flushed" me out of hiding.

 

Can you answer some questions for me, and possibly others on the board, please?

 

I recently withdrew half the money in my brokerage trading account because of stories here about internet problems, and the posibility that if my broker shut the doors and filed chapter 11, that it would be nearly impossible, or would take years, to get any of my money back. Am I right?

 

If they "pulled the plug" on the internet, how would I sell my stocks and get my money? I suspect that by the time the mail arrived at their office, it would be too late.

 

I am prepared to lose all the money that's left in my trading account, but am wondering if my fears are "grounded"? I don't even own the stocks in my account as they are held "in street name", meaning the broker owns them.

 

Do I worry too much?

 

Thanks, Karen, for any help you can give me, and hope to see more posts from you on the board.

 

B.S.

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the argument for gold has always been that when deflation threatens, the Fed will lower rates and let the dollar fall.? To say that the fall in gold presages deflation assumes that the Fed will allow a depression to unfold.? Is there a precedent for that kind of Fed action?

Check this essay Butterfield.

 

We don't have a real economy.

You can't get richer if you don't produce more.

Flipping homes is not producing.

Higher rates make the illusion end.

 

THE FED'S HYPER-LIQUIDITY ENDGAME

 

In almost every respect, Japan has advantages. They continued to overbuild their real economy after bubbles broke. The USA overbuilt its financial sector chronically, and continued to export its real economy after bubbles broke.

 

The real risk lies with the US Economy, whose financial sector engineering has built such leveraged machinery as to threaten the entire system. The Federal Reserve will most likely keep interest rates low for as long as possible. A mere 25 bpt hike at the June 30-th meeting could be a meaningless bone to toss the bond market. It would satisfy those bond vigilantes who urge more responsible monetary actions. But it would do little to halt the rise in cheap money permeating the system. The US speculative community, which surely includes homeowners eager to purchase overpriced homes, and to extract cash equity from overvalued homes, have piled up $1.04 trillion in debt during calendar year 2003.

 

Events of the last two months have convinced me that a substantive rise in the USDollar can kill the US Economy. More importantly, it means a certain smother to the financial sector, bound to the great bond speculation game. The financial markets are a bubble, but so is the entire US Economy a bubble. Fundamentally, a USDollar rise would choke off the rise in export commerce which is vital to reduce the burgeoning trade gap. We face a herculean challenge to reduce imports without having to cut off the arms & legs of the US Economy, which is structured toward retail sales. I doubt it can be done. The only true solution requires huge bankruptcies, the return of the mfg base to the USA, a 50% decline in the USDollar, harsh govt program cutbacks (e.g. Social Security, Medicare), and the dismantlement of the US Military machine. The only likely piece to that recipe to come to reality might be the 50% US$ corrective adjustment. However, it will not be done constructively, but rather as part of a desperate hidden policy to fight a crisis whose grip will grow more powerful.

 

It is my contention that the USDollar will be fully sacrificed in order to keep a cap on long-term interest rates.

 

http://www.gold-eagle.com/editorials_04/willie062204pv.html

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Plunger, Beardrech,--Greenspan's comments about American unemployed being a nation of slackers--unbelievable. As Beardr. comments--has a definite pre-revolutionary quality to it. Guillotine blades were sharpened to the tune of such comments prior to the French revolution.

 

Things have progressed far beyond the point where the unemployed are blaming themselves. Bald faced insensitivity may have worked to propagandize a few years ago, but not anymore. The ptb are just going to infuriate the hell out of people if they keep it up. Individuals can put up with almost anything you throw their way-- as a species we are remarkably resilient. The one thing that we can't tolerate are comments that are dispiriting, as a strong spirit provides the foundation for enduring adversity.

 

Perhaps when Greenspan retires he can star in the remake of "Les Miserables". He's doing very well directing the dress rehearsals.

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I don't even own the stocks in my account as they are held "in street name", meaning the broker owns them.

 

 

 

 

 

You own them Not your broker. When held in street name, the firm can lend them to short sellers until you sell.

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Butters - further to your question- the Fed can't cut rates, they have no room to, sure they can cut to zero, we are almost there now. Gold in my mind will follow what happened in 29. Gold stocks cratered with the market Homestake then the biggest was cut to about 3 bucks a share but in 1933 with terrible deflation it was trading for $144.- @ share. BS-re your question to Karen Blue up here in the true north our brokerage accounts are insured up to $100K per account by the Investment Dealers Association. One would think you have a similar mechanism down there?? If you hold anything other than Gold, NG or Oil stocks I would worry more about the value of the stocks in your account at the bottom. As to your stocks being in "street form" call your Broker and have them mail the certificates to you in your name and stuff them somewhere safe. One reason I play only the Spoo's and Cubes is they are liquid and with stops I can be in or out in a nano-second! ;)

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