To the debt ceiling, and beyond!

Well, I'm getting that itch again, so, here goes.  I don't know how much of a prediction this is more than just a hypothetical extrapolation based on past events, but here goes.  

Think back to the fall of 2008.  Remember that "oh shit" feeling you had?  I think we're about to have another episode like that. 

In 2008, how much of that crisis was real vs manufactured?  I don't know, and I don't think it really matters.  There were and are very real and very serious structural issues in the way our societal/political/economic systems are set up, yet, I'm sure some of the 2008 crisis was manufactured, and that's what counts.  Never let a crisis go to waste, right?  Especially when you can create, or at least get positioned to steer a crisis to some pre-determined outcome. 

What came out of 2008?  In the heat of the moment decisions were made that successfully kicked the can down the road for about 3 years, til now.  The heat provided cover for some dubious at best decision making.  Now there is all this hub-bub about the debt ceiling, which is providing the right excuse for the right crisis at the right time.

I fully expect there to be some fireworks over the next couple of weeks, as well as the eventual "successful" handling of the crisis.  All the details are already known to the real players in this game.  Everything you see and hear on the evening news regarding the debt ceiling is nothing more than a high-brow reality TV show.  The only purpose these sound bites serve is to confuse and scare us.  

We've already seen Ben Bernanke saying one day that the Federal Reserve is open to more stimulus packages, and then the very next day saying they aren't prepared for that right now.  We've seen and heard lots of sound and fury coming from the politicians as well.  We hear about Moody's saying they might have to downgrade U.S. debt.  It's all a show.  

Now, assuming the goal is kicking the can again (and I do) and maintaining B.A.U. for awhile longer I can say

Moody's, or any ratings agency that matter to the U.S. will never downgrade the debt.

We will see weakness (or strength) based on the days debt shenanigan-talks, in the stock markets thanks to High Frequency Trading algorithms.  I generally expect weakness.  The rhetoric and play-acting coming out of DC will increase in intensity and direness in order to put a good dose of fear into the populace. 

Likewise, I expect to see a strong showing in the gold and silver markets based on the fear trade.

As the deadline approaches with no resolution in sight (or perhaps they will have a resolution, but the vote for it fails similarly to the first vote for TARP in 2008) I expect the stock markets to take a huge dump.  There has been a lot of testing of the HFT algos between the May 2010 flash crash and now, and I can see the NYSE stop trading for a time due to hitting a down circuit breaker.  If those algo's go a little nuts, it would be funny to see something like, DOW 100.  At least then people would see what a farce things have become.  But I don't expect that to happen for that same reason.  I also see gold and silver taking a beating due to margin calls, etc. at this point. 

Then we will see "marathon negotiations" and within 24 hours a "miraculous" agreement will be reached (one that is already decided on as of right now I'm quite sure).  At this point, the stock markets stabilize and get a small bump, but not recovering all that was lost.  Precious metals, which SHOULD now go up, will not. (Don't forget the goal is B.A.U. which means in part that the U.S. Dollar is king, and people who don't trust it - ie gold and silver bugs - are weirdos talking nonsense that should be shunned - the goal is to keep people in paper instruments that can be manipulated in a millisecond with a keystroke)

 Now with people sufficiently terrified, and markets stable but lower Bernanke has his cover for QE3, and gets to ride that bitch in like a white horse.  Of course there will be some delay to get here, but the stage is set again for the same shenanigan-cycle we've been thru since QE1. 

Whatever is in the legislation to pass this debt ceiling increase, rest assured, will be bad for you and me, and therefore will have an extremely pleasant sounding name.  Something like the "America's Fantastic Future Spending Bill"

The can will have been successfully kicked, again...for awhile.  I also fully expect the intervals between these crises to shorten.


Good luck out there, this ride is still just warming up. 

It's in

The bottom.  It's in, it's confirmed.  I guess that was an impossible call.  Silver up big, then down big.  Just to spite those Max Keiserites.  Why did it stop at 28.50?  Actually the why doesn't matter.  What matters is it did.  28.50 is the new normal.  Buy buy buy. 

The wheels are coming off.  They're wobbling off right the fuck now.  Why aren't you buying yet?

Once you pop, you can't stop

So, less than two months ago I got all excited about a $14 swing in gold.  How quaint.  Today gold punched through $1400, and silver has been on a tear, breaking $27 today.  After my last post I thought long and hard... could I recommend for anyone to actually sink their hard earned money into gold, or silver, at such high prices?  I came to conclude no, I could not.  The memory of the fall of 2008 was hot on my mind.  I remember the euphoria of silver at $20, and people saying it was just a pullback, that it was just consolidating, as it dropped all the way down to the $9's.  I thought (and still am not 100% convinced they don't) that the manipulators still had at least one more crushing blow in store for metals.  I was thinking that the third time would be the charm, that we would get one more massive price drop, and buying opportunity.  Well, as of today, I'm really starting to think there may be no third time.  This might be the new normal, the end of the manipulation, and the beginning of the end of fiat currency.  The USDX is up, along with Gold and Silver.  Extremely bullish (well, for metals at least).  Last week ZeroHedge had an article discussing strong resistance at $25.50 in silver.  That ceiling held for one day.  The next day it blew through $25...and $26.  Today $27.  $30 by the end of this week?  I don't know what to think anymore.  All of my prognostications turn out to be wrong, always, lol.  Am I right this time?  Is this IT, really??  I don't know.  What I do know is, I don't want to be looking at $60 silver and $3000 gold next year at this time saying coulda shoulda woulda.  And if the numbers are $10 and $1000, well, that's just a chance to lower your cost average then  :)  Good luck.

The value of these metals remains *fairly* stable, but their prices increase as the only trick that central banks can, will and do pull, is to run the printing presses to infinity and beyond.  I am convinced they will do this until it all falls apart, because it DOES buy time, vs. instant deflationary black hole otherwise.  But in the end the debt based currency system must crumble, and we are witnessing it.  Oh, and if anyone says Gold, or Silver is a bubble...  it's debt, it's fiat which is in the throes of it's last bubble, not metal.   Buy now, buy regularly, buy frequently until you can't anymore.  I am.  If nothing else it's a middle finger to our irrevocably broken and fraud filled paper financial system.  Take your ball and go home.

Hahaha

$14 spike in minutes, setting another new intraday record.  "She cannah take much more cap'n!  She's coming apart!"

Get some while it's still affordable.


EDIT:  Sorry I pulled the trigger a minute too soon; ANOTHER intraday record set lol!

A Thought on Debt and Petroleum

Interestingly enough, from many mainstream sources we are hearing a rallying cry for the US government to cut the deficit.  We are hearing "it's not fair, it is not right, to leave these debts to - to steal from - our grandchildren."  And it makes sense, what does give us the right to rack up these huge public debts and saddle future generations with their burden?   I suppose it arises from a sense of entitlement.  Plus, it's just the way things are done... the way things have always been done. 

Also interestingly, nobody (aside from a Saudi King, whom I believe was being disingenuous and just trying to cover his ass because SA has peaked while painting himself as enlightened and benevolent) is saying stop exploring for oil.  Yes, we are hearing calls to conserve, but we are not hearing calls for a full stop to save some of the precious juice for future generations.

So, most agree that it's not right to leave massive debt for future generations to worry about, yet essentially nobody says it's not right to burn up all the oil we want right this minute.  Why not?

I'm not being flippant here.  I imagine an average Joe reading the above sentence and getting a little bit ticked off at me, due to feelings of  "don't be stupid, it's common sense."  

But here's the rub: money and oil are both resources.  Money is a man-made resource, and oil is a natural resource.  Oil is finite, and money (at least in theory) can be infinite.  Yet here we are, worried about saving some money for future humans, but to hell with oil.  Sense; this makes none. 

Technology!  That is what I am forgetting!  Add some sweet, delicious technology into the above equation and suddenly everything comes up aces, right? 

This mantra of technology as savior has become an ingrained, unquestioned part of our culture.  Common sense says technology is awesome, and does so many great things, and any day now a fantastic breakthrough will occur rendering the need for petroleum moot.  That's why it's silly to save any for the future, they won't need it by then, duhh!

Following that train of thought, a similar thing will happen with our current concept of money.  There will be a technological advancement somewhere along the line rendering money itself, and the debt that it represents obsolete.  We will leave our money in the dust, just as we leave our dependence on oil in the dust.  

Well, if you find the above absurd, it's every bit as absurd to think that technology will find a replacement for oil.   As best as I can tell, technology causes more problems than it solves.  Our monetary system is in the process of laying bare all of its' inherent flaws and getting ready to implode, and our issues with oil have been laid bare in the Gulf of Mexico. 

Heh, I have run out of gas for this thought experiment.  I was just trying to poke some fun, and holes, into the logic behind some unquestioned pillars of our insane culture.  This is why we are doomed, and this is why you must put some effort into preparation.  Our culture is going to get really wacky when it really starts literally running out of gas.  That day is fast approaching.  Failure to prepare is preparing to fail.  Best of luck. 

Oh really

So, reports are coming in that the tarballs showing up in NE Florida aren't from Macondo.  To that I say:

Edited to ad:  there is a report out that two scientists on some board are saying Corexit is safe.



And all I hear is this:

Updated garden pics

They're starting to take off now!

It's true...carrots love tomatoes...

Now, here is something interesting... the tomatoes in the back (closest to the camera) are called "Red grape" that I got from Victory seeds.  It said on the packet "do not direct seed."  Well, I direct seeded them, about 4 weeks behind starting the others indoors...and now look, they're as big, if not bigger than the rest...hmmm....

Potatoes to the left, yard long beans to the right (c'mon and grow you dirty dawgs!)

Finally!  They're hereeeee....

The Pennsylvania Red Leaf tobacco is totally kicking ass...

The okra (Clemson Spineless) is doing great in the beds...but not so well in the smart pots...which is cute, because they advertise (of course) that they're better than raised beds.  To be clear, the okra in the pot closest to the camera was planted the same day as the stuff in the beds.  Good to know.

Now to be fair, it looks likes my pumpkins are coming along just fine...  and it's intersting to note that, from left to right we have some hybrid plant that is supposed to produce gigantic fruits, the one in the middle is supposed to be standard Jack O'lantern size, and the one on the right is a smaller variety, some sugar type pumpkin for cooking.