Archive for January, 2008

ALIENS HAVE TAKEN OVER WASHINGTON!

Yes, you heard me right! ALIENS HAVE TAKEN OVER WASHINGTON! How else can you explain it?

Here’s my theory: President Bush, his advisory staff, and most of Congress were kidnapped by aliens from another planet, who replaced them with identically-looking alien clones. I can only speculate as to the reason for this grand conspiracy. Perhaps they plan to conquer our civilization by destroying our economy from within.
Considering the way things are going, it appears as if they will be successful. You had better get busy learning how to speak ZORK! (If you have been a regular listener to Fed Chairman Ben Bernanke’s testimonies before Congress, and if you believe what he has been saying, then there is no need for you to worry – you are already half way there!)
Here is a true story:
My mother worked as a teller in a bank during the 60’s and 70’s, so when I was a child the family conversations would sometimes gravitate to the subject of money. I remember once asking my mother, “If the government can print as much money as they want, then why don’t they just print enough money to give every American a million dollars, so everyone would be a millionaire and no one would be poor.”  
My mother only had a high school education, and she was certainly no economists. But she did have common sense – you know, that rare commodity that is so lacking in our nation’s capital today. Here is how she answered my question, “If everyone had a million dollars, then no one would be any better off, because the prices of everything that we buy would go up so much that it could take a million dollars just to buy a loaf of bread.”
Although she didn’t use the word “inflation” in her explanation, it is quite obvious that my mother had a better understanding of inflation than almost anyone in Washington today.
Folks, what is the difference between giving every American one million dollars, and giving every American 600 dollars? The only difference is the amount!
The 150 billion dollar “economic stimulus” package is a farce! It is nothing more than an attempt to buy votes and curry favor in an election year, so that the people who are currently in power can remain in power. Giving every American $600 to spend will do nothing to help the economy. What it will do is increase inflation, the national debt, and our indebtedness to foreign nations! It will also further destroy the dollar. It will be like trying to put out a fire by throwing gasoline on it! There is no surer way to bring our nation down, than to bring down our economy. Surely our political leaders would not want such a fate for our great nation! That is why I think that our political leaders have been replaced by alien clones. What else could it be? We must throw them all out and replace them with real Americans – you know, those freedom-loving people who wrote the Constitution in order to limit the size and power of government.

Fed in Panic Mode

 

As I am writing this early Monday morning, before the opening of the stock market, I am watching CNBC’s financial network. It is funny to see how the Fed (and the markets) are panicking right now. Today the DOW futures is down 500 points (in response to yesterday’s huge decline in the European and other markets), and they know that when the stock market opens today there is going to be a crash if they don’t do something right now. So the Fed just announced a three quarters point “emergency” cut in the interest rates (to 3.5%.)  This is HUGE! (The recent cuts have been half a point. This is the first 3/4 point cut since 1984.) Also, at the same time that this occurred, Henry Paulson, the Secretary of the Treasury, was on the network LIVE talking about the new 150 billion dollar “stimulus package” and how it is going to be “swift” and “broad based.”  (They actually interrupted Paulson’s live speech to make this emergency interest cut announcement!) This all occurred between 7:00 and 7:20 AM CT, before the stock market open, which again demonstrates that they are in panic mode. (They are predicting another.25 to .50 cut when the Fed meets next week.)
This will definitely provide a shot in the arm for the stock market today, but it is likely to be temporary. Jim Puplava is predicting a very bad first quarter in 2008 (which we are experiencing now), followed by two good quarters in the middle of the year (due to all this excess liquidity (money creation) and these stimulants) followed by a very bad last quarter in 2008 (from a recession to an eventual depression.) So even if things begin to look better into the year, this doesn’t mean that we will be over the hard times. It is just beginning.
What is gold and silver doing now? Predictably, today, they have pulled back quite a bit, as the large investors are liquidating some of their profitable plays, in order to cover their margin losses. This is at the same time that the metals were already “correcting” for some of their recent huge advances. What this represents right now is a good buying opportunity, right before the next advance in the metals, which will be soaring! (Since the aforementioned events this morning, gold and silver prices have already reversed, recovering some of their recent loses, and are on the way up again, but not yet at their recent highs!)
Yesterday, I was at an estate sale, and as I was looking at a silver coin, a dealer of an antique shop, who was watching me, said, “Everyone is looking for sterling now. People are coming into my shop every day asking for sterling!” All indications are that we are getting closer and closer to the precious metals panic spike! Gold will be in the thousands, and silver will be $50 or more. (I still think, as does Jim Puplava, that silver will outperform gold.)
The stock market opens in 20 minutes. It is going to be a wild opening. We are living in very interesting times. Got Silver?

Gold Falls to $880 Today

Gold fell to $880 today. This is the expected pull-back I spoke of in my last post, and the BUYING OPPORTUNITY that I also spoke about! Silver fell slightly ending the day at about $16, following gold’s lead, as it almost always does, but still remaining strong.
The DOW fell over 300 points today and is just above 12000 (down from its previous high of over 14000.) If anyone still has their money in stocks rather than gold and silver, then they are either brain dead, listening to the wrong people, or not paying attention. Gold and silver could still fall lower in the current pull-back or “correction,” but I don’t think that they are likely to pull back much if any, considering the DOW (more people are going to be scared out of stocks and putting their money into precious metals as a safe-haven.) We are dangerously close to the inevitable panic spike in gold and silver prices. (The one that people will be kicking themselves for missing.) I don’t know if the spike will occur this year, or the next, or the year after that. If I could make predictions like that then I would be rich. But rest assured that it will occur, and millions of people will be kicking themselves in the butt of missing it. Hind sight is 20/20. In the meantime, gold and silver prices will continue to climb.
I listened to Fed Chairman Ben Bernanke’s testimony before the Congressional Budget Sub-Committee today. He was obviously shaken and unsure of himself. He used the phrase “you know” at least a dozen times, indicating that he didn’t know what to say, which is not usual for him. He said that he is not expecting a recession in 2008. The man is obviously a liar because there is no doubt that we are already in a recession, and 2008 will most assuredly get worse. Ben is evil but he is no fool. He knows as well as anyone else that we are in a recession that is going to get much, much worse, but he is lying in order to try to maintain some confidence in the DOW and the U.S. dollar. He also warned Congress that they have to stop spending like a drunken sailor (my words, not his.) When a Congressman expressed some concerns about our nation’s 9 trillion dollar federal debt, Ben said that that was nothing compared to the federal debt that is off the record – specifying the unfunded liabilities (such as Medicare and Social Security.) IT DOESN’T TAKE A GENIUS TO READ BETWEEN THE LINES FOLKS!

Gold and Silver

As I am writing this on Monday morning, Jan. 14, 2008, the spot price of gold is $906.40 and the spot price of silver is $16.43. (Those numbers are huge, but 5 years from now we will look back at them in amazement, remarking at what an excellent buy gold was at $900 and silver was at $16 way back in 2008!)
Some have looked at the most recent increases in the metals, and have noticed how gold has outperformed silver percentage-wise. You may remember that I have always predicted that silver would outperform gold (percentage-wise) so what’s going on?
Most people agree that the current bull market in the metals began right around 2000-2001. The average price of gold in 2000 was $279.11 and the average price of silver was $4.95. Compared to today’s prices, gold has increased 324% since 2000, and silver has increased 332%. So in actuality, gold has not outperformed silver. It’s just that silver greatly outperformed gold at first, and now gold is catching up somewhat.
I listened to Jim Puplava over the weekend and he is of the opinion that in 2008, silver will outperform gold again. And I am still of the opinion that, before this mother of all bull markets is complete, (which probably won’t occur for another 10 years or more), we will look back and see that silver greatly outperformed gold overall. Now I am not saying that you should put all your eggs in one basket, and so I advise putting some of your precious metals investments in gold as well as silver, with much lesser amounts in platinum and palladium. (I also don’t recommend that you put ALL of your investment funds in precious metals alone, certainly, some should be in precious metals stocks – like mining companies – as well as energy, such as oil, natural gas, uranium, and alternative energy technologies – no, NOT ethanol, but General Electric.)
Gold and silver prices have done some remarkable things over the past few years. But up to now, all that we have seen is the beginnings of the birth pains. The “big event” is still to come. But if you hesitate too much longer, you may miss the big event entirely!
Note: After every big “run-up” in metal prices there is a little “pull back.” At the present time gold and silver prices may be due to a little pull back. It’s like the metal prices take two steps forward, and then one step backward, before the next two steps forward again. This is the normal progression. (Although at some point, due to panic, there will be a huge spike upward that you might miss if you are waiting for a pull back before buying.) Every time you see one of those little pull backs, you should see them as an opportunity to add to your precious metals portfolio. The human tendency is to have doubts when the price is falling, and many investors are shaken out (sell in a panic) when a big pull back occurs. In effect, they are buying high and selling low – the exact opposite of what you should be doing – buying low and selling high. If you understand the fundamentals (like the relationship between the dollar and precious metals) you will know that there is no where for precious metals to go – but up, up and UP! Ignore the little bumps and dips in the road, keep your eyes focused on your long-term destination. Predicting the outcomes for many investment classes is tricky, but this one is a no-brainer!