Thursday, September 30, 2010

Spaniards Strike

"Spain's first general strike for eight years, a protest against the Socialist government's public spending cuts and easier hire-and-fire laws, had a limited impact beyond disrupting transport and some factories.  Spanish unions said 10 million people, or more than half the workforce, were on strike. The government gave no numbers."
Source: Reuters

Now that's what I call a strike. More than half the workforce. Wow!

"In a downward trending mass social mood, it's very likely that labor strikes will become very popular again. We might even see a professional sports strike in the next few years. An angry mob loves a strike and a picket line. The cycle will likely bring unions back to strength as fear and anger 'drives the herd closer together'."

Random Roving, November 24, 2009

Rekindling The Flames

Keep an eye on these old foes.
"Executives and traders in both countries have said that Chinese customs agents have blocked rare-earth exports since early last week, after a diplomatic dispute over Japan’s detention of a captain of a Chinese fishing trawler in waters claimed by both countries. Japan released the captain Friday."
Source: New York Times

"Rekindle,'s all the same thing. My prediction on this one was that when the tide lowers, it's easy to pick a fight with an old foe. It usually takes a small spark."
Random Roving, March 8, 2009

Wednesday, September 29, 2010

Dancing With The Sheeple

This blog can often serve as a confessional.  I must admit that my wife made me (yes) watch Dancing With The Stars with her.  As the kids say, "OMG".  Please bring on a root canal next time!  What will the anthropologists say in 100 years when they look back and examine our current culture??

The Next Golden Threshold

Gold has made another strong run and has quickly broken through the next psychological barrier, $1300 per ounce. $2000/ounce here we come!

"So, then why is the gold price rising to new heights? Answer: For 5,000 years, gold has been the most desirable “asset” which human beings have aspired to own. The rising gold price is reflecting a dawning understanding of the fact that the “game” has changed; and – because there are no signs of panic in the various markets – the most logical driver of a rising gold price is that investors are feeling more optimistic than pessimistic about the future of humanity. Arguably, we are about to find out “why” gold has – from time immemorial – been the most desirable asset."
Brian Bloom

Reducing The BOOT Print

The Boogeyman is everywhere and he's "comin' to get us".  There's Al Quaeda, the Axis of Evil, all Muslims, Taliban, Pakistanis, Osama, Iranians, and whoever else we need to get the herd to come together.  The fear factor is very powerful and effective.  Newt is starting to use it to emerge as the frontrunner for Team Red.  The idea below is contrary to the fearmongering and lowering the "boot print" would solve the problem.  But, of course we can't.  FOUR percent of the worlds population consuming 25% of the world's oil requires us to control "the heartland".

"The U.S. spends more on maintaining overseas government operations than all the rest of the world’s nations combined. While the cost of ending our involvement in perma-wars, turning off the lights at military installations, canceling aid and subsidies to foreign governments will cause widespread pain and misery – both at home for the dismissed soldiers and overseas for our allies – doing so is likely to improve our security by dramatically reducing our boot print on the face of the globe."
Source: Casey Research

Tuesday, September 28, 2010

The Cyclic Poem

"History is a cyclic poem written by time upon the memories of man."
Percy Bysshe Shelley

Monday, September 27, 2010

When In Rome, Do As.....

"Throughout history governments have experimented with fiat money. They have done so because the benefits to the government and the insiders that invariably latch on to power are just so damn attractive. The Romans did it by debasing their coinage, but the modern version goes one better by completely disconnecting a currency from any value whatsoever, and then wantonly printing as politically motivated needs or wants arise."
Casey Research

Sunday, September 26, 2010

Tricky Dick's Illusion

"The latest fiat system kicked off in earnest in 1944 when Uncle Scam, in Bretton Woods, NH, got the leaders of the world’s war-weary countries to agree to accept the U.S. dollar as their reserve currency. In return, the U.S. agreed that the currency notes it would subsequently issue would be convertible into a corresponding amount of gold. Then Tricky Nixon came along in 1971 and canceled the right of the bearer to swap the notes for gold. Overnight, the link between the currency and anything tangible was lost. That, of course, opened the door to all subsequent politicians to engage in the whole print, print, print thing. The keystone asset of the former system – gold – soon became a distant memory for the new crop of central bankers and, remarkably, to the bearers of the notes.  For any number of reasons, most of which related to the illusion of increasing prosperity, people simply stopped paying attention to what Uncle Scam was up to. Of course, that illusion was largely based on the increase in nominal wealth: if one year you’re worth $100,000 and three years later you are worth $150,000, the tendency is to feel richer even if your actual purchasing power has gone up by far less or even has declined due to a debasement of the currency. Today’s dollar is worth just 18 cents in 1971 terms."
Casey Research

Saturday, September 25, 2010


"IF" by Rudyard Kipling
If you can keep your head when all about you
Are losing theirs and blaming it on you;
If you can trust yourself when all men doubt you,
But make allowance for their doubting too;
If you can wait and not be tired by waiting,
Or, being lied about, don't deal in lies,
Or, being hated, don't give way to hating,
And yet don't look too good, nor talk too wise;
If you can dream - and not make dreams your master;
If you can think - and not make thoughts your aim;
If you can meet with triumph and disaster
And treat those two imposters just the same;
If you can bear to hear the truth you've spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to broken,
And stoop and build 'em up with wornout tools;
If you can make one heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breath a word about your loss;
If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the Will which says to them: "Hold on";
If you can talk with crowds and keep your virtue,
Or walk with kings - nor lose the common touch;
If neither foes nor loving friends can hurt you;
If all men count with you, but none too much;
If you can fill the unforgiving minute
With sixty seconds' worth of distance run -
Yours is the Earth and everything that's in it,
And - which is more - you'll be a Man my son!

Thursday, September 23, 2010

The Fall Guys

"President Obama's inner circle will likely be losing some key players. CBS News senior White House correspondent Bill Plante reports that sources say David Axelrod, the president's closest advisor, will move to Chicago next spring. Axelrod is expected to reassume his role as campaign manager in Mr. Obama's 2012 reelection bid. A potential, if not likely, replacement for Axelrod is current White House Press Secretary Robert Gibbs. The dominoes don't stop there. Rahm Emanuel, the president's Chief of Staff, may leave the White House as soon as next month."
Source: CBS News

"It was only a matter of time for the rats to start jumping off of the ship. It only makes sense for the budget director to leap first. Geitner and Rahm-bo will be next."

Random Roving, June 30, 2010

"The next four years will be very challenging on all fronts. As I've stated before, the economic cycle is must stronger than a political party or individual politicians. The psychology of the masses will drive the direction. I believe that the Democrats will be navigating the ship through major rogue waves. At the end of that process, the party will be in shambles. At that point, the masses will be disenchanted with both parties. At 'the bottom', there will be a third party that finally gains some steam and becomes a viable competitor. That party will probably be somewhere in the middle"
Random Roving, November 8, 2008

Darkness On The Edge Of Town

This coming November, Bruce Springsteen will release "The Promise: Darkness On The Edge Of Town".  It's six hours of film and more than two hours of audio across 3 CDs and 3 DVDs including a documentary on the making of the album "Darkness On The Edge Of Town".  As a 30 year Springsteen fan, I anxiously await its release.

Over the years, Robert Prechter of Elliott Wave International has made some great comparisons between mass social mood, financial markets, and the mood of music and movies.  He's presented exhaustive analysis on how music and movie themes align with the mass social mood of the people.  As I was reading articles about Springsteen's upcoming re-release of "The Darkness" record, I started to wonder how the timing of both releases would present itself in relation to the financial markets.

"Darkness was an angry record. I took the 10 toughest songs I had.I didn't want something with a broader, more compassionate overview. That didn't feel right to me."
Bruce Springsteen (Interview with Edward Norton at the Toronto International Film Festival, Sept. 2010)

The chart below presents the Dow Jones Industrial Average Gold Ratio with the two dates for the release of "Darkness On The Edge Of Town".  My hypothesis proves to be true.  Both releases align with a downward trending cycle.
Dow Jones Industrial Average Gold Ratio

They're still racing out at the Trestles,
But that blood it never burned in her veins,
Now I hear she's got a house up in Fairview,
And a style she's trying to maintain.
Well, if she wants to see me,
You can tell her that I'm easily found,
Tell her there's a spot out 'neath Abram's Bridge,
And tell her, there's a darkness on the edge of town.
Everybody's got a secret, Sonny,
Something that they just can't face,
Some folks spend their whole lives trying to keep it,
They carry it with them every step that they take.
Till some day they just cut it loose
Cut it loose or let it drag 'em down,
Where no one asks any questions,
or looks too long in your face,
In the darkness on the edge of town.
Some folks are born into a good life,
Other folks get it anyway, anyhow,
I lost my money and I lost my wife,
Them things don't seem to matter much to me now.
Tonight I'll be on that hill 'cause I can't stop,
I'll be on that hill with everything I got,
Lives on the line where dreams are found and lost,
I'll be there on time and I'll pay the cost,
For wanting things that can only be found
In the darkness on the edge of town.

P.S. Happy Birthday Bruce!

Wednesday, September 22, 2010

Lonely In The Desert

As I said in my January 1 post, "Things built on 'sand' will continue to struggle: California, Dubai, Arizona, Florida, and Las Vegas. Golf courses and cities are not naturally aligned with the habitat of a desert."

Nevada just grabbed the #1 spot in unemployment.  Time for a casino trip?

Viva Las Vegas
Bright light city gonna set my soul

Gonna set my soul on fire

Got a whole lot of money that's ready to burn,

So get those stakes up higher

There's a thousand pretty women waitin' out there

And they're all livin' devil may care

And I'm just the devil with love to spare

Viva Las Vegas, Viva Las Vegas

How I wish that there were more

Than the twenty-four hours in the day

'Cause even if there were forty more

I wouldn't sleep a minute away

Oh, there's black jack and poker and the roulette wheel

A fortune won and lost on ev'ry deal

All you need's a strong heart and a nerve of steel

Viva Las Vegas, Viva Las Vegas

Viva Las Vegas with you neon flashin'

And your one armbandits crashin'

All those hopes down the drain

Viva Las Vegas turnin' day into nighttime

Turnin' night into daytime

If you see it once

You'll never be the same again

I'm gonna keep on the run

I'm gonna have me some fun

If it costs me my very last dime

If I wind up broke up well

I'll always remember that I had a swingin' time

I'm gonna give it ev'rything I've got

Lady luck please let the dice stay hot

Let me shout a seven with ev'ry shot

Viva Las Vegas, Viva Las Vegas,

Viva, Viva Las Vegas

The Great Maestro On Gold.....Again

"Fiat money has no place to go but gold."
Alan Greenspan (this week at the Council On Foreign Relations meeting)

Desperate Conversions

"By the year 1100, the hunger for specie was so great that the cannons of Pistoia's St Zeno Cathedral melted down their great crucifix and used it for money. German princes sold their imperial seals. English nobles exchanged their silver sword mounts, and french bishops converted their golden chalices into cash."

David Hackett Fischer, "The Great Wave: Price Revolutions and the Rhythm of History"

Tuesday, September 21, 2010

The Closing Bell

I made post about the City of Bell back in July.  It looks like the mob strung up the noose today.

"The arrests of most of Bell's elected leaders Tuesday brought cheers and dancing in the streets in the small, working-class city, but added to the already deep uncertainty about its future.  With four of Bell's five City Council members facing corruption charges, the Los Angeles County Board of Supervisors voted to push for a court order to seize authority from them and turn day-to-day management over to an appointed receiver."
Source: Los Angeles Times

Another One Bites The Dust

It seems like yesterday when the last rat fled the ship.

"The departure of economic adviser Larry Summers opens the way for President Barack Obama to shake up leadership of his economic team and show he is taking seriously growing public frustration over the sluggish economic recovery."
Source: Reuters

Many more to come.

A Ten Year Look

It's no secret that I've been touting gold and "black gold" since 2002. I'm still amazed how many people feel that the contraction in their 401k's started in October 2008. Like the "boiling frog", it started very slowly and quietly in late 1999.

I've presented the DJIA-Gold Ratio numerous times that clearly illustrates a shift from equities to commodities in late 1999. 1999 you say??? Yes, I believe that this cycle rolled over in late 1999. The chart below presents these facts very clearly.

Chart Source:

Sunday, September 19, 2010

Saturday, September 18, 2010

Experimental Fiat Currency

"But all scams must, in time, come to an end. And that’s what’s going on now. It ends here. Before this is over, the current iteration of the U.S. dollar – the vaporous construct with no actual value – will lose its value as money. Most failed fiat money experiments involve a single currency. The most convenient recent example is provided by Mugabe’s Zimbabwe. Rather than actually supporting the creation of marketable goods and services in what he sees as his private fiefdom, he took the low road of energetically abusing his fiat currency to the vanishing point."
Casey Research

It's that Zimbabwe math all over again.

Friday, September 17, 2010

Battling The Bands Part 2

In my July 14 post, "Battling The Bands", I presented the DJIA annotated with two downward trending bands indicating a future downward trend in prices.  Below is an update.  We've slightly penetrated the upward band.  Are we breaking out or peaking and heading towards the bottom band?  I'm still thinking the latter. Here's an updated chart with conflicting bands.  One points up, the other down. We'll see. The run up to the elections will be full of excitement.
Dow Jones Industrial Average

The Great Pig Roast

This is one category that we would prefer to not be in the Top 5 of.  When is the next pig roast?

P: Portugal
I: Ireland
G: Greece
S: Spain

Thursday, September 16, 2010

Print Baby Print

"The Keynesians would take great umbrage at the idea that the government is left with no viable options at this point. The solution is clear to them – more stimulus. And this time around, no skimping! A paltry $800 billion isn’t even going to begin to get the job done. Rather, if two trillion dollars of freshly minted money is what it takes to kick the U.S. economy out of its swoon, then so be it. Hell, make it three if that’s what it takes – we can worry about the (inflationary) consequences later. Economists who look to someone other than Keynes for guidance, have other ideas – but not many. And, as per my comments above, none that would be even remotely palatable to the man on the street. That goes double for the politicians (of both parties), who rely on the proletariat to provide them with the votes that keep them in power and in porridge."
Source: Casey Research

Wednesday, September 15, 2010

Political Targets On The Outer Layer

Politicians are starting to be targets on the "outer layer of the onion".

"Mexican prosecutors say hooded gunmen have killed the mayor of a small town in northern Mexico. He is the third mayor to have been slain in the last month, apparently by Mexico's drug cartels."
Source: AP

Tuesday, September 14, 2010

Monday, September 13, 2010

A Historical Context

"I wanted to put our current predicament into historical context, and to demonstrate that the situation we find ourselves in is not novel. It differs quantitatively, but not qualitatively, from what has gone before - many times before in fact. Great cycles of expansion and contraction are part of the human condition, and there are patterns of boom and bust that continually repeat themselves, as they are throroughly grounded in human nature.  Collective human optimism and pessimism are extremely powerful drivers, acting over very long time scales. They are powerful enough to drive tremendous cycles of socioeconomic expansion and contraction. As population grows and optimism increases during a long expansion phase, pressure emerges that can only be relieved by increasing the elasticity of the money supply, often in spite of existing rules intended to prevent this very dynamic in the name of maintaining sound money."
Nicole Foss, The Automatic Earth

Sunday, September 12, 2010

Bubbling Blowing

"Based on all available evidence, it seems the American public wants to be misled. They have chosen ignorance over knowledge and understanding. They want to believe their corrupt leaders. They want to believe that things always work out in the long run. They want to believe that the economy is about to get better. They don’t want to think about unsustainable debt, unfunded liabilities, saving for retirement, or Simon Cowell leaving American Idol. Americans desperately want to be deluded into another bubble, but there are no evident bubbles left to blow. The existing American delusion is that the current fiscal path will not lead to the utter destruction of our once great Republic."
James Quinn,

Saturday, September 11, 2010

I Was Born In A Small Town

The Daily Show With Jon StewartMon - Thurs 11p / 10c
The Best F#@king News Team Ever - Small Town Values
Daily Show Full EpisodesPolitical HumorTea Party

"Small Town", John Mellencamp
Well I was born in a small town
And I live in a small town
Prob'ly die in a small town
Oh, those small communities

All my friends are so small town
My parents live in the same small town
My job is so small town
Provides little opportunity

Educated in a small town
Taught to fear Jesus in a small town
Used to daydream in that small town
Another born romantic that's me

But I've seen it all in a small town
Had myself a ball in a small town
Married an L.A. doll and brought her to this small town
Now she's small town just like me

No I cannot forget where it is that I come from
I cannot forget the people who love me
Yeah, I can be myself here in this small town
And people let me be just what I want to be

Got nothing against a big town
Still hayseed enough to say
Look who's in the big town
But my bed is in a small town
Oh, and that's good enough for me

Well I was born in a small town
And I can breathe in a small town
Gonna die in this small town
And that's prob'ly where they'll bury me

Friday, September 10, 2010

The Four Headed Debt Monster

I often get asked the question "why are you so pessimistic on the stock market?".  The graph below sums it up very well.  It's the across the board debt.  Debt at all levels.  It will take time to cleanse the system.  Time on the scale of 10-15 years.

Thursday, September 9, 2010

Predictions & The Future

“Predictions Are Difficult…Especially When They Are About The Future”
Niels Bohr

Wednesday, September 8, 2010

Tectonic Monetary Shift

"The most pressing macro-observation I’d like to make – an observation that’s critical for investors to understand (though most don’t or won’t) – is that the tectonic monetary shift now underway is truly global in nature. And it’s not going to be over until a new and markedly different monetary regime has been implemented."
Casey Research

Tuesday, September 7, 2010

The Return Of The Crusades

"Like the prophets of old, Terry Jones has a message -- and it's fiery. The controversial Florida preacher, who first lit a spark on Facebook when he called for people around the world to set fire to copies of the Koran, is now at the center of an international conflagration."
Source: ABC News

"The mob will get even more angry. Beware of the angry white American man carrying the Bible."
Random Roving, "Happy New Year! 2010 Is Here", January 1, 2010

The Top Five

It's always interesting to see what "strikes a chord" with others.  As of today, one of my posts in 2009 stands out way ahead of the pack with 831 page views.  It already has 31 today, so something appears to strike a chord with that one.  Maybe another look at "The Onion Peels In Argentina" is warranted. The web stats reveal that the viewers are U.S. based so the topic of interest probably wasn't Argentina, but the reminder of chaos in our country's past.

Monday, September 6, 2010

Casey's Case For A Gold Run - Part II

"That’s because when people lose faith in a currency, as they will before this crisis is over, they unfailingly rush to exchange the unbacked paper money for something more tangible. While pretty much anything with an intrinsic value will do – real estate, antique cars, old masters – for all the reasons that Aristotle enunciated, gold is viewed in a class of its own, and so has an unblemished history as a universally accepted store of value.* And, thanks to its portability, divisibility, durability, and consistency, it has also always been looked upon as a convenient form of money."
Casey Research

Sunday, September 5, 2010

First Edinburgh, Now Nigeria

In my October, 2009 post, "Witches In Edinburgh", I made the point that "witch hunts" occur much more often during the downward spiral in mass social mood. Currently we're hunting Muslims, Mexicans, politicians, hedge fund managers, and witches in Nigeria!

 Children abused, killed as witches in Nigeria
By Christian Purefoy, CNN
"Sam runs Child's Rights & Rehabilitation Network, or CRARN -- an orphanage that supports nearly 200 children. All of them were accused of witchcraft and cast out by their families, often after being tortured. The orphanage provides security, healthcare, nutrition and counseling.  'A child witch is said to be a witch when that child possessed with certain spiritual spells capable of making that child transform into cat, snake, vipers, insects, any other animal and that child is capable of wreaking havoc like killing of people, bringing diseases, misfortune into the family,' Sam said.  When a child is accused of being a witch -- that child is hated absolutely by everybody surrounding him so such children are sent out of the home... But unfortunately such children do not always live long. A lot of them, they're either killed, abandoned by the parents, tortured in the church or trafficked out of the city."

Fortunately for our energetic little boys, we only give them Ritalin!

Saturday, September 4, 2010

"Most Americans are Christian, and most don't have much direct exposure to Muslims. A quarter of Americans say they know 'nothing at all' about Islam, the Pew Research Center found earlier this month, and of non-Muslims polled, 58 percent said they don't know any Muslims.  It's natural for people who don't know Muslims to draw strong stereotypes from Sept. 11 and feel them reinforced by recent scares such as the Fort Hood, Texas, shootings and the Times Square bomb plot, said Leonie Huddy, the president of the International Society for Political Psychology and a political scientist at the State University of New York at Stony Brook.  'One of the things we know about cross-relationships of any kind is they become more positive as people have more personal contact with each other,' Huddy said.  A Gallup survey last year found that Americans who don't personally know any Muslims were twice as likely to acknowledge "a great deal" of anti-Muslim prejudice. Republicans and those without college educations tend to be less favorable toward Islam."

 "Xenophobia continues to rise at an alarming rate. I would hope that someone would do the research to show that out of the past 20 similar events, none of the gunslingers were Muslims. We might be shocked to find out that many of these murderers claimed Jesus Christ as their Savior."
Random Roving, "The Man Under The Hood", November 6, 2009

Friday, September 3, 2010

Bond Rush

"Based on my experience as a co-founder of a mutual fund group, I can tell you that if there is one sure thing in this world, it’s that when investors rush en masse into an investment category, it is invariably at almost exactly the wrong time to do so. Is that the case with today’s rush into bonds?"
Source: Casey Research

Thursday, September 2, 2010

Of vs On

"Move most of your money to safe, short-term cash parking places. Yes, I know — the yields stink. But in a sinking economy, the return OF your money is far more important than the return ON your money."
Martin Weiss, Weiss Research Inc.

The Golden Cup And Handle Update

Eight weeks ago I made a post regarding the "cup and handle" pattern forming in the Gold ETF (GLD).
Here's an updated chart which presents a textbook example of the pattern.  A nice run should be in the making.
Gold ETF (GLD) - Last 12 Months Price

Wednesday, September 1, 2010

The Delusional Benefactors

"Mass delusion is always encouraged by those who benefit most from the mass delusion. David Lereah has admitted that he lied about the housing bubble because he was employed by realtors. Realtors made millions in commissions. Appraisers made millions in fees by inflating appraisals. Mortgage brokers made millions by encouraging people to lie on mortgage applications. Wall Street whores made billions by creating toxic packages of mortgages and selling them to Irish nuns, old ladies and clueless municipal administrators. The ratings agencies made hundreds of millions in fees for slapping AAA ratings on toxic derivatives. Politicians got rich from political “contributions” from Fannie Mae, Freddie Mac, Wall Street, and the NAR. Any reasonable human being could look at the chart above and see that this would end badly, but Americans wanted to be deluded. They choose to believe. The housing market has now been falling for five years, with another five years to go. Ben Bernanke has reduced interest rates to zero. I wonder how that will work out."
James Quinn,

Wake Me Up When September Ends

September is here.  Buckle your seatbelts.  Wake me up when September ends.  I'll be a year older and hopefully a little wiser!

Summer has come and passed
The innocent can never last
wake me up when September ends
like my father's come to pass
seven years has gone so fast
wake me up when September ends
here comes the rain again
falling from the stars
drenched in my pain again
becoming who we are
as my memory rests
but never forgets what I lost
wake me up when September ends
summer has come and passed
the innocent can never last
wake me up when September ends
ring out the bells again
like we did when spring began
wake me up when September ends
here comes the rain again
falling from the stars
drenched in my pain again
becoming who we are
as my memory rests
but never forgets what I lost
wake me up when September ends
Summer has come and passed
The innocent can never last
wake me up when September ends
like my father's come to pass
twenty years has gone so fast
wake me up when September ends
wake me up when September ends
wake me up when September ends

Green Day, "Wake Me Up When September Ends"