Handicapping the GOP Field....

Pawlenty - If I didn't see an R after his name every time he is on TV - I would swear he was a democrat. He has a government solution to everything & yet he is going to balance the budget. Sure. Arguably the least qualified of the candidates. No match for Obama - because most of the people who Pawlenty (and his government solutions) appeals to - will vote Democratic.  8-1

Romney - Morning line favorite. The obvious choice of the establishment. As republicans go, he says all the right things. Good credentials. Problem I have with him is every time I look at him I see the prototypical politician. Quick, name 5 adjectives that best describe your average career politician. My list  would read duplicitous, smarmy, verbose, condescending, and dubious. This guy has them all - in Spades. He may well get the nomination, but little chance against Obama.   8-5

Cain - Dynamic speaker - hands down the best Orator of this group. Pragmatic & Charismatic. There is nothing about this guy that says politician. His Candor is refreshing. Like Paul, he is genuine. As such,  Another outsider with little chance to get the nomination - yet would probably carry 40 states against Obama. 6-1

Gingrich - I would pay a lot of dollars to watch him debate Obama - what a fish & goose soiree that would be. He makes no pretense at politeness or bipartisanship - to me this makes him believable & persuasive. Genius IQ - though seemingly without the scruples to manage it. Probably too polarizing to beat Obama - which is why if he gets any traction early - the MSM may help him get the nomination.    4-1

Huntsman - Why anyone even takes this guy seriously is beyond me. I really think he gets run in the media because they would love to see him get the nomination. He would have little chance against his former boss, the Big O. 30-1

Bachman - No doubt in my mind, she has the biggest pair of testicles in the field. Principled and seemingly uncorrupted thus far by Washington.  Inexperienced  - but to the tea party this is a plus. Unlike Palin though, she does not connect with ordinary people.  Another outsider with little chance of getting the nomination - but would do well in the general election. She has gotten as far as she has, because her enemies under-estimate her - that only gets you so far. 4-1

Paul - The only candidate from either party whose platform (if implemented) would actually improve the country.  The most philosophically consistent and thus the most genuine candidate. He is also the wisest of the field - by miles. . He would beat Obama easily in a General election - but has no chance to get the nomination - because he is intent  on dismantling the system. In essence, he skewers too many sacred cows. 99-1

Palin - This is the candidate the liberal establishment fears the most as she would easily beat Obama in the general election. While the press would have you believe her "negatives" are too high for her to be electable - don't be fooled. They are high because she can win - and the other side knows it - hence the fear. She is much more savvy than people give her credit for. She connects with ordinary people in a manner most politicians would cut off their own finger to be able to do. Lets not forget, Most males would vote for her just for 4 years worth of visions of breaking their genitalia off in - well you get the idea.  That appeal - makes her electable - period. 5-2

My personal choice would be Paul. But I am a realist - So I would be happy with  Cain, Palin, or Bachman. Gingrich would be the most entertaining by far. The rest are also rans. 

Empires Come, Empires Go

 

  When they crash, they crash hard. There can be little doubt - USA qualifies as an empire. The real question is - has it peaked - or are its best days ahead? The signs - if you care to look at them are everywhere. In fact, if you were Roman - you might say the "barbarians are at the gate".  Lets check the signs…..  

 Government promised bread and circus for the masses - check. As empire grows - so does the size & scope of Gman. We are at a point now where those working in the private sector  are outnumbered by those receiving a check from Gman. This is simply not sustainable as you cannot expect this problem to get better when the majority can just vote themselves a check.  In order to fund their profligate ways as well as excersise dominion over its people, Empires in decay have always turned to

 High taxes - check.

      Sales tax, property tax, estate tax, fica tax, excise tax, import tax, state tax, city tax, income tax, cap gains tax, unemployment tax, medicare tax, corporate tax, county tax, yada yada yada....Truth of the matter is all the taxes in the world would not provide enough money to meet Empire's needs. Our leaders know this. They use the tax code as a means to control behavior of the masses - not raise revenue.  If they wanted to raise more revenue, they would just:

Devalue the unit of currency - check.

   In the old days of Empire, the rulers would just clip metal off the edges of existing coins, melt the clippings down & mint more coins. No need to go thru that hassle any more, now we just print more paper. This has the effect of "devaluing" every existing unit of currency. This is why a cup of coffee that cost a nickel in 1930, cost two dollars today. Our finances are so bad in this country, our leaders are forced to print extra units of currency at an ever accelerating rate. This behavior will eventually lead to a collapse in the value of the dollar which will begin with a:

Rising Gold price - check.

This is the proverbial canary in the coal mine. A rising gold price indicates more and more people have become worried about the purchasing power of the dollar, so they have begun putting that money into Gold - as Gold has always (unlike ALL paper currencies) retained its purchasing power. In essence, Gold competes with the Gmans beloved dollar as a store of value. We all know how much the Gman - or any monopoly  really - hates competition.  Which brings us back to the canary. If Gman CANNOT stop the rising gold price, and you know they are trying, then the exit from dollars - and the imminent collapse of their value, has begun. Empire will not go down without a fight though, that is why Empire always has an:  

 Oversized military - check.  

    Most of the spoils of empire are obtained by, or maintained with the threat of military force.  Of course its no coincidence good ole USA has the worlds largest military, by an order of magnitude.  Do you really think  countries around the world would willingly give us their goods and labor in exchange for our printed paper if we didn't have the military we do?  Yeah, sure..... History, if you care to learn from it,  shows the way to defeat a bigger military is by spreading them out  with

Costly Peripheral wars - check.

    Maintaing a military large enough to keep your subjects in line and further Empire's imperialist ways is very pricey.  Consider the USA has more bases in more countries than they have states in the union. As for wars you have Afghanistan, Iraq, Libya - and those are just the ones they tell us about.  You are kidding yourself if you think if you think those are the only three. Our leaders are con artists who are experts at telling voters what they want to hear, which usually has nothing to do with the actual truth. In short we have a:

Corrupt political system - check

    The two party system is just for show. Truth is R or D makes no difference.  Both sides want more Government no matter the issue. Both sides spend more than we take in. Both sides are in bed with the suits on wall street. Both sides exhibit imperialist ways. Both sides are far more interested in re-election than the needs of the country. They are all (as MC would say) part of the same hypocrisy.  The system itself is broken. Instead of being lead by our best & brightest people - we are lead by our best and brightest con artists. It's not just the politicians either, our entire nation is in complete:

Moral decay - check.

   Have you listened to your kids music lately?  Have you seen the divorce rate?  Or the teen pregnancy rate?  Or the school dropout rate? Or the prison population? These are all just symptoms of a far bigger problem. The end of empire is near. Those within the Empire are doing everything possible (including unscrupulous behavior) to retain the last remnants of such. Can't blame them really - its just human nature - oh, and the end of empire.    

I am running for president - appreciate your vote....

My platform:

1. End the war on Drugs immedaitely by legalizing them. They would be taxed & regulated - just like alcohol. This would save this country 100's of billions per year.

2.  Food stamp recipients would be required to perform community service to recieve their stamps. Call me old-fashioned, but working for what you get is the way it should be. Just a guess, but this requirement would cut the food stamp rolls by ninety percent, saving this country more billions.

3.  Criminals would no longer be sentenced in years, but rather in Megawatts. They would be required to walk on a treadmill daily generating electricity to be given back to the community they wronged. This is in stark contrast to the system we have now where criminals are provided 3 squares & cable tv.

4. Abolish the Fed. There can be no debate, this country was a much better place to live for regular folk when there was no Fed. From 1770-1910 we had falling prices, rising wages, stable money. Courtesy of the fed we now have money that is losing value almost daily, falling wages & rising prices. I like the first way better.

5. Abolish the Income tax. And the IRS for that matter. Yes federal revenues would plummet - but until anybody can tell me anything at all Government does better than the private sector - they don't deserve money.

6. No more congressional elections. Congressmen would be selected lottery style. I am confident the first 535 names drawn would do a better job than our current representatives.

7.  No more public schools. The idea of bussing kids to some big building to learn is outdated. In the age of the internet, it is much more cost effective to turn teaching over to the private sector where buildings, busses, and grossly overpaid tenored professors aren't needed.

8.  No more minimum Wage. This would solve the unemployment problem immediately as wages would move more in line with wages paid in other countries. Employers & employees could negotiate there own deals without some third party (Gman) imposing restrictions.

9. Gambling, Prostitution, and on-line poker will all be legalized. Why should the Indians get all the money? Better yet, with no victims - why are these even crimes?

10.  The US Dollar would be backed by Gold. History shows - its the only way.

11.  Gman will pay anybody that wants it 10 grand to get a vasectomy (or tubes tied). Most of the people who would take advantage of this  Government program should not be reproducing anyway. The 10k is the proverbial ounce of prevention required to offset the pound of cure their offspring will demand. Trust me, the 10k is cheap.

12. Military spending would have a zero cut off. (We are only talking 1990 levels here) Even a ninety percent reduction in military spending would still leave our military as the worlds largest. This would save our nation Trillions.

13.  We will build One supermax disney-like Prison zoo to house our most infamous criminals. OJ, Manson, Madoff,  Unabomber, etc - all under one roof. We would sell tickets to tour the zoo & observe criminals in their natural habitat. As a nation of criminals, this would go over big!

14. Foriegn aid to all nations will be eliminated. Saves billions - Its a No-brainer.

15. We will bring back corporal punishment to violent criminals. Public whippings, beheadings, crucifictions, or being fed to starved animals are all viable options. Of course the action will be broadcast for all to see. This will deter crime.

16. All those who wish to vote in presidential elections will have to pass a minimum IQ test. Think not? Look what no test has gotten us.

17. No more nation building. We kick a country's ass in War - we get all their possessions. What is the point in kicking Iraq's ass if not to take their oil?

18.   Personally I prefer the shakespeare method of just killing all the lawyers. But I am a realist, so I would move us to a Legal system where the "loser" pays.  In fact, while we are at it, only the winning attorney would get paid. This will unclog our courts & our law schools.

19.  US citizenship would be for sale to the highest bidders from around the world. This would bring the best & brightest from other countries here, unlike now where we are getting flooded with their rejects.

20.  All unions would immediately be disbanded. The 20th century has proven beyond all doubt what a dubious idea Unions are.


More later.....

Tis but a flesh wound

  So silver is off 35% in 4 weeks, Remember this is war - I've seen  Worse.  Anybody cares to look at a chart of silver the last decade - you will notice multiple 60% off sales. Its the nature of the beast. Having lived thru multiple 60% corrections the last decade, I could do this one standing on my head.

  It would appear the Evil Empire is going to defend the $50/oz level in Silver. Bully for them. Nothing has changed from a fundamental perspective. It is not a question of how much higher silver is going, but rather how many zero's will it add over the next decade?

When should we sell our Gold & silver?

I am forever being asked when I plan on selling out my metals position. Seems everytime they pull back in price - the non-believers are out in force claiming the bubble has popped. This was written by me in 2008 when the world was crashing down - remember? It is just as applicable today as it was then. Those  of you who know me personally, know I have told anyone willing to listen for the last decade to buy Precious metals.  Here are some of the reasons why......


Subject: Golden Bull alive and well!!!
Date: Thu, 15 May 2008 01:06:24 -0700

    Several of you recieving this email have personally expressed disgust, frustration, and/or downright fear to me in the last 3 weeks over the health of the 21st century Golden Bull. The contrarian in me says that is a good thing. A scant 2 years ago $860 gold was percieved as outrageously high. Yet, here we are at $860 today and most of the people I know in this market are ready to throw in the towel. I feel your pain. What follows are the 10 reasons I look upon times like this, as an opportunity to buy Precious Metals(PM) on the cheap.

1.  There is still no interest in the PM market from the general public. At the end of bull
markets everyone and their brother is either in, or wants in. Take housing for example.
My plumber has 4 homes, my dentist  3. Even Vegas cabbies are getting in the act -
last xmas I listened all the way to the airport about the cab drivers "rental Properties".
It is a sure sign of a market top when  people  with no connection to an industry,
(housing in this case) like dentists, plumbers, and cabbies - just to name a few -  are
clamoring to get in - and doing it with leverage.  Take my word for it, we are
nowhere near that day in PM's.  

2.   There is no fever - like Gold fever.  We live in a bubble world. Tech bubble,
housing bubble, bond bubble are all going to look like childs play next to the
upcoming gold bubble. No worries, you will be able to spot the gold bubble yourself.
Cab drivers will be pimping the merits of bullion. Barborshops will have the
 "gold channel" on every time you visit. People like Oprah, will be hosting
prime-time specials about PM's, in fact she will probably give some gold  bars away
to her rabid fans. Atleast 2 miners (my guess is newmont & Barrick) will be added
to the Dow Jones Index. Almost all gold and silver mines on the  planet not located
in strong "rule of law" countries will be nationalized. 90% of high school graduates
will know what a kruggerand is (that number today might be 10%).

3.   The great game!! The rich have been doing it to the poor since the dawn of time.
Stock markets, bond markets, commodity markets, etc are the playgrounds of three
distinct groups. The rich, the well connected, and the wise. The rest of us, as they
say, are just guessing.  I am going to let you in on a secret - The rich, well
connected wiseguy doesn't want you to know. These markets, and the sheep that
trade in them, are best sheared in  a "generational manner". The people who run
these markets know this. The people who run these markets aregreedy bastards,
just like you and me. So guess what, Big moves in these markets tend to last

a generation. This bull market in PM's is only 6 years old - still plenty of time to
get aboard this generational Golden Bull!!

4.   Bull markets die with a wimper - not with a bang!! Anyone who thinks the
commodity bubble has been popped and the PM's are crashing back to earth,
is sorely mistaken. Bull market tops roll-over and die slowly down a "slope of
hope". Think of what the buyers in tech stocks have experienced the last 8
years. Tech stocks have largely slid down that very slope for 8 straight
years. Good news is they probably only have another 12 years or so down the slope
of hope to meet the generational requirement of a completed bear market. Sometime
around then,tech stocks will be a buy! In the meantime the Gold bull rages on! Gold
has basically shed 20% off its high in only 6 weeks.That is a nice "buck" by this bull
- but its not shaking me out. I've seen worse, several times.  A friend of mine
(former floor trader) once told me "it is the Bulls job to shake out non-believers".
Even in the 1970's gold bull, they wacked gold in half over a 2 year period. That
tested the very soul of every gold bull around in the 70's. Those that passed the
test, and bought after gold was cut in half were rewarded with an 8 fold runup in
less than 3 years. Somewhere in here, gold will find a bottom. Maybe $600, maybe
$700, or maybe it has already found it. Judging by the pessimism in the market at
present - I think we are close to that bottom.

5.   The microscopic size of the PM markets ensures that when even a modest amount
of capital starts to flow their way, The price will go parabolic. The most important
word in that sentence is "microscopic". When the day arrives and the public wants in
there will be, as my dear departed dad would say "2 kinds of people in the world,
son". There will be those that have gold (and can name their price) and those who
don't (and will pay dearly to get it).  Which one are you?

6.   The Dollar - what a joke. Listen People. Americans take a great many things for
granted. Chief among them would be the stability of their currency, aka the
"dollar". To most, its continued supremacy & stability is expected along with the
arrival of daylight each morning. It is an embarassment to our educational system
 that not 1 person in 100 in this country comprehends what an anachronism
 the idea of a stable, universally accepted paper "FIAT" currency is in the history
of the planet. Here is some wisdom for you: some ideas sound so good in theory,
that they can fail 100 consecutive times in practice and people are still willing to
try it. At the same time there are ideas that may sound bad, but work every time
they are tried - yet many people still refuse to try it. FIAT currencies and
socialism are examples of the former, excercise is an example of the latter.

 

7.   Warren Buffet, Bill gates, Robert Kiyosaki among others have all picked up
large silver positions in the last decade. There is a reason these are some of the
richest men on the planet. They get it. 28 years ago some oil boys (the Hunt's)
tried to corner the silver market. At the time, the U.S. alone had a 3 billion
Ounce stockpile - which along with some timely rule changes regarding
margin requirements was used to defeat the Hunts. Nowadays, there are no

government stockpiles to draw down on. In fact, as of last year the US mint is 

buying silver of the open market just so they can issue silver eagle coins. The 

problem is, as a planet we use roughly 300 mil Ounces more silver than we

mine every year. This has been going on for decades. Now that the stockpiles 

are gone, price has begun moving up to rebalance supply and demand. Problem

is most of the demand for silver is inelastic - and thus not responsive to price. 

One more thing those rich well-connected wiseguys know that John Q public 

doesn't, is this: Above ground, silver is rarer than gold. Most of the rest of the 

public is going to learn that fact over the next decade as Silver adds a couple 

zeros to its price.

 

8.  Countries around the world, one by one are delinking their currencies from
the Dollar. More and More Oil producing nations are demanding to be paid
in something other than "dollars". Although you will never hear it from the
mouth of our leaders this is why we invaded Iraq. Saddam said no more dollars
for oil - game was on. It is no coincidence that you are hearing what an evil

empire Iran is now. They too are threatening no more dollars for oil. Let's see
what happens if they cross that Rubicon. This is putting tremendous
downward pressure on the purchasing power of our beloved dollar. This is
already happening - why do you think Gas costs triple what it did 3 years
ago? You see "dollars" are nothing more than governmental iou's. China is
sitting on a trillion of the damn things.That's right - we owe them trillions. In
any typical debtor/lender relationship (believe me , i know about those) there
can come a point where the lender won't take anymore Iou's. We are there now.
Instead the lender starts buying anything he can get of value with those Iou's.
On a national scale, a country like china might trade those Iou's for our wheat,
grain, or our PMs! You think there is inflation now, wait til china starts bidding
up commodities with those trillions. Those days are coming.

9.  The great game is played best in a generational manner. That's true, in the
short term however there are tactical tricks those in the know use repeatedly.
The trick is simple, Market makers do everything in their power to get the
retail investors leaning one way - and then they take the market the other
way - shearing the retail sheeople in the process. If you are looking for it,

you see it played over and over an over ad nauseum. Do you know anyone
who wasn't getting long tech stocks 8 years ago? Or real estate 2 years ago?
I don't. It is no coincidence that with everyone piling on the long side of
the trade that they are now taking those markets the other way. Thats how the
game works. 20 years ago when I got into the gold business - we used to buy
gold from refiners and sell it to the public. Yep, back in the eighties it was cash

going up from the public to us and on to the refiners, while PMs went downhill.
Then about 1990 with gold and silver at record lows, business changed.
We became net buyers. In fact we have been net buyers ever since.
The public has been selling relentlessly for 18 years. Nowadays, Metal is flowing
up from the public into stronger hands while fiat cash is rolling downhill.
The exact opposite of 20 years ago!!  If there is one thing I have learned in
my decades of investment experience its this: The public is always on the wrong
side of the trade. That by itself should be enough to convince even the most
hardened skeptic that this bull has a long way to go.

10. Last, but certainly not least is the manner in which Bull markets progress.
This is the real beauty. Price accelerates at an increasingly faster rate as bulls
mature. Look at the stock bull from 1980's. The dow jones was at 800 in 1979.
It doubled roughly 4 times in the next 20 years. Notice the first double took
8 years, the second double only 6 years, third double only 4, and the last
double in less than 3 years. Pretty textbook stuff. Turning to gold we see the first

double (from $260 to $520) of its bull took 5 years, the 2nd double (from $500
to $1000) was less than 3 years.  With Gold at $860 today and the next
double due in about 2 years - sounds a lot like opportunity today.

   As for the Haircut given to the PM's and the mining shares over the last 2 months, I am not happy about it - but I have seen it before in Both July 06 and Aug 07. They were both tremendous buying opportunities. Perhaps we are near another one now. Like my dad used to say "there are 2 kinds of people in the world, son". He was right. There are those who are long PM's and those who aren't. Put another way, there are those who believe and those who don't. Put me in the former
camp.