As The Markets Burn

Ring of Fire

When the market tanked in 2008 who knew we would be here again so soon and who the hell is shorting gold and silver?  In the past as bonds and stocks sank like a ship the flight to safe haven was the metals, gold was up $15 bucks today yeah right!  Shit has been going sideways since 9/11 and as the towers disappeared so did the middle class.  I mean not everyone invests in stocks and has a flowing portfolio, sure many have a 401K, IRA and\or Roth involved in mutual funds but that risk is higher now with many funds tied to oil and mining. Being long in the area of commodities is a bust right now and if you think of the derivatives market chained to insurance vehicles like AIG tied to those derivatives well it's like Royal Bank of Scotland said, "in a crowded hall the exit doors are small" and suggested their clients sell everything outside of high-quality bonds.  Ever since the Fed lowered interest rates to zero the average Joe can't even make money in a savings account, as to when you were excited to get your fist blue book and bring it into the bank for interest recorded, that worked and you felt good solid growth.  I mean even a CD rate is @ 1.25% on a 2-year deposit, wow bring out the candles.

Other experts like Bill Gross the billionaire investor and founder of PIMCO who now runs a fund at Janus Capital Group said "Wealth effect constructed with paper sometimes corrugated/strong, sometimes toilet/flimsy. Stay out of the bathroom."  Well, that sounds like the toilet can't even flush.  Then they're financial professors like Larry Summers who thought that the Fed should have remained neutral with the rate hick said, "It would be a mistake to dismiss the current financial squall as froth. Markets often sense a gathering storm when policy-makers are still asleep at the wheel."  He has long argued that the world economy is so far out of kilter that it takes permanent financial bubbles to keep growth going, an inherently unstable structure.  Thanks Larry, so on a brighter note you can play the downside of the market and certainly jump in when we reach bottom as long as the banks don't pull a bail in from civil accounts, that's the morning you wake up and most of your savings are gone before a run on the bank takes place.

All I can say is the banks and the Fed are playing this as they go along, might raise rates 1% per year or might go negative, at which point you would pay the bank to keep your money.  I think it's time for Public Banking and true growth in company stocks unlike the casino money printing market we've been riding and if you're not with the house it's a ring of fire.  As that photo above does represent the Pacific Rim. 

Time now for that 'Spin Doctor'        

World Market Indicators

Globe Backyard World Markets

 OK Davos was fun, wasn't it?  Yea, back to reality, we had heard over a week ago from Goldman Sachs that a correction is coming in the neighborhood of 10% now for the Dow that would be 1600 points and last week we've seen 500 points hit the dirt.  Looking at the markets tonight and China opened 500 points lower and Japan near 400 down.  Right now 01:24 CST China is at 22,006 down 445 and Japan is down 386 at 15,006.  The Fed mentioned again it will ease printing but it's all not real anyway.  London market will open next and it to will be down along with the Dow.  If the Dow ekes out a gain today you've got funky money any which way. 

Something to think about here and that is China is buying up tons of gold some analyst say near 10,000 tons.  Seems that China is going back to old school where their currency will be backed by gold.  Now here in the states, the Feds keep gold for other countries and the States alone have 8,133 tons but some time ago Germany's Bundesbank wants 50% of its total gold reserves back in Frankfurt including 300 tons from the Federal Reserve. The Fed stated it would take 7 years to complete the transfer.   Is it that the US government is no longer a trustworthy banker for foreign nations and Central Banks?  The Fed refused to submit to an audit of its holdings on Germany’s behalf, also the Fed refused an audit to the bailout of the financial fallout.  If you don't allow your books to be audited, well then your Betty Crocker, this could lead to a run on the Fed, now that would be a first. Why even have your gold held by The Fed? The gold held with the New York Fed can in a crisis be pledged with the Federal Reserve Bank as collateral against US dollar-denominated liquidity, the importance of the dollar as the world’s reserve currency.  Germany has popped the question maybe the $dollar$ not so important anymore.

This is a bad day for The Fed and central banks around the world as to where is the gold?  Back to China, now the whole world knows China owns 1.2 trillion in U.S. debt and understanding they have been selling the bonds. Also, Japan owns 1.1 trillion and Russia's 154 billion.  What else does China want?  Gold, seems that since The Fed is in the pocket of America and likes to use the U.S. military as a bully, is that who is getting all the gold, China?  Funny how money can make friends and then enemies.  No matter how you slice this The U.S. and The Fed are in a corner, print more money and buy gold?  No that would sink the dollar and raise the price of gold, slow the printing to its 18 brokers?  Yea but that's going to raise rates and slow the Dow because the average consumer is broke he or she is not investing.  Goldman Sachs said a correction is coming, yea as soon as The Fed slows the printing, bye, bye $George$ and where's the gold?  The United States government along with The Fed are creating an uncomfortable zone for itself, in the game of Monopoly.  For when you cheat, the other players will start to work against you to remove you from the game board.  US Debt Figures calculated in the US$ billions.

The markets are a fraud, pumping funny money into the system, because face it if you can't get audited who's to say where you're putting the money?  The Dow is a Zeppelin and what happen to the Hilgenberg.  Unless you can ride the bubbles before it pops or really when the plug is pulled, short-term market play will not make stable growth, too much uncertainty.  Long term makes for higher yields and dividends along with growth.  Watch hard assets a true indicator of inflation which is the commodities, gold, silver, grains, beef, oil and speaking of energy the price of propane is up because 300 million gallons of propane was used to dry crop harvests in the Midwest last year, far above the 65 million gallons used in 2012 and the cold snap hasn't help either, that damn torpedo of a tank (@ 1000 gal) is like a bank account when prices near $5 per gallon.

World Market Index

RT

 

Funky Money 

Funky Fed

The United States government and The Fed have gone funky, can you fell their grove? 

WABCRADIO77

 

Where's The Gold? 

In this episode of the Keiser Report, Max Keiser and Stacy Herbert discuss the print, taper, print, taper talk that has led to the economic and financial chaos that finds the Financial Times opining that one should do like the Bundesbank did and demand physical delivery of your gold before your wealth becomes pixellated. In the second half, Max interviews John Mauldin, author of CODE RED: How to Protect Your Savings From the Coming Crisis, about money printing, inflation/deflation, gold prices and wages. 

RT