This Week in Barrons – 5-20-2012 Sell in May and Go Away? This isn't your typical "Sell in May and Go away". This market downturn has very little (if anything) to do with investors starting to book vacations and trading desks getting thin. This downturn has everything to do with Europe, overwhelming debts, no jobs, falling housing, and the biggest reason of all – the effects of the QE's having run their course. But honestly, the entire globe is slowing (especially Europe), and people with very little money don't tend to buy a lot of goods and services. Consider these facts: - “A hurricane is approaching," says a Chinese official, “where 8 of 10 of the country's largest shipbuilders have yet to receive an order this year.” - This week’s upward revision makes the Bureau of Labor and Statistics (BLS) a perfect 20 for 20 this year in needing to revise higher the previous week's jobless claims number. - This week’s Philly Fed Business Activity index came in at -5.8 versus an expected 10.0. New Orders came in at -1.2 versus an expected 2.7. - We learned that Hewlett Packard (HPQ) is planning massive layoffs that, along with an early retirement program and attrition, could reduce its workforce by 10% to 15%. - We also learned that in Chinese real estate: April Housing starts were down 14.4% year over year, Office starts declined 21%, Land sales were down 54.7%, and Foreign funding of property development declined 80.8%! People fear this may push the Chinese economy into a hard landing. The problem with nobody buying anything is the domino effect. When there is no buying, there is no production and therefore fewer jobs. So, like a cancer it spreads. Now, our politicians obviously know that printing money out of the clear blue is bad. But they also know that without freshly printed money to jam into the banks, the economy will grind to a halt. Will they let the economy grind to a halt, and let the too big to fail – FAIL, or will they take the tough road and increase interest rates, put the EPA back into the ground, and really do what's necessary to fix a failed economy? To me the choice is simple, they're going to print money and announce more QE (more stimulus). The only thing I don't know is when. How far down are they willing to let the market fall before Bernanke comes out with an announcement? The current version of QE (called Operation Twist) is set to expire in June. Thus far, The Ben Bernanke has hinted to us that he has many tools to employ and will jump in if the economy looks like it's weakening. But thus far, despite some pretty horrid economic news, he has kept his powder dry. I have to think that it's going to hit in early June, as they announce the program that will replace the twist. If he rolls out a really big package, then we should see the market run back up and threaten the triple top at 13,000. But what if it's not that big – then that would be ugly. Everyone knows that Greece and Spain are shot, Europe is fading, and China is slowing. Everyone also knows that the U.S. is much weaker than the numbers suggest. Therefore, I think that the next stimulus package will be a monster, but until it hits we are going to fade. We may see a couple hundred point counter bounce, but overall we are sinking. Some folks have asked about Gold and silver – and why they are not moving up? One reason is that because the Euro is so weak, the dollar is relatively strong, and most gold is priced in dollars. So when the dollar is firm, gold slides, but it is deeper than that. JA wrote in showing us a nice article by Greg Canavan hi-liting: - If gold weren’t such a crucial part of global finance, it wouldn't be such a huge market. Gold is crucial regardless of what Warren Buffet or The Ben Bernanke say. Therefore, the day physical gold leaves the banking system is the day when the paper dollar based system dies. - At this point the value of physical gold is many multiples of the current price, and many would not be surprised to see trading halted and gold re-priced much higher over the course of a weekend – as has been done throughout history. - This current pullback in the gold price has not been as severe as past episodes, and the pullback is suggesting that physical gold is increasingly in demand. Many monetary systems are being brought into question – and when this happens (regardless of what the price tells you) – physical gold is the only asset without counterparty risk. - So if you’re thinking of selling your gold – be strong – and think about what you will be swapping it for. You will be going short on 6,000 years of history and long on a 41-year paper and credit based experiment. - A very low gold price is not in a government's interest because physical gold would leave the system and end the paper money game. So governments simply try to control gold's rise, making sure it doesn't throw off too much of a red alert signal. - For the gold price to genuinely fall, we need to see a rise in REAL interest rates. In a world buckling under the weight of debt at all levels, that is just not going to happen. So, I look at this as just more "noise" in the overall picture. I might have gold and silver wrong. I was told I had it wrong at $400, $500, $700, and $1,000. Yet I'm just too dumb to understand why it's wrong, so I continue to buy it. Some have asked: “What if Romney wins?” Do you really think he is going to do the tough things that need to be done? There are only two choices: the tough love, tough medicine we need, or more bogus dollar printing until hyperinflation takes over. I say they pick printing, and history is on my side. The Market What a week. We came into the week with the news that JP Morgan managed to lose $3 Billion. Yes, grand master Jamie Dimon (the guru of finance) didn't know his "whale" trader had placed them with so much risk that $3 Billion could go poof? Give me a break! A “whale” might lose $100 Million and Jamie not know about it – but $3 Billion – not a chance! Of course he immediately had to rush out and tell folks why the banks don't need any more regulations, and it was just a big, bad bet. The market was particularly nasty this week as it didn’t like: Europe, Greece, Spain’s banks on the edge of absolute insolvency, not even the Facebook IPO! You know a market is really nasty, when the single biggest collection of Wall Street wizards couldn't keep it green on the day the biggest IPO in a decade hit the wires. So, are we destined to the dustbin of DOW 7K, or is this just ‘Sell in May, and Go away’? There are areas of the market that got "sold silly". Look at the mining ETF’s like GDX and GDXJ that had been beaten unmercifully. The coal sector represented by KOL has also been getting hammered. Some of these areas are ripe for a nice bounce, but what about the overall market? If you're comfy believing that established technical patterns are really still in place, then it's possible we're looking at a move higher soon. But I'm in a separate camp. I say this market can't do squat in a meaningful way if The Ben Bernanke doesn't come out with some form of replacement for “Operation Twist”. My feeling is that we are indeed overdue for a bounce, maybe even a few hundred points. But after that we will continue lower until we hear from the Feds. My guess is that The Ben Bernanke is going to unleash a massive program (one that drives the market up to possibly all new highs) right in time for Obama to say: "See I fixed it". So, when the announcement hits we want to be very long in the market. But until it does, be very careful, and take a look at the most beat up of the sectors. Tips: We continued picking up mining shares last week as the sector has been beaten bloody and there's no reason they're so low. We bought more physical gold and silver. DS urged us to acquire more EXK and we did. Currently I’m holding: - GDXJ at 19.50 (currently 18.71) – stop removed temporarily - GDX at 41.72 (currently 41.58) – stop removed temporarily - EXK at 7.96 (currently 7.96) – no stop - GLD (ETF for Gold) – in at 158.28, (currently 154.82) – no stop, AND - SLV (ETF for Silver) – in at 28.3 (currently 28.00) – no stop. To follow me on Twitter and get my daily thoughts and trades – my handle is: taylorpamm. Please be safe out there! Disclaimer: Expressed thoughts proffered within the BARRONS REPORT, a Private and free weekly economic newsletter, are those of noted entrepreneur, professor and author, RF Culbertson, contributing sources and those he interviews. You can learn more and get your free subscription by visiting: . Please write to to inform me of any reproductions, including when and where copy will be reproduced. You may use in complete form or, if quoting in brief, reference . If you'd like to view RF's actual stock trades - and see more of my thoughts - please feel free to sign up as a Twitter follower - "taylorpamm" is my handle. If you'd like to see RF in action - teaching people about investing - please feel free to view the TED talk that he gave on Fearless Investing: To unsubscribe please refer to the bottom of the email. Views expressed are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest and is not in any way a testimony of, or associated with Mr. Culbertson's other firms or associations. Mr. Culbertson and related parties are not registered and licensed brokers. This message may contain information that is confidential or privileged and is intended only for the individual or entity named above and does not constitute an offer for or advice about any alternative investment product. Such advice can only be made when accompanied by a prospectus or similar offering document. Past performance is not indicative of future performance. Please make sure to review important disclosures at the end of each article. Note: Joining BARRONS REPORT is not an offering for any investment. It represents only the opinions of RF Culbertson and Associates. PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN INVESTING IN MANAGED FUNDS. WHEN CONSIDERING ALTERNATIVE INVESTMENTS (INCLUDING HEDGE FUNDS) AN INVESTOR SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS AND OTHER SPECULATIVE INVESTMENT PRACTICES MAY INCREASE RISK OF INVESTMENT LOSS; MAY NOT BE SUBJECT TO THE SAME REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE INVESTMENT MANAGER. Alternative investment performance can be volatile. An investor could lose all or a substantial amount of his or her investment. Often, alternative investment fund and account managers have total trading authority over their funds or accounts; the use of a single advisor applying generally similar trading programs could mean lack of diversification and, consequently, higher risk. There is often no secondary market for an investor's interest in alternative investments, and none is expected to develop. All material presented herein is believed to be reliable but we cannot attest to its accuracy. Opinions expressed in these reports may change without prior notice. Culbertson and/or the staff may or may not have investments in any funds cited above. Remember the Blog: Until next week – be safe. R.F. Culbertson

This Week in Barrons – 5-13-2012 What Out for the Banks! First off – Happy Mother’s Day to all – gosh knows they certainly deserve the day. It’s by far the toughest job going out there – congratulations to all the moms! Secondly - take a peek at the following chart (attached):

Last week we heard about the dismal jobs picture, but the concept of ‘participation rate’ is a difficult one to understand. The line on the above graph (produced by the St. Louis Fed) is literally off the charts. Their chart only goes to 88 million, and we now have 88 million 400 thousand people that are NOT in the labor pool. That is why the unemployment rate ticked down. Every time someone leaves the labor pool (gives up looking for work) – they are no longer counted in the unemployment rate! Amazing accounting wouldn’t cha say? I’ve been telling you for years that the banks are insolvent. Not only do they hold toxic "assets" that are not worth the paper they're printed on, but there are so many derivatives cross swapped between the 27 major banks that no one really has a clue what they're all worth. The top bank in the US with exposure to derivatives is JP Morgan Chase (JPM). JPM has over $1.8 Trillion in assets and $70 Trillion dollars exposed in derivative plays! The top 25 banks have $230 Trillion in derivative exposure, but only have $11 Trillion in assets. Now – are these quality assets – of course not. Many of these assets are priced at ‘mark to model’, not mark to market – so who really knows what they’re worth. But it's even worse than that. A lot of these assets are collateral that has been pledged multiple times from smaller dealers to the larger banks. Therefore, no one truly knows exactly who's got what, at what price, or how many times it's been pledged. When you do the math, whether its fractional lending, assets to exposure, or whatever your measurement – the banks are insolvent. Yet The Ben Bernanke cannot let them fail, thus the printing presses continue to run. Remember The Ben Bernanke’s main job is NOT employment, but it IS to save his member banks at ALL COST. Factually we’re seeing: - the worst retail sales since 2009, - factory orders posting their largest decline in 3 years, - housing prices continuing to fall, and - Challenger layoffs increasing 7% in April! Unfortunately, stimulus is like a drug to a junkie – after very short periods of time, you need bigger hits to get the same high. For example: - QE 1 took us from DOW 6600 to DOW 10K. - QE 2 took us from DOW 10K to DOW 12K. - “Operation twist" (basically QE3) took us to DOW 13,300. Notice that each additional stimulus move bought us lower results. That's the way it always works. So we've got an issue, the economy is rolling over again. The effects of QE 1, 2 and 3 are wearing off and all this is taking place smack dab in the middle of what will be a nasty, grueling Presidential race. If the banks roll over again, it’s going to make Obama look really bad because he's been out telling folks he rescued us from collapse – not to mention the stock market will simply implode on itself. Thus, we wonder: "What happens now?" If you listen to CNBC most of them will tell you that any additional stimulus is "off the table". I find this ludicrous, as The Ben Bernanke has NO choice but to open the floodgates, expand the balance sheet, and do more "non-conventional" means of stimulating our economy. Unfortunately it’s mathematically impossible for us to get out of this mess. When you see the Fed’s charts, view the Bank statements, hear the accountants spell it out – then you realize the frustration as CNBC trots out their cheerleaders to tell us that all is fine. Wouldn't it be nice to approach the American people with the real facts, and discuss the disaster we're in the middle of? For all of you asking about gold and silver. The reason that I don't really get too concerned over the daily prices of gold and silver are that they are being manipulated by the likes of our central banks (JPM included). The reason I feel confident is because The Ben Bernanke and the ECB in Europe have absolutely no choice but to print more money and try and reduce their respective debts with devalued dollars. And just like it sounded crazy in 2001 when I said Gold would hit $1,000 in ten years, it sounds equally as crazy when I say that Gold still has $2,400 written all over it and silver will see $70. But I'm a very patient guy, and The Ben Bernanke isn't. The Market The Market is showing lots of down. Ever since the ugly jobs report, the initial jobless claims, and the Challenger report we’ve been down. Isn’t it funny that just last week we were at "four year highs" and now we're desperate to hang on to the lower range of the channel we've been in for months. We all know that the present "operation twist" is scheduled to end in June; therefore, the 20th of June is the latest The Ben Bernanke could come out with something. Yet that would be a bit rash to just say nothing for two months and then surprise us. I believe that the market will continue to trade sideways and down until the next announcement of stimulus. Sure it won't go down every day. It will bounce and backfill, bounce and sink; however, when The Ben Bernanke does announce something, we'll rally. We might not get the same pop out of it as we have in the past, but we will see them rejoice. Be careful out there folks. it's very hard to find stocks that can go up for more than a day, without sector rotation pulling money away from the very stock you just bought and the next day it's down. Take profits on the lion’s share of the position quickly and try and let the smaller balance ride. If the market goes up again and you're stock does, you're still in the game, but if it rolls on you - you've already made your profit so step out. Tips: We started picking up mining shares last week as the sector has been beaten bloody and there's no reason they're so low. We also picked up some physical silver. When we get something out of The Ben Bernanke, gold and silver should start inching higher. I’m holding: - GDXJ at 20.20 (currently 20.20) – stop at 19.00 - GDX at 42.02 (currently 42.43) – stop at entry - CNX at 34.02 (currently 34.44) – stop at entry - ECA at 21.29 (currently 21.25) – stop at 20.50 - GLD (ETF for Gold) – in at 158.28, (currently 153.38) – no stop, AND - SLV (ETF for Silver) – in at 28.3 (currently 28.10) – no stop. To follow me on Twitter and get my daily thoughts and trades – my handle is: taylorpamm. Please be safe out there! Disclaimer: Expressed thoughts proffered within the BARRONS REPORT, a Private and free weekly economic newsletter, are those of noted entrepreneur, professor and author, RF Culbertson, contributing sources and those he interviews. You can learn more and get your free subscription by visiting: . Please write to to inform me of any reproductions, including when and where copy will be reproduced. You may use in complete form or, if quoting in brief, reference . If you'd like to view RF's actual stock trades - and see more of my thoughts - please feel free to sign up as a Twitter follower - "taylorpamm" is my handle. If you'd like to see RF in action - teaching people about investing - please feel free to view the TED talk that he gave on Fearless Investing: To unsubscribe please refer to the bottom of the email. Views expressed are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest and is not in any way a testimony of, or associated with Mr. Culbertson's other firms or associations. Mr. Culbertson and related parties are not registered and licensed brokers. This message may contain information that is confidential or privileged and is intended only for the individual or entity named above and does not constitute an offer for or advice about any alternative investment product. Such advice can only be made when accompanied by a prospectus or similar offering document. Past performance is not indicative of future performance. Please make sure to review important disclosures at the end of each article. Note: Joining BARRONS REPORT is not an offering for any investment. It represents only the opinions of RF Culbertson and Associates. PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN INVESTING IN MANAGED FUNDS. WHEN CONSIDERING ALTERNATIVE INVESTMENTS (INCLUDING HEDGE FUNDS) AN INVESTOR SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS AND OTHER SPECULATIVE INVESTMENT PRACTICES MAY INCREASE RISK OF INVESTMENT LOSS; MAY NOT BE SUBJECT TO THE SAME REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE INVESTMENT MANAGER. Alternative investment performance can be volatile. An investor could lose all or a substantial amount of his or her investment. Often, alternative investment fund and account managers have total trading authority over their funds or accounts; the use of a single advisor applying generally similar trading programs could mean lack of diversification and, consequently, higher risk. There is often no secondary market for an investor's interest in alternative investments, and none is expected to develop. All material presented herein is believed to be reliable but we cannot attest to its accuracy. Opinions expressed in these reports may change without prior notice. Culbertson and/or the staff may or may not have investments in any funds cited above. Remember the Blog: Until next week – be safe. R.F. Culbertson

This Week in Barrons – 5-6-2012 Is This the Big One? Take a peek at the following names (Google them if you wish), some of them guilty of outright crimes, while others just ethical deceit (none with jail time or even outrage): Angelo Mozilla, Aubrey McClendon, John Corzine, Franklin Raines, Hank Paulson, Larry Summers, Timothy Geithner, The Ben Bernanke, Dick Fuld, Ken Lewis and John Thain. The list could go on and on, but my point is that hundreds of slime balls (that have done really bad things), are still out there, thriving very nicely, and simple morality has been sucked down a black hole, never to be seen again. For the past couple years, we've been watching a gradual decline in stock market volumes. Some of the biggest up days we've had are on volumes that we used to see in 1994. Now we see that the trading robots are responsible for about 85% of all the volume. According to an analysis by Morgan Stanley’s Quantitative and Derivative Strategies group, trading by "real" investors is taking up the smallest share of US stock market volumes in over a decade. The proportion of US trading activity represented by buy and sell orders from mutual funds, hedge funds, pensions and brokerages, referred to as "real money" or institutional investors, accounted for just 16% of total market volume in the form of buying, and 13% via selling in the final quarter of last year. I’m old enough to remember the ‘gold rush’ associated with the Internet Boom of 1999 and 2000. I remember when people ignored others who told them to ‘get out of the market’. Why – because the truth was too hard for them to take. They wanted to believe that companies with nothing more than a business plan and no way to take in revenues were worth $200 per share. They wanted to believe the good times could go on forever. Many people got crushed and lost it all. It happened again in 2007 and 2008. Everyone likes the rah-rah news, the hype, but it’s the very twisted good news that ultimately ends up catching everyone off guard. On Friday I heard on my car radio’s local news: "News about the economy got better today as the labor department says the unemployment rate ticked down for yet another month in a row, now at just 8.1% as another 115K people were added to payrolls." I wonder how many millions heard that very same sort of broadcast that was pure horse hockey? Factually: - The "Household Survey" showed a LOSS of 165,000 jobs. The Bureau of Labor and Statistics (in a panic and not wanting to disappoint Obama) ADDED 206K jobs via the birth/death model. These 206K jobs Do Not Exist! The real number was negative not positive! In so far as the unemployment rate dropping, some 342K more people stopped looking for work and dropped out of the labor force. In fact, the labor participation rate has plunged to lows not seen in 30 years! In this twisted statistic, if you simply give up trying to get a job – you are not unemployed. So the unemployment rate fell (wink-wink) while another 342K people gave up trying to find work. - Since no one can find a job and unemployment is running out on folks, there has been a rush to try and qualify for disability from Social Security. Applications for disability are up 53% with 539K people going on the plan in the last 9 months. People need to live, so they're storming the gates for disability payments. That Social Security system, broke and ambulatory as it is, can't afford to have another million folks on it. - Over in Europe you can buy a Volkswagen Passat Diesel TDI that gets 72 MPG. Yes – 72 miles to the gallon! But you can't buy it here because if VW and Ford (who also makes a mega mileage car) were to flood the US with cars that got 70 MPG, the gasoline taxes that states take in would fall like a brick. We are coming into an election that is the single most significant one in my history. The non-economic reasons include: - Ron Paul still drawing thousands at every event he speaks. - Ruger having to put off accepting more orders for guns, because they can't keep up with the one million orders they already have. - Military folks training in cities with the police departments. - The Head of the EPA’s Oil Division saying that they would CRUCIFY all oil companies. - And our complete inability to open even a lemonade stand without a telephone book worth of permits given out by bureaucrats is beyond me. So, I think that this IS the big one! The Market... Famed investor Jimmy Rogers – this past week – came out and said: “We have inflation in the U.S., and it’s going to get worse. The Fed won’t be able to do anything about it. They’ve printed staggering amounts of money. They’ve taken staggering amounts of debt on their balance sheet. Much of it is garbage. I’m maintaining my commodity positions. Inflation will come whether the economy strengthens or it doesn’t, leading the Fed to ease further. Throughout history, when governments debase their currencies, you protect yourself by owning real assets. I remain bullish on gold and oil. I’m not selling my gold by any stretch. The surprise with oil is going to be how high it goes.” Now although we look perfectly situated for another 4 - 6% pull down, this isn't a ‘crash’ market. There is no way that Obama and Bernanke would let a ‘crash’ happen ahead of his election. The jobs report is being used to twist The Ben Bernanke's arm. "We want more free money" said Wall Street. And if you don't give it to us we will drop the market another 168 points! I expect some more selling to come, and eventually The Ben Bernanke will give in and give us more stimulus. The common thinking on Friday is that The Ben Bernanke will not offer up more QE due to the jobs report. Understand that The Ben Bernanke cannot let interest rates rise. The BANKS (not the people) need to have rates so low. The low rates are NOT so housing can recover. The rates are at 0% so banks can borrow at 0% and lend back at 5%, pocket the difference and lock in guaranteed money. This money is being used to offset the toxic Mortgage Backed Securities and Derivatives they all carry. If rates rise, the banks stop making money. So, in June Operation Twist ends. That means that we’re all ok with crappy employment, and ok with housing falling to all new lows AGAIN, during the most heated-nasty election race ever? "Helicopter Ben" made his whole thesis on the fact that the great depressions can be thwarted by massive injections of money. He's convinced if he prints enough, eventually things will heal. But in the meantime, there's no doubt whatsoever that he's going to unleash massive amounts of stimulus money. And the second it hits, the market will start on a rally that probably takes us to all time historic highs. But it will be the single most fake rally since the NASDAQ bubble, and when it collapses in mid 2013, you'd better be running for the hills. So, in the short term, I expect some more pouting. I think they'll whine and cry loudly. But sometime before June 11, The Ben Bernanke is going to have to tell us what he's going to do about the Twist expiring, and when he does, we will be off to the races. Now, if I'm wrong, and The Ben Bernanke has found religion and does not announce more stimulus to keep this market up for Obama - I suspect you'll find that he inconveniently has a heart attack. If you are not comfortable holding through a decline here, there's no shame in taking your profits and going to cash. Just be sure you're nimble enough to get back in the game when the next QE is announced. In terms of the metals, just recently Russian diplomats have tossed their hat in the "maybe we should have a gold backed global reserve" arena – something we’ve said for 2 years. People are tired of the dollar losing value, being stuck with them, and tired of seeing their currencies get pulled down because of them. It's my guess that sometime in mid 2013, corresponding with a crashing US market; we see some major commotion over the US Dollar. The COMEX had planned on hiking margin rates on Silver and Gold again on Monday, but they got so much heat from small dealers that they've pushed the hike off for 90 days. I imagine they are getting so much heat about the daily manipulation of the metals that another blatant push to keep the stuff down is too obvious right now. The bottom line is (as ugly as it sounds) if you woke up tomorrow and found the dollar had crashed, banks were closed, and your dollars wouldn't buy you a stick of gum – you may need a nice shiny one-ounce silver coin that would buy you dinner, or a gold coin that would feed your family for 3 months. One day the dollar will be replaced, and in the meantime, Gold and Silver feel like a tremendous insurance policy as well as an investment. Tips: A big shout out to BL for shorting names like: AH, DECK, CTCT last week. We have a very thin tape – and the losers are already showing signs of starting a bear market. This sounds like a broken record – but I’m really sitting in very little other than my old stand-buys of Gold and Silver: - TJX at 42.01 (currently = 41.74) stop at 41.40 - AXP at 59.09 (currently = 60.10) stop at entry - HD in at 50 (currently = 51.96) – stop at 51 - GLD (ETF for Gold) – in at 158.28, (currently 159.60) – no stop, AND - SLV (ETF for Silver) – in at 28.3 (currently 29.48) – no stop. To follow me on Twitter and get my daily thoughts and trades – my handle is: taylorpamm. Please be safe out there! Disclaimer: Expressed thoughts proffered within the BARRONS REPORT, a Private and free weekly economic newsletter, are those of noted entrepreneur, professor and author, RF Culbertson, contributing sources and those he interviews. You can learn more and get your free subscription by visiting: . Please write to to inform me of any reproductions, including when and where copy will be reproduced. You may use in complete form or, if quoting in brief, reference . If you'd like to view RF's actual stock trades - and see more of my thoughts - please feel free to sign up as a Twitter follower - "taylorpamm" is my handle. If you'd like to see RF in action - teaching people about investing - please feel free to view the TED talk that he gave on Fearless Investing: To unsubscribe please refer to the bottom of the email. Views expressed are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest and is not in any way a testimony of, or associated with Mr. Culbertson's other firms or associations. Mr. Culbertson and related parties are not registered and licensed brokers. This message may contain information that is confidential or privileged and is intended only for the individual or entity named above and does not constitute an offer for or advice about any alternative investment product. Such advice can only be made when accompanied by a prospectus or similar offering document. Past performance is not indicative of future performance. Please make sure to review important disclosures at the end of each article. Note: Joining BARRONS REPORT is not an offering for any investment. It represents only the opinions of RF Culbertson and Associates. PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN INVESTING IN MANAGED FUNDS. WHEN CONSIDERING ALTERNATIVE INVESTMENTS (INCLUDING HEDGE FUNDS) AN INVESTOR SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS AND OTHER SPECULATIVE INVESTMENT PRACTICES MAY INCREASE RISK OF INVESTMENT LOSS; MAY NOT BE SUBJECT TO THE SAME REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE INVESTMENT MANAGER. Alternative investment performance can be volatile. An investor could lose all or a substantial amount of his or her investment. Often, alternative investment fund and account managers have total trading authority over their funds or accounts; the use of a single advisor applying generally similar trading programs could mean lack of diversification and, consequently, higher risk. There is often no secondary market for an investor's interest in alternative investments, and none is expected to develop. All material presented herein is believed to be reliable but we cannot attest to its accuracy. Opinions expressed in these reports may change without prior notice. Culbertson and/or the staff may or may not have investments in any funds cited above. Remember the Blog: Until next week – be safe. R.F. Culbertson

This Week in Barrons - 5-6-2012

This Week in Barrons – 5-6-2012 Is This the Big One? Take a peek at the following names (Google them if you wish), some of them guilty of outright crimes, while others just ethical deceit (none with jail time or even outrage): Angelo Mozilla, Aubrey McClendon, John Corzine, Franklin Raines, Hank Paulson, Larry Summers, Timothy Geithner, The Ben Bernanke, Dick Fuld, Ken Lewis and John Thain. The list could go on and on, but my point is that hundreds of slime balls (that have done really bad things), are still out there, thriving very nicely, and simple morality has been sucked down a black hole, never to be seen again. For the past couple years, we've been watching a gradual decline in stock market volumes. Some of the biggest up days we've had are on volumes that we used to see in 1994. Now we see that the trading robots are responsible for about 85% of all the volume. According to an analysis by Morgan Stanley’s Quantitative and Derivative Strategies group, trading by "real" investors is taking up the smallest share of US stock market volumes in over a decade. The proportion of US trading activity represented by buy and sell orders from mutual funds, hedge funds, pensions and brokerages, referred to as "real money" or institutional investors, accounted for just 16% of total market volume in the form of buying, and 13% via selling in the final quarter of last year. I’m old enough to remember the ‘gold rush’ associated with the Internet Boom of 1999 and 2000. I remember when people ignored others who told them to ‘get out of the market’. Why – because the truth was too hard for them to take. They wanted to believe that companies with nothing more than a business plan and no way to take in revenues were worth $200 per share. They wanted to believe the good times could go on forever. Many people got crushed and lost it all. It happened again in 2007 and 2008. Everyone likes the rah-rah news, the hype, but it’s the very twisted good news that ultimately ends up catching everyone off guard. On Friday I heard on my car radio’s local news: "News about the economy got better today as the labor department says the unemployment rate ticked down for yet another month in a row, now at just 8.1% as another 115K people were added to payrolls." I wonder how many millions heard that very same sort of broadcast that was pure horse hockey? Factually: - The "Household Survey" showed a LOSS of 165,000 jobs. The Bureau of Labor and Statistics (in a panic and not wanting to disappoint Obama) ADDED 206K jobs via the birth/death model. These 206K jobs Do Not Exist! The real number was negative not positive! In so far as the unemployment rate dropping, some 342K more people stopped looking for work and dropped out of the labor force. In fact, the labor participation rate has plunged to lows not seen in 30 years! In this twisted statistic, if you simply give up trying to get a job – you are not unemployed. So the unemployment rate fell (wink-wink) while another 342K people gave up trying to find work. - Since no one can find a job and unemployment is running out on folks, there has been a rush to try and qualify for disability from Social Security. Applications for disability are up 53% with 539K people going on the plan in the last 9 months. People need to live, so they're storming the gates for disability payments. That Social Security system, broke and ambulatory as it is, can't afford to have another million folks on it. - Over in Europe you can buy a Volkswagen Passat Diesel TDI that gets 72 MPG. Yes – 72 miles to the gallon! But you can't buy it here because if VW and Ford (who also makes a mega mileage car) were to flood the US with cars that got 70 MPG, the gasoline taxes that states take in would fall like a brick. We are coming into an election that is the single most significant one in my history. The non-economic reasons include: - Ron Paul still drawing thousands at every event he speaks. - Ruger having to put off accepting more orders for guns, because they can't keep up with the one million orders they already have. - Military folks training in cities with the police departments. - The Head of the EPA’s Oil Division saying that they would CRUCIFY all oil companies. - And our complete inability to open even a lemonade stand without a telephone book worth of permits given out by bureaucrats is beyond me. So, I think that this IS the big one! The Market... Famed investor Jimmy Rogers – this past week – came out and said: “We have inflation in the U.S., and it’s going to get worse. The Fed won’t be able to do anything about it. They’ve printed staggering amounts of money. They’ve taken staggering amounts of debt on their balance sheet. Much of it is garbage. I’m maintaining my commodity positions. Inflation will come whether the economy strengthens or it doesn’t, leading the Fed to ease further. Throughout history, when governments debase their currencies, you protect yourself by owning real assets. I remain bullish on gold and oil. I’m not selling my gold by any stretch. The surprise with oil is going to be how high it goes.” Now although we look perfectly situated for another 4 - 6% pull down, this isn't a ‘crash’ market. There is no way that Obama and Bernanke would let a ‘crash’ happen ahead of his election. The jobs report is being used to twist The Ben Bernanke's arm. "We want more free money" said Wall Street. And if you don't give it to us we will drop the market another 168 points! I expect some more selling to come, and eventually The Ben Bernanke will give in and give us more stimulus. The common thinking on Friday is that The Ben Bernanke will not offer up more QE due to the jobs report. Understand that The Ben Bernanke cannot let interest rates rise. The BANKS (not the people) need to have rates so low. The low rates are NOT so housing can recover. The rates are at 0% so banks can borrow at 0% and lend back at 5%, pocket the difference and lock in guaranteed money. This money is being used to offset the toxic Mortgage Backed Securities and Derivatives they all carry. If rates rise, the banks stop making money. So, in June Operation Twist ends. That means that we’re all ok with crappy employment, and ok with housing falling to all new lows AGAIN, during the most heated-nasty election race ever? "Helicopter Ben" made his whole thesis on the fact that the great depressions can be thwarted by massive injections of money. He's convinced if he prints enough, eventually things will heal. But in the meantime, there's no doubt whatsoever that he's going to unleash massive amounts of stimulus money. And the second it hits, the market will start on a rally that probably takes us to all time historic highs. But it will be the single most fake rally since the NASDAQ bubble, and when it collapses in mid 2013, you'd better be running for the hills. So, in the short term, I expect some more pouting. I think they'll whine and cry loudly. But sometime before June 11, The Ben Bernanke is going to have to tell us what he's going to do about the Twist expiring, and when he does, we will be off to the races. Now, if I'm wrong, and The Ben Bernanke has found religion and does not announce more stimulus to keep this market up for Obama - I suspect you'll find that he inconveniently has a heart attack. If you are not comfortable holding through a decline here, there's no shame in taking your profits and going to cash. Just be sure you're nimble enough to get back in the game when the next QE is announced. In terms of the metals, just recently Russian diplomats have tossed their hat in the "maybe we should have a gold backed global reserve" arena – something we’ve said for 2 years. People are tired of the dollar losing value, being stuck with them, and tired of seeing their currencies get pulled down because of them. It's my guess that sometime in mid 2013, corresponding with a crashing US market; we see some major commotion over the US Dollar. The COMEX had planned on hiking margin rates on Silver and Gold again on Monday, but they got so much heat from small dealers that they've pushed the hike off for 90 days. I imagine they are getting so much heat about the daily manipulation of the metals that another blatant push to keep the stuff down is too obvious right now. The bottom line is (as ugly as it sounds) if you woke up tomorrow and found the dollar had crashed, banks were closed, and your dollars wouldn't buy you a stick of gum – you may need a nice shiny one-ounce silver coin that would buy you dinner, or a gold coin that would feed your family for 3 months. One day the dollar will be replaced, and in the meantime, Gold and Silver feel like a tremendous insurance policy as well as an investment. Tips: A big shout out to BL for shorting names like: AH, DECK, CTCT last week. We have a very thin tape – and the losers are already showing signs of starting a bear market. This sounds like a broken record – but I’m really sitting in very little other than my old stand-buys of Gold and Silver: - TJX at 42.01 (currently = 41.74) stop at 41.40 - AXP at 59.09 (currently = 60.10) stop at entry - HD in at 50 (currently = 51.96) – stop at 51 - GLD (ETF for Gold) – in at 158.28, (currently 159.60) – no stop, AND - SLV (ETF for Silver) – in at 28.3 (currently 29.48) – no stop. To follow me on Twitter and get my daily thoughts and trades – my handle is: taylorpamm. Please be safe out there! Disclaimer: Expressed thoughts proffered within the BARRONS REPORT, a Private and free weekly economic newsletter, are those of noted entrepreneur, professor and author, RF Culbertson, contributing sources and those he interviews. You can learn more and get your free subscription by visiting: . Please write to to inform me of any reproductions, including when and where copy will be reproduced. You may use in complete form or, if quoting in brief, reference . If you'd like to view RF's actual stock trades - and see more of my thoughts - please feel free to sign up as a Twitter follower - "taylorpamm" is my handle. If you'd like to see RF in action - teaching people about investing - please feel free to view the TED talk that he gave on Fearless Investing: To unsubscribe please refer to the bottom of the email. Views expressed are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest and is not in any way a testimony of, or associated with Mr. Culbertson's other firms or associations. Mr. Culbertson and related parties are not registered and licensed brokers. This message may contain information that is confidential or privileged and is intended only for the individual or entity named above and does not constitute an offer for or advice about any alternative investment product. Such advice can only be made when accompanied by a prospectus or similar offering document. Past performance is not indicative of future performance. Please make sure to review important disclosures at the end of each article. Note: Joining BARRONS REPORT is not an offering for any investment. It represents only the opinions of RF Culbertson and Associates. PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN INVESTING IN MANAGED FUNDS. WHEN CONSIDERING ALTERNATIVE INVESTMENTS (INCLUDING HEDGE FUNDS) AN INVESTOR SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS AND OTHER SPECULATIVE INVESTMENT PRACTICES MAY INCREASE RISK OF INVESTMENT LOSS; MAY NOT BE SUBJECT TO THE SAME REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE INVESTMENT MANAGER. Alternative investment performance can be volatile. An investor could lose all or a substantial amount of his or her investment. Often, alternative investment fund and account managers have total trading authority over their funds or accounts; the use of a single advisor applying generally similar trading programs could mean lack of diversification and, consequently, higher risk. There is often no secondary market for an investor's interest in alternative investments, and none is expected to develop. All material presented herein is believed to be reliable but we cannot attest to its accuracy. Opinions expressed in these reports may change without prior notice. Culbertson and/or the staff may or may not have investments in any funds cited above. Remember the Blog: Until next week – be safe. R.F. Culbertson

This Week in Barrons – 4-29-2012 Banc of Obama? So what’s changed? As I look up from the cheap seats, I see a landscape that includes a racial issue in Florida, an economy in trouble, a jobs and housing situation that isn’t moving in the right direction – and then elements like this: - The Department of Labor is poised to put the finishing touches on a rule that would apply child-labor laws to children working on family farms, prohibiting them from performing a list of jobs on their own family’s land. Under the rules, children under 18 could no longer work "in the storing, marketing and transporting of farm product raw materials." Can anyone really tell me what good comes out of this? Farms lose a worker, kids lose the ability to learn responsibility – and all we’re doing is extending the "big brother nanny state". Given we produce more food per acre than anywhere on the planet, did that happen as a result of rules like this? - In New York, the major banquet halls that host fantastic weddings, and bah mitzvahs and conferences often end up with tons of food that they were giving it to the homeless. Recently the mayor swept in with his food Nazi's and put a halt to that under the guise of what if someone got sick? So now the homeless are only allowed to get state approved food from state approved food banks, and the leftover food goes to garbage dumps. - President Obama recently said: "America's source of economic strength has been her historical embrace of collective action, wealth redistribution, and government policies that have protected workers from the ravages of the wealthy. Prosperity grows outward from the middle class, it never trickles down from the success of the wealthy." Really? This is the class warfare mongering that I find it detestable. America was built on a lot of things, but redistributing wealth is not one of them. Telling poorer folks that their situation is all because the "evil rich man" put them there is disgusting. The unfortunate part for the President is that wealth must first be produced before it can be redistributed. Redistribution always creates disincentives that result in less wealth being created, and ALL the societies that have attempted to create wealth through redistribution have failed miserably. When you send out hundreds of thousands of newsletters, you can bet you get a good amount of "feedback". One of the most common themes I continue to get is: "I've lost the America I knew and loved". I'm awfully concerned. The Market: All we needed was a wink and a nod from Bernanke and the next thing you know we are about to threaten the near term highs. As soon as The Ben Bernanke said he had all manner of tools at his disposal to make sure the economy doesn't fail, the market started going UP. Of course it shouldn't be going up and one day it’s going to come down very hard, but until it does, we have “The Bernanke Put". We are fast approaching another one of those "could be" days. Back on April 4th the S&P topped out at 1,422, the DOW hit 13,297 (which was it's second attempt to bust over 13,300), and then the bottom fell out with both indexes pulling down very hard. With the DOW at 13,133, and the S&P at 1,403 – are we going to be challenging those levels again soon? If we get up and over those two highs, then it's pretty much blue sky ahead and we could be in for quite a bullish treat. But there are a lot of issues here. Everyone with a functioning brain cell knows it's “The Ben Bernanke’s Bucks” doing the work. Yes he said he's willing to continue pumping in the bucks and frankly he has no choice. But each day: - The volume on the NYSE sags. - We see more and more companies doing buy backs to boost their share prices higher. - And we hear of more and more people extracting money from their mutual funds. Then we have Apple (AAPL), after shedding a ton of points, they did great on earnings and jumped over $50 in a day. But now Apple is fading as the market is going higher. When the single most successful stock on the board can't continue up with the rest of the market, you need to be wary. In other words, this market rally is really thin. It's being pushed and prodded higher, but when you look at a chart, it's a sideways mess of a chop. While I think it's possible we challenge the upper end again, I'm not so sure we're going to get past it. In fact, I feel like a bit of a sideways slide is in order for at least the beginning of the week. One of the key things we watch is the XLF - which is the Exchange Traded Fund (ETF) for the financials. If it can clear $16.00, we are going to speed higher, but if it breaks under $14.90 we're on our way lower in a hurry. Currently it is in the middle, ending Friday at $15.50. Why is the XLF so special? Well, the way The Ben Bernanke has this market rigged, each day – the participating banks get billions of dollars to do their "Operation Twist" buying and selling. These participating banks get a very large commission for doing this, and they use these commissions to buy up stocks in other banks first, then in the broader market second. So, as long as the "financials" are still holding up, you have to consider the trend as stable. When the biggest of the big boys either push the financials significantly higher, or pull out and they fall – that’s really the key for knowing where you should be (long or short). Again, with the XLF in the middle – we personally haven't gone to cash, but we haven't loaded the boat in our trading accounts either. Slow and steady is the game right now. I think on Monday, they will "try" to get us going, but it will sputter out we will be left digesting last week’s big gains. But eventually, The Ben Bernanke has no choice but to announce his latest gimmick that will replace “Operation Twist” when it runs it's course in June. When that happens we will rally from that day into the election; however, between now and ‘that day’ – be on guard. Another major situation is coming to pass in June. Because of the sanctions barring Iran from using the SWIFT system to settle their oil sales, India has agreed to buy Iranian oil in Gold. Now, that is pretty big news in and of itself, because we are seeing more and more countries looking to use anything but the depreciating US dollar. But wait – because of more sanctions imposed by the NDAA back in December, it seems that China will not be "allowed" to buy Iranian oil in conventional "yuan to dollar" terms starting in June. Now China has accumulated hundreds of billions of US dollars, and they have Gold. If they are forced to buy Iranian oil in Gold, they are going to go all out to dispose of dollars and buy up more Gold. This could a catalyst that jumpstarts the next leg higher in gold and pushes it over $2,000 an ounce. So, June is becoming a pivotal month on a lot of fronts! Tips: Currently, I’m really sitting in very little other than my old stand-buys of Gold and Silver: - EROC at 9.43 (currently = 9.42) stop at 9.22 - TJX at 42.01 (currently = 42.48) stop at 41.40 - AXP at 59.09 (currently = 60.17) stop at entry - HD in at 50 (currently = 51.92) – stop at 51 - GLD (ETF for Gold) – in at 158.28, (currently 161.63) – no stop, AND - SLV (ETF for Silver) – in at 28.3 (currently 30.36) – no stop. To follow me on Twitter and get my daily thoughts and trades – my handle is: taylorpamm. Please be safe out there! Disclaimer: Expressed thoughts proffered within the BARRONS REPORT, a Private and free weekly economic newsletter, are those of noted entrepreneur, professor and author, RF Culbertson, contributing sources and those he interviews. You can learn more and get your free subscription by visiting: . Please write to to inform me of any reproductions, including when and where copy will be reproduced. You may use in complete form or, if quoting in brief, reference . If you'd like to view RF's actual stock trades - and see more of my thoughts - please feel free to sign up as a Twitter follower - "taylorpamm" is my handle. If you'd like to see RF in action - teaching people about investing - please feel free to view the TED talk that he gave on Fearless Investing: To unsubscribe please refer to the bottom of the email. Views expressed are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest and is not in any way a testimony of, or associated with Mr. Culbertson's other firms or associations. Mr. Culbertson and related parties are not registered and licensed brokers. This message may contain information that is confidential or privileged and is intended only for the individual or entity named above and does not constitute an offer for or advice about any alternative investment product. Such advice can only be made when accompanied by a prospectus or similar offering document. Past performance is not indicative of future performance. Please make sure to review important disclosures at the end of each article. Note: Joining BARRONS REPORT is not an offering for any investment. It represents only the opinions of RF Culbertson and Associates. PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN INVESTING IN MANAGED FUNDS. WHEN CONSIDERING ALTERNATIVE INVESTMENTS (INCLUDING HEDGE FUNDS) AN INVESTOR SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS AND OTHER SPECULATIVE INVESTMENT PRACTICES MAY INCREASE RISK OF INVESTMENT LOSS; MAY NOT BE SUBJECT TO THE SAME REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE INVESTMENT MANAGER. Alternative investment performance can be volatile. An investor could lose all or a substantial amount of his or her investment. Often, alternative investment fund and account managers have total trading authority over their funds or accounts; the use of a single advisor applying generally similar trading programs could mean lack of diversification and, consequently, higher risk. There is often no secondary market for an investor's interest in alternative investments, and none is expected to develop. All material presented herein is believed to be reliable but we cannot attest to its accuracy. Opinions expressed in these reports may change without prior notice. Culbertson and/or the staff may or may not have investments in any funds cited above. Remember the Blog: Until next week – be safe. R.F. Culbertson

This Week in Barrons - 4-22-12

This Week in Barrons – 4-22-2012

Somethin’s coming, somethin’ ______

This coming week is going to be very interesting: (a) France has elections brewing – and Sarkozy is in danger, (b) the IMF (International Monetary Fund) is meeting again, but the ‘biggie’ is (c) the FED meeting. We had Quantitative Easing #1 (QE1), then QE2, and now we’re living "Operation Interest Rate Twist" (which is the Fed buying and selling short term notes against long term notes – in order to keep long term interest rates down – to help the housing industry). There is really a classic display of economic incest here – as the Federal Reserve is owned by the very banks that The Ben Bernanke is printing and giving money to. So he can’t let the banks fail or the entire Fed fails. Anyway, "Operation Twist" is scheduled to end in June, and the minute it ends, the market will force interest rates higher. So I’m pretty sure that somethin’s coming – I just don’t know what or when. We have The Ben Bernanke meeting for two days this week, and if he doesn't announce what he's going to do about the expiring ‘Twist’, the market will be grumpy. And if he doesn’t hint strongly enough about it, the market could still pout. Why? Because the market wants its new stimulus now!

The market these past couple of months has been going thru a nasty chop. We are basically at the same exact levels we were at in February. Yep – in two months we’ve basically gone nowhere. We’re also half way between two trend lines and breaking free of either of them will either send the market higher or collapse it to the 11k region. I think we're going to move sideways in the channel for a while longer. Then in June, The Ben Bernanke will announce his new "operation" and we will then make a wild run up to the election. In the meantime however, we have just as much ability to slide down to the lower boundary of 12,700 as we do challenging the 13,300 level.

Many of you have written in asking about my continued thoughts on gold and silver. We know that at some point The Ben Bernanke's going to inject some more "stimulus" and that will cause gold to rise. Gold rises in times of uncertainty as well as in times of inflation, and if we’re printing another $1 trillion, that is most certainly inflationary. Therefore, sometime between now and the big announcement is a good time to be accumulating gold or the gold ETF. I know gentlemen like Jimmy Rodgers (who’s been very right on gold) thinks that it could dip to $1,100 – but frankly I don’t think China is going to let it get anywhere near $1,500 before they open their wallets. And remember, the Chinese have hundreds of billions of paper dollars ready to be exchanged! Also the good economists (that have been gold bulls) have recently chilled on the investment and that adds somewhat of a contrarian twist. The upcoming election is also going to be influential to gold. If Obama is re-elected, his views on Social programs will cause The Ben Bernanke to continue printing, and at that point I believe China will embark on breaking free of the US dollar – and those repercussions are hard to imagine. However, with a regime change could come fiscal responsibility and this could give the Chinese hope, but we’ll still have existing inflation to contend with. Either way gold will rise.

What about silver? I think that silver has a date with $70 (it’s currently around $30). But right now we need to live through the whole short-term, massive silver manipulation thing. The lawsuits are there, the CFTC and the SEC know the fraud that goes on – they need to allow JP Morgan and others a way out of their naked shorts, and to make as much profit as they can before they end the fraud graciously. However, we are racing headlong into a silver shortage. Not of just coins and bars, but of the industrial silver that goes into electronics, aviation, the military, etc. At some point, (no matter how manipulated) the price will go up due to supply and demand. Once we finally end silver’s naked shorting and manipulations, I suspect my $70 call for silver will be closer to $125.

The Market....

The market is not for the feint of heart right now. 200-point up-days are followed by 160-point down-days, and we end up running in place. I think we will break to the upside, but only after some wicked chop and fade before The Ben Bernanke’s next announcement. Once The Ben Bernanke announces his next gimmick, we "should" be on our way to new highs. We will head for these new highs not due to earnings or a better economy, just the simple fact that if he continues to print and hand money to the banks, the banks get a boost to their bottom lines, and they get to use the money to play in the market.

Unless something stunning comes out of The Ben Bernanke this week, I will not be surprised if the market continues to trend lower for a few weeks, and then starts firming up ahead of the next Fed meeting in early June. So, if you're carrying a lot of long side trades, please be careful.

One of the keys for me is to watch the XLF. The XLF is the symbol for the Exchange Traded Fund (ETF) for the financials. Currently, it’s just pennies over it’s 50-day moving average, and if it sinks under that, it could quickly go to its recent low of $14.95. A break under $14.95 is a clear signal that we're about to see the market dump out for a bit, as it's the banks that rule the roost.

Tips:

Currently, I’m really sitting in very little other than my old stand-buys of Gold and Silver:
- HD in at 50 (currently = 51.61) – stop at 51
- GLD (ETF for Gold) – in at 158.28, (currently 159.45) – no stop, AND
- SLV (ETF for Silver) – in at 28.3 (currently 30.65) – no stop.

To follow me on Twitter and get my daily thoughts and trades – my handle is: taylorpamm.

Please be safe out there!

Disclaimer:
Expressed thoughts proffered within the BARRONS REPORT, a Private and free weekly economic newsletter, are those of noted entrepreneur, professor and author, RF Culbertson, contributing sources and those he interviews. You can learn more and get your free subscription by visiting: .

Please write to to inform me of any reproductions, including when and where copy will be reproduced. You may use in complete form or, if quoting in brief, reference .

If you'd like to view RF's actual stock trades - and see more of my thoughts - please feel free to sign up as a Twitter follower - "taylorpamm" is my handle.

If you'd like to see RF in action - teaching people about investing - please feel free to view the TED talk that he gave on Fearless Investing:

To unsubscribe please refer to the bottom of the email.

Views expressed are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest and is not in any way a testimony of, or associated with Mr. Culbertson's other firms or associations. Mr. Culbertson and related parties are not registered and licensed brokers. This message may contain information that is confidential or privileged and is intended only for the individual or entity named above and does not constitute an offer for or advice about any alternative investment product. Such advice can only be made when accompanied by a prospectus or similar offering document. Past performance is not indicative of future performance. Please make sure to review important disclosures at the end of each article.

Note: Joining BARRONS REPORT is not an offering for any investment. It represents only the opinions of RF Culbertson and Associates.

PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY FOR GAIN WHEN INVESTING IN MANAGED FUNDS. WHEN CONSIDERING ALTERNATIVE INVESTMENTS (INCLUDING HEDGE FUNDS) AN INVESTOR SHOULD CONSIDER VARIOUS RISKS INCLUDING THE FACT THAT SOME PRODUCTS AND OTHER SPECULATIVE INVESTMENT PRACTICES MAY INCREASE RISK OF INVESTMENT LOSS; MAY NOT BE SUBJECT TO THE SAME REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE INVESTMENT MANAGER.

Alternative investment performance can be volatile. An investor could lose all or a substantial amount of his or her investment. Often, alternative investment fund and account managers have total trading authority over their funds or accounts; the use of a single advisor applying generally similar trading programs could mean lack of diversification and, consequently, higher risk. There is often no secondary market for an investor's interest in alternative investments, and none is expected to develop.

All material presented herein is believed to be reliable but we cannot attest to its accuracy. Opinions expressed in these reports may change without prior notice. Culbertson and/or the staff may or may not have investments in any funds cited above.

Remember the Blog:
Until next week – be safe.

R.F. Culbertson

This Week in Barrons - 4-15-2012

This Week in Barrons – 4-15-2012

Where is Everyone?

Most people are woefully underfunded for their retirement. Surveys tell us that most people are rushing into their late 60's with under $50K to their name. Add in an economic collapse, an out of control Fed, lying regulators, Bernie Madoff, and so on and we sit here asking ourselves: “Where has the stock trading volume gone?” We are trading at 46% less volume now, than we did in 2007. Today, 70% of the trading is ‘high frequency trading’ - accomplished by machines trading back and forth to one another in nano-seconds. If you discount those - the true volume levels are less than 20% of what we had in 2007! So where did everyone go?

The answer is a lot easier than the rationale. Every day for the past 4 years CNBC has talked about all the cash on the sidelines, and they are absolutely correct. Approximately $8 Trillion is parked in some form of make believe "security". America's combined demand deposits, checkable deposits, savings deposits, and time deposits have hit an all time high. Why is this – because people are tired of the lies, flash crashes, fake accounting, insider trading, screwy earnings, FASB mis-regulations, FED manipulation and finally Wall Street loosing their money! And this is why the game for Obama and The Ben Bernanke, Geithner and the entire EU is so very important. They have no choice but to try and get this market "up", and lure folks back into the market. Yes, they want it up so that they can point to it and say: "Look how great the economy is!" But they also need it up, to try to beg folks to come back to it because currently the only thing keeping our market liquid is high frequency trading. And without a ‘liquid market’ companies can’t live or hire! This is why you can have the slowest volume day in a year, and yet gain 180 points. This is why you're up 200 one day, down 190 the next. For all intents and purposes, the market is "broken". The Ben Bernanke is trying to entice people back by giving primary dealers money every day, so they can buy AAPL (and the likes) and keep the market alive. He hopes that if they rig it higher, that people's greed will take over. They'll worry they are missing the train and want to hop on.

Unfortunately the over 60 year olds are thinking: "Screw this, one more bad market crash and I'm eating dog food for retirement". The over 50’s are saying: “You want me to come out of bonds, cash and money markets, to invest in insolvent bank stocks?" We’re caught in a period that has the potential to be many times worse than the Great Depression. Consider this: in 1930 the entire population of the US was 122 million people – currently we have 47 million on food stamps. In 1930, Europe was doing well – currently Europe is a disintegrating disaster.

Unfortunately for The Ben Bernanke, I don't think the masses are coming back to the market any time soon. They'd rather be comfortable with the return OF their money, than any return ON their money. They see all the ills in living color and they wonder how on earth can the market be going up, when everything looks so dim? Then they think about it and they remember 2007 and the market crashing to 6600. Oh – by the way – if everyone did manage to come back into the market, and that wave of $8 Trillion rushed back into equities, the resultant wave of inflation would probably run somewhere in the 25% range, and ultimately end up destroying the economy and the market. So maybe it's best if everyone just stays away!

The Market:
We exist in a period that will be awfully frightening for the next few years. Not only:
- are baby boomers retiring,
- we’re having a nasty election year,
- a massive tax bomb is going to land on us soon,
- there is no real volume in the markets,
- debts are piling higher and higher,
- Spain is just one announcement away from implosion,
- we’re going to continue to see dramatic volatility;
- therefore, this market is NOT for the faint of heart!

Notice, I did not mention earnings. I did not mention them, because lately they’re an excuse to explain things more than they're a reason for doing anything. For example: Google’s estimated over 90 days ago – that it would post $8.14 B in revenue for this quarter. Now Google is basically a pay per click advertising company and is really at the mercy of how many Internet searches the public does. This week they posted earnings and guess where the revenues came in: $8.14 billion. Magic aye?

Earnings are becoming humorous. We are seeing one-time charges applied to energy, payroll, and taxes. Yet the tradebots are programmed to read and react to all the news. Tradebots today are programmed to look for certain word patterns in a press release, and based on the probability of that word string being positive or negative trade it, or fade it.

So, given we have chop – you can only deal with it one of two ways: day trade or sit on your hands. In the robo trading world we live in now, once a clearly established trend is over, (and the last trend ended in mid March) trying to hold things can get you killed.

Right now the DOW and S&P are under their 50-day moving averages. That is something that hasn't happened since November. If they don't get significantly over these averages and soon, the chances for more "correction" are very strong indeed.

In the first quarter of 2012 the NASDAQ gained 18%, while the DOW and S&P gained 13%. These are great gains for an entire YEAR, yet we got them in 4 months; therefore my finger is currently firmly planted next to the "hide in cash" button. It won't take much for me to make the move and let all that money sit in a money market doing nothing.

As the rest of this earnings season shapes up, we're sure to see big up days and big down days. However, on a technical level, I see more reason to believe the market will fall, more than I see a reason for it to climb back to the recent high at 13,300. Now having said that - more QE is coming. When QE is announced you're going to want to be very LONG as we could gain 500 points in a couple days. But since we don't know when they will announce it, the market is free to fade, bounce, fall, bounce – so please be careful out there.

Tips:

I sold the DIA puts last week for a tidy profit – that was just a matter of timing – and I’m sitting on very little other than my old stand-buys of Gold and Silver:
- HD in at 50 (currently = 50.96) – stop at 50.40
- AIG in at 30.22 (currently = 32.31) – stop at 32
- GLD (ETF for Gold) – in at 158.28, (currently 160.6) – no stop, AND
- SLV (ETF for Silver) – in at 28.3 (currently 30.60) – no stop.

To follow me on Twitter and get my daily thoughts and trades – my handle is: taylorpamm.

Please be safe out there!

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R.F. Culbertson