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Lemmings, Investors and Gold – Part Two

Trader Rog
October 1, 2012

 

 

Investors (sometimes called lemmings) since time immemorial, have a distinct propensity to blindly follow the herd, propelled by corporate-banker-media public relations fiction.

 

This week, we continue with a list of Common Misconceptions in Today’s News that we started last week.

 

Common Misconceptions in Today’s News – PART TWO

Fund managers know better than you where your hard earned money should reside. They prefer that it be in their fund where you must park it for years. This way they can take their 1-2% annual fee plus an average 20% of the net. While we are certain they would like to earn nice gains for you, the reality is, many of these managers could care less as long as they get theirs. This game is a goner in our view. We are not totally against buy and hold but rather suggest that trading often (not day trading) has distinct advantages. Look over the following ideas and misconceptions we think are fraught with wild risk.

 

17.) It’s easier to open a new USA business now than ever before. Loans are available and sales are out there for the taking. Try to get a new business loan and you will quickly learn otherwise. Even large, stable companies cannot borrow as before because bankers would rather take the spread on government bonds, pay themselves big bonuses and keep the taxpayer cash in their till with no perceived loan risks. At the end, this all fails anyway and the fiat paper collapses, collapsing those banks; too bad for them. Have you noticed how many are leaving the banking business? One reporter said over 600 prominent bankers resigned just this year. What do they know that they aren’t telling us?

 

18.) Middle Eastern wars and social problems are over. Peace and prosperity are just ahead. War is big business and defense companies in the Western World need a steady stream of demand for their stuff to burn and get blown-up so they can make and sell more. The Middle East is on fire primarily due to religious differences, greed, blackmail, politics and the insanity of old men in funny clothes. War will spread, not diminish. The scary part is that nuclear devices are out there in never-never land, missing and not under any control. It’s only a matter of time.

 

19.) We are winning the hearts and minds of folks living in the Middle East. Policy, politics and religion within the Middle East are quite different than those of their neighbors and western world nations. Thousands of years of ideas instilled in minds throughout the region will not change, ever.

 

20.) The $16 Trillion in USA debt is manageable. We just need more time to work our way out of it. There is no possible way to extricate from this debt or most of the debts in other nations dumped on taxpayers and governments by central bankers to promote their schemes. In the USA, the Federal Reserve could write-off many billions in phony issued paper and cooperate to balance the USA national budget; but this never happens. It ends the hard way with crashing bond market values and collapsing economies. It either gets paid or it’s written-off. Written-off = the ending.

 

21.) Send your kid to college, and load ‘em up on student debt and there will be a great job out there right after graduation. Thousands of kids have shiny new degrees and no jobs. Yet, the trades are crying for help and have work for trained youngsters right now. The problem is we have too many college degrees and no demand for those skills. Yet, trade jobs demanding training go begging. Colleges and universities impose big bills on kids that take years to repay. It’s better to get a degree on the Internet for $7,500 (four years) and keep working and living at home while going through it. Some degrees obviously have mandatory campus residency but so many do not. New reports tell us one million freshly minted college grads from the class of 2008 have gone home to live with their parents, as they cannot find work.

 

22.) The new Obamacare Health Plan will work fine and it’s cheaper and better than old ideas. As one congress woman said, “We have to pass the law to see what’s in it.” Well it’s passed and many still cannot see what’s in it and these new rules have turned into a huge expensive mess…if in fact the law stays on the books. It’s our view that many just pay the fine and stay away from it.  Medicine will be ruined over years. It’s already a mess with needless and very expensive healthcare plans. We are not health care experts, but things worked fine before HMOs were introduced. We opt to pay cash and get a -38% discount. This shows us what HMOs really cost.

 

23.) Illegal immigration is under control and the social make-up of the NEW United States is being managed for a great and golden future. We’ve noticed certain immigration problems have been resolved as 1.4 reported million Mexican folks simply went back to Mexico as there was more available work there than in the USA. What does that tell us about our nation? Other nationalities are pouring into the USA and Canada having long-term and very serious implications. As the story goes, these billions in new welfare burdens will hammer the national economies creating other kinds of social problems due to no assimilation into American society.

 

24.) Just because there are 50 million on food stamps doesn’t mean those folks can’t get a job. The unemployed jobless rate in the USA is only 8% or so. That number can be managed. True unemployment in the USA is 25%. That includes those receiving welfare checks, those getting no checks and thrown off the rolls, and those vastly underemployed working only part time at minimum wage to eat and survive. Numerous former major industries like housing have been nearly, totally ruined. Good manufacturing jobs are mostly gone forever to foreign nations on pure economics. The very fabric of society has been permanently changed.

 

25.) All of those thousands of bureaucratic rules, red tape etc. won’t hurt current or new business. Small business in the USA is leading the way out of the recession. National, state and local governments have the ability to keep passing stupid rules. To justify their very existence they insist on new and ridiculous laws and rules creating such a burden with “politically correct stuff” that small business cannot grow, many are failing and new ones are not being started. This red tape load is just too much to carry and deal with for small business people.

 

26.) Big companies have loads of cash and will spend it on expansion and new jobs. Big companies have slimmed down, and are not hiring but rather finding ways to fire more employees and/or have one person do the job of three or four. They are saving cash to survive Greater Depression II with reduced sales demand and higher expenses. This is a no-growth negative environment that continues until the next world war.

 

27.) All government large and small is shrinking; it not expanding. Salaries, benefits and working conditions in governments greatly exceed private industry and business. Some are reducing employment rolls but only if they are forced to do so having no funds. Unions don’t care and continue to ask for more in a contentious environment. Eventually, some government bodies file bankruptcy and then do not have the ability to sell bonds to continue operations. Some political entities have merged with counties, or other towns and cities. It just keeps going until there is no way out.

 

28.) Defense industry spending is being curtailed. Our nation is at greater risk. Some kinds of very expensive defense products like certain missiles or airplanes are being mothballed. However, the defense industries shall continue forward making stuff for war. When the next war begins, expansion begins anew and more spending is the norm with dramatic waste throughout the process. War is the ultimate jobs program as civilians make war products and soldiers go fight.

 

29.) Free speech remains the norm. You can do or say anything you wish. This nation is free.  There is little peace and tranquility among many cultures as several are jealous of the others getting more free stuff.  This creates dissention, rivalry and violence. Politically correct speech has gotten ridiculously childish. It has gotten to the point where people either say what they think, argue and fight; or say nothing for fear of offending someone. Free speech is no longer our MO. Political correctness has trumped.

 

30.) Government leaders worldwide have things under total control and really know what they are doing. There are so many problems in the world created by economic imbalances that several new and serious problems have emerged.  If we had the time and inclination we could easily list 100 things that would set-off serious problems domestically and internationally. World leaders are figuratively going to “step in it” and then the real adventure begins. Who knows where or when?

 

31.) The president’s re-election is good for the United States and the world. These folks are very smart, work hard and will do the right thing for us and for the world at large. There are thousands of others reporting on the elections having information that we do not. We have seen so many defective and negative things regarding elections we’ll just refrain from comment on this one.

 

32.) Politics and voting are fair and balanced. There are rules and they will be followed very carefully. There is great fear of voter fraud and unfair elections in several nations and states. We noticed lawsuits on this in Nevada in the last election and expect it to spread. We suggest that all eligible voters get out and vote. If you don’t vote you can’t complain. Hope for the best.

 

These ideas are common in the news and on the street. If you believe this nonsense, you will believe anything. Wake up!

 

In closing, we will reiterate what works.

 

Stuff That Works

 

Understand your market and educate yourself to do a few things right. You do not need 50 stocks and 40 others to make money. Some of the best of the best do only one thing.  Look where you would be right now if you had piled into physical gold and silver in the year 2000.

 

While all eyes are on Europe’s destruction, the USA’s test comes November 6th. It might even arrive sooner if the broader stock markets slide out of control during September 23-25.

Meanwhile, we suggest you gravitate toward physical gold and silver and only the best-of-the-best of related stocks supporting that view.  In our work, we are busy looking for options and selling ideas for the broader stock markets heading toward the dustbin of destruction. Last week we recommended two new ones in Trader Tracks Newsletter. We see more coming in this new seasonal beginning.

The Greater Depression Repression II is swiftly taking hold now and layoffs will be legendary. Housing has an additional -20% drop from the current USA national average.  Joblessness goes to 30%-35% and food stamps reach over 50 million to 60 million. We will get a 2013-2014 World War in the Middle East and when Obama is reelected, inflation goes to hyperinflation. Not happy stuff but it’s not the end of the world either.

Somebody please tell us when the global bond markets crash for good and we’ll tell you when this can all get better and we can start all over again, maybe with a partially backed fiat gold currency.

 


Roger Wiegand is the writer and editor of Trader Tracks Newsletter for gold, silver and energy traders. Roger provides recommendations for short and long term traditional stock shares, futures and commodities trading with specifics for individual trades. Stay tuned for more of Traderrog’s insights and predictions via his exciting new daily audio subscription.  Coming soon! Details at www.wavelengthpublishing.com

Roger also is a regular contributor to The Korelin Economics Report (www.kereport.com) the highest rated Internet radio program listened to throughout the world. It specializes in politics and hard assets. He is also a regular guest on the Weekend Edition of The Korelin Economics Report, which airs on radio stations across the U.S. on Saturdays and Sundays.

 

Discussion
24 Comments
    Oct 01, 2012 01:02 PM

    Once again,,Another great piece from ROGER…..Here’s a good laugh. FED TO EASE UnTIL JOBLESS RATE FALLS BELOW 7%..Chicago fed president Charles Evans told cnbc ….For those who don,t know what that means…..Money printing till HELL FREEZE,S OVER……….These “IDIOTS ” claim unemployment, is only 8%…ha ha ha.

      Oct 01, 2012 01:21 PM

      For my Silver loving friend,s , here on the common sense channel…Two good piece,s over at , SILVERSEEK…..enjoy……….The mad irish fella.

      Oct 02, 2012 02:37 PM

      Well, Mr. Irish, by their definition it is. The real question: “Is their definition correct”?

      Big Al

    Oct 01, 2012 01:16 PM

    This news sent gold to $1793 early and it looked like it was going to breach $1800. However once again it gave it all back. Like $1625, $1800 is very very strong resistance. Gold has failed several times now to takeout this level, and it must! The news could not be any better for gold. It is tailor made for a big move but they are holding it down. We need a breakout above $1800 in the next days.

      Oct 01, 2012 01:24 PM

      JAMES……Patience….all good things come to those who wait…..THE GUINNESS AD.

    Oct 01, 2012 01:22 PM

    Another good one TR. I think we will get a gold standard thru gold backed bonds.
    I would like to understand what to expect from gold and the shares from a bond collapse. I dont understand the bond market and its relationship to gold.

      Oct 01, 2012 01:30 PM

      Benb…My understanding of the bond market is paper, based on a promise….My understanding of Gold is..(physical )…is you hold REAL MONEY IN YOUR HAND……….IF i,m wrong somebody correct me.

        Oct 01, 2012 01:41 PM

        Doesn’t get much simpler than that Irish….yes, I am a silver “friend” ……ARENT I?

          Oct 01, 2012 01:58 PM

          ROGER….YOU REALLY MUST WRITE A BOOK, YOU HAVE ALL THE MATERIAL, MY SUGGESTING FOR THE TITLE IS>>>>THE RISE & FALL OF THE AMERICAN EMPIRE IN THE 21 CENTURY>>>>>BY ROGER WEIGAND………..I will buy the first signed copy.

    Oct 01, 2012 01:06 PM

    Tony, obvoiously there is a dif between physical and paper, my question is,”when the bond market crashes, are gold stocks going down with them? is physical going down with them? will gold stocks rebound? will gold rebound? and all of it to what extent? better to short bonds than own gold stocks? need to be right out of the market? how about housing prices? thats what I am asking, so far I have not been able to get an answer from anyone other than “stewart” . It is possible nobady actually knows and everyone is scared to say “I DONT KNOW” (costly to a market guru maybe)The other thing that nobody seems to want to talk about is the Russia/China deal for oil in yuan. This is a HUGE step in dropping the american dollar as the reserve currency. What I do know is anyone useing american currency better own PM more so than other nations, remember the swiss franc lost 20% in 1 day, well just happened to Iran 20%. My point, (whatever the reason) it happens, own PM.

      Oct 01, 2012 01:28 PM

      HELLO BENB…I can not answer your question, i dont have any knowledge of the bond markets , i just believe if somebody has control of your money , be it in stocks or shares, which one normally has to go thru a third party to acquire then it,s not really your money till you get paid out when you sell, i am not educated enough to say yes gold will gold go down with bonds, or it wont…perhaps you should ask ROGER or RICHARD who have an understanding of these things…….But i think you will find nobody has the definitive answer……………..I will close by saying…I DONT KNOW.

        Oct 02, 2012 02:54 AM

        Tony, if you look at the past historical gold bull markets, the trend in nominal interest rates don’t appear to determine the long term trend in the gold markets. In the gold bull market of the 30s, the nominal interest rates trended down (just as in the current bull market) while in the 70s the nominal interest rates trended up. A more important relationship to the trend in gold are the real interest rates—when falling, they’re bullish and when rising are bearish—of course,currently we’re in a falling real interest rate market and will be in all likelihood for the next 2-3 years as promised by the federal reserve. Very low real interest rates are essentially equivalent to excessively loose monetary policy. Tony, also impacting the gold trend are the interest rate yield curves and credit spreads. I won’t get into these except to say the yield curves have been gold bullish and the credit spreads have essentially been gold bearish.

          Oct 02, 2012 02:47 AM

          Thank you for that RICHARD.

      Oct 02, 2012 02:51 PM

      Howdy benb,

      I still diversify myself. This is not investment advice.

      Big Al

    Oct 01, 2012 01:48 PM

    lol tony, well, me either but you are right about it not being your cash until you are paid. the 7th circut court judge confirmed that. We are gonna have to get used to living without a rule of law. or maybe we should think they are new rules.

    Oct 01, 2012 01:06 PM

    Benb….The only “REAL” rules, are the ones we make for ourself,s.

    Oct 01, 2012 01:08 PM

    Hi CFS, maybe a good thing to do would be to bring this report to the atention of the american people. Posted on 321 gold today. This is just part.

    Daily Paul – by kcop It’s a paper entitled “Preparing For A Post Israel Middle East”, an 82-page analysis that concludes that the American national interest is fundamentally at odds with that of Zionist Israel. The authors conclude that Israel is currently the greatest threat to US national interests because its nature and actions prevent normal US relations with Arab and Muslim countries and, to a growing degree, the wider international community.

    The study was commissioned by the US Intelligence Community comprising 16 American intelligence agencies with an annual budget in excess of $ 70 billion.

    Among the many findings are the following:

    1. Gross Israeli interference in the internal affairs of the United States through spying and illegal US arms transfers. This includes supporting more than 60 ‘front organizations’ and approximately 7,500 US officials who do Israel’s bidding and seek to dominate and intimidate the media and agencies of the US government which should no longer be condoned.

    Oct 01, 2012 01:08 PM

    visit http://www.wavelengthpublishing.com For our book and radio ideas. Thanks Irish tony for the idea. Wish I had the time to edit and package years of work and it would probably fit in 100 books. No time. Here is an idea: What if the Federal Reserve just returned the printed, stolen trillions of bonds back to the US Govt as a gift from the scheming bankers. This would sure put a dent in the national debt. No chance they are too greedy but their greed takes them down when they own all that crappy paper and its value goes to zero. The day of reckoning is coming. Some of my buddies think before year end- we think longer but who knows. WHEN CONFIDENCE IS LOST IN THE FIAT PAPER WHETHER ITS CURRENCIES OR BONDS ITS GAME OVER. WE NOTICED LAST WEEK THE BILLIONAIRES ARE DUMPING STOCK WITH BOTH HANDS EVEN INCLUDING “THE WARREN” BUFFET- GOLD SHOULD DO WELL BY XMAS – TRADERROG

      Oct 01, 2012 01:55 PM

      According to puppetworld press the owners of the Federal Reserve have $231 trillion dollars and own nearly all the world`s gold, they also own the London Gold Exchange(where in their handy work in suppression of the price of precious metals) and their family owns over half the wealth of the planet. Not bad, you wonder just who did win in American Revolution us or them.

    Oct 01, 2012 01:05 PM

    Hi Dennis, gotta thank Pres Wilson for that I think. I read somewhere that the Rothchilds owned half the world wealth in the 1800s, I read a # like 500 trillion in the 1900s. I wonder how many trillions until it just dont matter anymore.

    Oct 01, 2012 01:39 PM

    Benb, Have you read anything about “amero“ to replace the U.S. dollar ? http://endoftheamericandream.com/archives/new-obama-executive-order-pushes-us-closer-to-a-north-american-union-and-a-one-world-economic-system… and how we as Americans do see Clinton/Obama tag team effort to unite Canada-Mexico-United States under a new currency to replace our current dogged dollar under the so-called Free Trade Agreement(NAFTA). Or is this a hoax?

      Oct 02, 2012 02:57 PM

      Afternoon Dennis F,

      I discussed the “amero” a number of years ago and nothing, to the best of my knowledge, has ever happened.

      Big Al

    Oct 02, 2012 02:37 AM

    I dont know much but I heard about this, maybe 2 years ago. The idea was not well recieved in Canada. Why latch onto so much debt? Articles I read tho were saying that over time it would take more dollars for each amero. jan 1st. exchange 1-1 feb 1st 2-1 etc until people had no choice but to move to the amero so the idea was as soon as it happened change over. But I havnt heard anything since then.