RF's Financial News

RF's Financial News

Sunday, April 17, 2011

This Week in Barrons - 4-17-11

This Week in Barons – 4–17-11:

I told you so … there I said it ☺
- Two years ago I told you silver (then at $17) would hit $50 – well this week it hit $42 (on it’s way up).
- Five years ago I said gold (then at $500) would hit $1,500 – and this week it hit $1,482 (on it’s way up).

How did I know that Silver and Gold would basically triple inside of two and five years respectively? It had nothing to do with a Fibonacci series, or a ‘cup and handle’ formation – but had everything to do with common sense - seeing bad loans, printing money, and sitting back and saying – people are going to need a stable currency – and what’s severed us well for the past 1,000 years – gold and it’s sister element silver.

Shifting gears - on Friday the government released their Consumer Price Index (CPI report) and according to The Ben Bernanke, prices (excluding food and energy) have only risen 0.1%. I apologize in advance but I cannot hold back my contempt for that elitist scumbag any longer. We all understand that housing is still imploding and because housing is such a large component of the CPI it makes the CPI basically fictitious – but really Benji – how can you make statements saying that you believe “inflation is contained”?

- The World Bank calculates that global food prices are 36% above year-ago levels and have pushed an additional 44M people into poverty. (FYI the World Bank defines poverty as earning less than $1.25 per day!) The figures would be far worse if not for rice, whose price has remained stable because the U.S. is NOT being the premier supplier! Benji your printing press has people dying of hunger!
- Obama is gearing up to run again for 2012. His re-election budget is ONE BILLION dollars. It now costs you $1B to buy an election!
- In 2010, according to USA Today, only 45.4% of Americans had jobs – and last year just 66.8% of men had jobs – the lowest percentage on record!
- New unemployment claims rose above the 400,000 level again last week.
- This week, after a two-year investigation, members of Congress laid out a 5,000-page report concerning the housing bubble/toxic loan implosion. Senator Levin especially points to premeditated fraud and outright theft by Wall Street banks, and of course sitting on the top of the heap was Goldman Sachs. Senator Levin states, “In my judgment, Goldman clearly misled their clients and misled the Congress. Our investigation found a financial snake pit rife with greed, conflicts of interest, and wrongdoing,"
- Doesn't anyone find it odd that just this week, the FBI shut down 3 online poker sites, impounding all the money and arresting the owner operators because online poker is "bad" – but that very same FBI can't find ONE criminal banker (Bankster) to take down – after evidence proves they committed “fraud and misled millions”?
- JPM is still illegally naked shorting a third of all silver production on earth.
- On Friday – the Office of the Comptroller of the Currency, the Federal Reserve, and the Office of Thrift Supervision announced a settlement yesterday with the 14 largest U.S. mortgage servicers including Bank of America, Citibank, HSBC, JPMorgan Chase, MetLife Bank, PNC, U.S. Bank, and Wells Fargo. The settlement does NOT fine the banks for any of the wrongdoings but instead lists ways they need to improve their mortgage and foreclosure proceedings. WHAT? I can’t even misplace a parking ticket – but if you're JP Morgan, or Banc of America you get the free pass to steal, lie, cheat, and then have the taxpayers foot the bill for it all?
- And finally, this week regulators decided to EASE the rules on private companies selling stock allowing them to "raise more money without incurring the increased reporting and other requirements of becoming a public company". This is, of course is a bonanza for Goldman Sachs, JP Morgan and the rest of the Gang of 12, who are looking at goldmines called: Facebook, Twitter, Groupon, and Zynga.

It’s fairly evident that the world hates us – and they a special dislike for the U.S. Dollar. Just last week the nations that actually HAVE MONEY had a meeting about trade and currency, and the U.S. wasn't even invited. The leaders of Brazil, Russia, India, China and South Africa called for stronger regulation of commodity derivatives to dampen excessive volatility in food and energy prices, which they said posed new risks for the recovery of the world economy. In another dig at the dollar, the five BRICS nations agreed to establish mutual credit lines denominated in their local currencies, NOT in the U.S. currency.

In my view, the U.S. system should have failed – but that’s what capitalism was designed for – failure and then out of failure comes strength. But by letting the Central Bank save member banks, they have bankrupted the U.S. There is no way out. If The Ben Bernanke stops the printing press - we crash immediately. If The Ben Bernanke continues printing money - we hyper-inflate and then crash. Either way a severe downturn is coming to an economy near you.

The Market..
Currently we’re leaning long – however I suspect our biggest gains are in front of us and will come on the short side. But since the U.S. dollar is deteriorating, we don't keep our profits there – we put them in gold and silver, and I think this will be a successful strategy going forward as well.

This market can be called the Energizer bunny because when the government is behind the market – the market ‘just keeps going.’ Virtually every day The Ben Bernanke (thru POMO) gives Wall Street about $8 Billion, and the ‘Banksters’ are required to keep the market up as part of the deal. There will come a day when the collective redemptions of millions of investors will offset the money injected by The Ben Bernanke, and that is when the rug-pull is going to hit.

DOW 12,400 has held as an upper resistance level, and DOW 12,000 has provided the "floor". If the DOW closes over 12,400 two days in a row - you can expect a quick run to 12,700. If we fail DOW 12,000 for two closes, you can be sure we're about to drop ten percent in a short period of time. In the meantime, one of our favorite tactics is to buy heavy, and sell half quickly. This tactic seems to work well in a choppy market. Meaning – if we like ABC over $50 – and at 10:45 it breaks above $50 – we buy X shares (say 2,000) – and by 2 pm it's at 50.60 – we’ll sell half (1,000 shares) and pocket that quick $600 dollars. Then we set our stop at the entry price and let the balance ride. Hopefully over the course of several more days ABC is at $53 or $54 and we then take that trade off the table.

Our long holds looking like: SLV, NG, AAU, DNN, AVL, SLW and USSIF.

In our short-term holds:
- We still believe in Silver and purchased more SLW and SLV this week.
- I’m trying to be more diligent on Twitter – I am ☺

If you’d like to view my actual stock trades – and see more of my thoughts – please feel free to sign up as a twitter follower – “taylorpamm” is my nickname on Twitter – fyi.

If you’d like to see me in action – teaching people about investing – please feel free to view the TED talk that I gave 4 months or so ago now:

Remember the Blog:
Until next week – be safe.

R.F. Culbertson

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