Thoughts on the markets from our expert guests

February 2, 2013

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In this show Al discusses:

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    Feb 02, 2013 02:31 AM

    23% real unemployment and as bad as the US was post depression.
    If it gets worse and worse they will have to break out the drones.

      Feb 02, 2013 02:05 AM

      I appreciated the multiple references to the multiple comparisons between the metals and the DOW 14000 milestone. Jeff was spot on when he said “14000 what…the number is meaningless!” Jay Taylor referenced the DOW to Gold ratio.
      Last night I was having dinner at my favorite Italian restaurant in Huron, Ohio. I was traveling and having dinner at the bar. A client saw me as he waited for a table. During a short cordial exchange he boasted about the DOW 14000 news slapping me on the shoulder. After this exchange I took my electronic leash out of my suit coat pocket and literally wrote down a few figures on a bar napkin. They are highlighted below:
      The DOW closed over 1400 for the first time on July 17, 2007.
      Gold closed July 17, 2007 at $666.
      So in in 5 and ½ years the DOW has NOMINALLY returned to where it once was.
      Gold closed yesterday at 1667.60. $1001.60 (1667.60 -666- a lot of 6s) higher than the first time the DOW closed above 14000. In the same time it took the DOW to do a round trip with 14000 GOLD has doubled 1.5 times.
      And then there is silver which closed at $12.90 on July 17, 2007.
      Silver Closed yesterday at $31.84. $18.94 higher than the first time the DOW closed above 14000. In the same time it took the DOW to do a round trip with 14000 Silver has doubled 1.5 times.
      Also during the time it took to DOW to do its long round trip. The metals never approached to the approximate 50% haircut the DOW reached in March of 09. Unlike the DOW the metals during this period afforded the investor an opportunity for taking even greater profits.
      The client and his wife joined me at the bar after their meal. We spent the next hour discussing the difference between nominal valuations and value.

        Feb 02, 2013 02:20 AM

        DENNIS……I would bet ,,,,you never changed the mind of your friend…..,,,ootb

          Feb 02, 2013 02:57 AM

          Actually at this stage he is on board.
          He went from zero exposure to PM/resources to about 15%.
          Our debate now focuses on allocation.
          He laughs every time I say monetary mayhem.
          His wife is a proud NEA public school teache. She thinks I am a conspiracy theory nut and I drove cab in NY with Mel Gibson:

          She will not be converted.

            Feb 02, 2013 02:57 AM

            This couple sounds kind of like Kathy and I although she is not nearly that narrow minded, thank God!

            Big Al

            Feb 02, 2013 02:19 AM

            Does Kathy think I am a cab driver?

        Feb 02, 2013 02:56 AM

        Many thanks Dennis M!

        People need to be reminded of that once in a while.

        I gotta tell you man, it is great to be a part of an intelligent family!

        Big Al

        Feb 02, 2013 02:23 AM

        Dennis, in other words, the Dow fell by well over 50% in terms of real money. That is how the layperson should see it. Good luck convincing anyone that their paper isn’t money.

        Feb 02, 2013 02:03 PM

        EXCELLENT WORK….Esquire!

          Feb 02, 2013 02:24 PM

          I definitely second that Marc!

          Big Al

        Feb 02, 2013 02:33 PM

        Nice work Mr. D. I had a similar exchange on value and taxes with a few friends at a wedding recently. Inject a little common sense logic and the next thing you know they’re freedom lovin’, precious metals buyers… If they are open-minded.

          Feb 02, 2013 02:25 PM

          What I personally find interesting, Brad H is that some of the folks who I know refuse to be even close to open minded!

          Big Al

      Feb 02, 2013 02:52 AM

      All I can say, Matt, is that I am truly concerned.

      As I said in yesterday’s Daily Editorial and other places, when the average personal realizes where we really are. LOOK OUT!

      Big Al

      Jan 31, 2014 31:44 PM

      Have you ever considered crinetag an ebook or guest authoring on other websites? I have a blog centered on the same topics you discuss and would really like to have you share some stories/information. I know my audience would value your work. If you’re even remotely interested, feel free to shoot me an email.

    Feb 02, 2013 02:22 AM

    defined by the government………MORON, ..more on reporting on nonsense……

      Feb 02, 2013 02:01 AM

      Morning The Tall,

      It is nonsense, but stop and think about it. what would the attitude in the street be if everyone was as sophisticated as our “family” and realized what was going on?

      One of two things would happen.

      First of all, everyone would buckle down and make things better.

      Secondly, we would have social unrest times 100.

      I would hope that the latter would not be the case, but I really have my doubts.

      We have a very complicated situation with absolutely no easy way out, in my opinion.

      Big Al

    Feb 02, 2013 02:37 AM

    Wall street,the banksters,the govt(gangsters)… like an ingrown toenail,,,,it never stops hurting you , until you get the clippers out, and extract the problem…..,the gangters need to be removed……

      Feb 02, 2013 02:03 AM

      I prefer, The Tall, to say that we need a more realistic group of “leaders”.

      Big Al

    Feb 02, 2013 02:57 AM

    It seems Jon Nadler was discharged from his duties @ Kitco, when someone loses their job it’s not a good thing but we are all responsible for our actions in life, and accountability must come into play if our society is to function properly. DT

      Feb 02, 2013 02:05 AM

      what seems to be the problem with old Jon? why the dismissal..?

      Feb 02, 2013 02:44 AM

      Kitco claims a reshuffling.Bix Weir says Jon was fired.

        Feb 02, 2013 02:52 AM

        Oops…and somewhere in between lies the truth.I would like to hear Bill Murphys take…if he really cares…

          Feb 02, 2013 02:25 PM

          thanks….Greg……ditto on Bill M take……

            Feb 02, 2013 02:28 PM

            I would have to think that my friend Murph really doesn’t care!

            I’ll ask him when I see him in Southern California in a couple of weeks.

            Big Al

    Feb 02, 2013 02:03 AM

    seg. 7…..great interview with Louis…….DR. COPPER….great term……..

      Feb 02, 2013 02:04 AM

      Long story short The Tall, Louis is brilliant! No ifs; ands; or, buts!

      Big Al

    Feb 02, 2013 02:23 AM

    seg.8…….LAZY FAIR……great seg……book club….might need to join….., if we join do we get a FREE stay at the ranch…..OOTB

      Feb 02, 2013 02:09 AM

      We are booked, The Tall, until 2020. Do you want me to put you on the waiting list?

      If you do, I need the usual non-refundable deposit sent to Mr. Irish.

      Big Al

        Feb 02, 2013 02:30 PM

        IRISH….said he is not taking anymore checks……..I would send gold, but, he does not like american backed gold….something about tungston….you will have to ask him…
        btw….I will not need reservation until 2020,,,but, IT does have to be Free….

          Feb 02, 2013 02:39 PM

          HI The Tall,

          It is definitely free, but the reservation (due only to administrative costs) has a slight fee associated with it.

          If Mr. Irish does not want to accept and take responsibility for this, please handle it with Marc, Doc or anyone of the other members of our family.

          Best to you,

          Big Al

          P.S. If you would like to go through Kathy or I we would be happy to accommodate you but the fee is a bit higher to accommodate the royal family. (Not Kathy and I but those close to Mr. Irish)

          Let us know!

            Feb 02, 2013 02:09 PM

            thanks Al…..I have a “fee-ver” to ask….., that you accept american traveler check, with then NAME,,,,SHORTY CASH, Willy PAYLATER, thanking you inadvance ….ootb

          Jan 31, 2014 31:49 PM

          Hello! I know this is somewhat off topic but I was wediornng which blog platform are you using for this site? I’m getting fed up of WordPress because I’ve had issues with hackers and I’m looking at alternatives for another platform. I would be awesome if you could point me in the direction of a good platform.

    […] Listen to the show HERE! […]

    Feb 02, 2013 02:15 AM

    What will happen when the dollar collapses and the government can’t fund the social programs, the people who get these entitlements will still want and some will need (seniors)these programs.

    The fighting will begin first inside the government between the various factions and when they can’t deliver there will be anarchy in the streets.

    With lawlessness the army will be deployed and a curfew imposed and people will look to the government even more to solve their problems. This will start us down the road to totalitarianism and possible dictatorship. Finally they will acknowledge the “D” word, DEPRESSION. DT

      Feb 02, 2013 02:57 AM

      Your last line “Finally they will acknowledge the “D” word, DEPRESSION.”

      What you described prior to that suggests we will have multiple depressions aka a mass graves.

    Feb 02, 2013 02:12 AM

    No just one depression lasting maybe 10 years but the government will become more powerful and centralized and at some point we could easily fall into a dictatorship and possible War as a means to divert our eyes from the problems that we will face. DT

      Feb 02, 2013 02:12 AM

      Interesting dialog Machine Gun and Dennis M!

      Man, I gotta tell you hope that a miracle occurs!

      In the meantime, I am trying my darn-est to protect myself, my family and my friends!

      You are all certainly helping me to do that and we are all helping each other.


      Big Al

    Feb 02, 2013 02:29 AM

    Update from expected returns:
    The significant trends of the future are starting to appear in plain sight. The Dow just had its best January in 19 years, which follows yesterday’s negative GDP print. This doesn’t make much sense to the lay person, but it reflects the new trend of stagflation.

    As capital starts to shift in a way we haven’t seen in decades, it’s important to revisit the first rule of investing: Don’t lose money. A lot of people think that stocks are overbought right now, which is true, but at the end of the day, stock are in a bull market. As a general rule, you should not short a bull market. The whole point of investing is to take minimal and defined risks with the possibility of disproportionate returns. Shorting a bull market turns that entire strategy on its head; instead you have a defined upside and unlimited downside. This doesn’t make a whole lot of sense unless you are a short-term trader with pre-defined stops.

    I personally don’t think you need leverage to do well in investing- there are always investments that offer asymmetric upside potential. But no matter what you invest in, you need an exit plan. This is what will keep you from exhibiting the behavior of “the herd.” What are the signals that it’s time to leave the trade? What kind of volatility are you looking for? How long will you hold a trade before revisiting your idea? And you need to have the discipline to lighten up if those negative signals come. In my opinion, the behavioral aspect of investing is more important than anything else. If you have proper loss controls, you will make money incidentally.

    There are a lot of investments that have embedded optionality in them. One such investment is real estate. Your down payment is the price of the option, and if real estate rises, you make leveraged returns; if real estate falls, you lose whatever you put in. Again, this is the concept of defined losses and “unlimited” upside. We’ve just gone through the biggest real estate collapse in most of our lifetimes, so real estate might appear risky to people, but there is a reason most of the very wealthy people in the world did it through real estate. It is because of this optionality.

    I would rather be long than short, in part because bull markets last longer and are less volatile. As it pertains to gold, I know a lot of people are getting nervous, which is natural. But this is when your plan comes into play. I’ve said before that I need to see a blow-off top to even consider selling. I also need to see governments take care of their long-term debt position. The Fed also needs to stop holding interest rates low and buying securities directly. This is the plan, and nothing has changed to make me consider selling gold.

    As the great Paul Tudor Jones said, the lasts third of a great bull market is typically a blow-off, parabolic stage. This is what lies in the future, and I can assure you it will be incredibly hard to sell when you see your investment rise 10% -20% in a day. But you absolutely must sell as the parabolic rise occurs- otherwise you will refuse to sell when the pendulum swings in the opposite direction. Again, don’t lose money.
    Disclaimer: 1. This newsletter is for informational purposes only. I am not a registered investment advisor and I am not responsible for any actions taken by subscribers.

      Feb 02, 2013 02:20 AM

      Good Morning Paul L,

      Words of wisdom.

      It is people like you who make this a great site.

      Best to you,

      Big All

    Feb 02, 2013 02:38 AM

    Hi Dennis M,

    Your question about Kathy made me stop and think.

    She is an interesting lady in that she can’t really be put into a compartment.

    She will typically vote democratic because she firmly believes that a certain segment of the population need help from the government. And, I have to say that there is definitely some truth in that.

    She does; however, get very angry at people who are capable of helping themselves and refuse to do that.

    She also gets very angry at stupid regulations.

    Here is an example of what we think are really stupid regulations:

    Okay we have an authoritative body who enforces certain rules that keep people from hurting themselves. These rules include helmets for cycle riders; wearing seat belts in cars; jaywalking; etc.

    The dichotomy here is that these rules assume that people can’t think rationally for themselves. Then we have these other rules which are set in place, usually instigated by the irrational do gooders, that say people have to take care of them selves. These people who are mandated to take care of themselves include some who are institutionalized because they are truly not capable of taking care of themselves.

    Her brother is one of the latter. There was a fairly strong movement in our state to close the “school” where he lives and mainstream the residents. People, by the way, who literally are unable to tie their own shoes.

    Now, I know that one could argue that those people should be taken care of by their families. I have to say that sometimes that is simply not possible.

    Okay, here is another great example of what pisses her off.

    We had some friends whose daughter developed a mental illness at the age of 28. Our friends begged the “authorities” to help them to get their daughter into a place where she could be helped.

    Unfortunately, the “authorities” were too busy handing out goodies to people who were capable of taking care of themselves; enforcing the helmet laws; etc.

    What happened? Our friend’s 28 year old daughter starved herself to death.

    My wife damn near threw a rock threw an office window of the “authorities”.

    I could go on and on, Dennis M but I think you get the idea.

    Let me tell you, if the three of us were sitting at that bar in the Italian restaurant you mentioned we would have a great conversation where none of us would get pissed off at each other unlike some friends who I have that I will no longer discuss certain issues with.

    It is all about common sense isn’t it?

    Big Al

    Feb 02, 2013 02:18 AM

    John Williams talks about hyperinflation by the end of 2014 and this year a drop in the dollar. If you look at the dollar chart on a technical basis, its’ position looks very precarious right now and appears to want to move lower from its’ recent range.

      Feb 02, 2013 02:42 AM

      Doc, 2013 will be a very interesting year for all of us.

      Big Al

        Feb 02, 2013 02:33 PM

        I think the number 13….is LUCKY, but, I do not believe in Luck…prepare, and meet opportunity…..

          Feb 02, 2013 02:41 PM

          Interestingly enough The Tall, 13 has always been my lucky number!

          Big Al

    Feb 02, 2013 02:40 AM

    Auugh. I see I can no longer download these webcasts to listen in my car. Bummer.

      Feb 02, 2013 02:43 AM

      Not sure why you can’t Lore.

      I will see if Sarah or Carter can’t help you.

      Don’t go away!

      Big All

        Feb 02, 2013 02:53 AM

        Fixed – sorry about the mistake!

          Feb 02, 2013 02:21 PM

          Thank you! Appreciate your team taking time out of your weekend.

    Feb 02, 2013 02:26 AM

    This Week’s Monetary Mayhem Movie of the WEEK

    Empire of Silver……a little escapism which illustrates that China is sending the message to the masses to buy Silver. If you are fluent mandarin you do not need to read the subtitles. Streams on Netflix.. All in all a good flick!

      Feb 02, 2013 02:42 PM

      I think that is going to prove to be a very wise message, Dennis M!

      Big Al

    Feb 02, 2013 02:55 AM

    Economic growth in the US which is reported and observed by many, has similarities to pre-hyperinflation Germany during the early days of Weimar fiat money expansion. Just after WWI Germany experienced severity of money shortage as a result of reparation payments. German government went through a series of tax increases, increased social spending and of course money printing. During the early part of these years the German economy was actually perceived to be growing faster than the US which was suffering a depression between 1920-1921. Much of the German economic growth during these very early years just after WWI was the expansion of printed money which finally began to gather speed.

    The US is in similar period to Germany during these early years of the 1920’s, as last ditch effort by the Fed and major corporate powers that run the US to initiate a “accelerated inflation”. Bernanke and his associates know full well the risks associated with attempting to create a so called “controlled hyperinflation”, so in concert they have instructed the executive, congress and the judiciary to implement social and monetary control in order to maintain central authority. Will this work? History suggests not, as it never really has before, the attempted efforts resulting in eventual rapid economic and social decline caused by misallocation and loss of equal justice. The US as we know it is coming to an end.

      Feb 02, 2013 02:44 PM

      What an interesting comment, Clay. Thank you!

      Big Al

    Feb 02, 2013 02:32 PM

    All it will take is one derivatives laden bank to go belly up and there goes the bloated balance book of the US of A.
    That event can happen in a heart beat.
    In fact,it appears it was constructed with that sole purpose in mind.
    Instant hyperinflation is one BIG 4 failure away.

    Feb 02, 2013 02:11 PM

    RE: Segment 3.

    Jeffs comment about consumers becoming debt free toward the end of S3.

    Jeff, American consumers can’t rip the band-aid off. Here’s why:

    You may recall that when the Rs had complete control of the fed. government a few short years ago they rewrote the bankruptcy laws making it near impossible for private citizens to liquidate their debts, but instead forced to restructure their debt—and thus suffer as indentured servants and economic surfs in perpetuity. Look the default rate of unsecured college student loans, for example. This fast rewrite of personal bankruptcy laws tells me that they saw crashes coming. They knew what they were doing; they knew the outcome.

      Feb 02, 2013 02:23 PM

      BJ- I agree about the changes to bankruptcy laws. But whether consumers shed debt through bankruptcy or not, a huge amount of US mortgage, credit card,and student loan debt will be nonperforming for many years to come. It’s time for banks/creditors to stop ignoring reality and adjust their fantasy balance sheets accordingly.

        Feb 02, 2013 02:17 PM

        Totally agree. Need to get back to honest (GAAP) accounting. That includes: mark to market and no shadow inventories. If we did that in the first place, and set up another RTC to liquidate all that bad real estate, it’d be behind us. Painful, but behind us. Now, $Trillions later and with negative interest rates, or at best at zero, it’s still before us, and it’s going to hurt a whole lot more because the Fed can’t play with interests rates to absorb the shock. It can only print money–which throws grandma (yet again) under the bus by destroying her life savings. But as they say on Wall Street, What the hell, it’s only grandma

          Feb 02, 2013 02:43 PM

          In March 09 contemporaneous with the over all market bottom was the abandonment of mark to market accounting requirements.
          It was as if the bank regulator said “this is not looking good so therefore we suspend reality.”
          It was not a coincidence this was when the market turned.
          It is as if we have invite cognitive dissonance to be our modern economic guide.
          This is why I feel a “suspension of the debt non-ceiling” could last potentially just as long as the temporary closure of the gold window.

            Feb 02, 2013 02:09 PM

            “Mark to fantasy,” as they say.

            Feb 02, 2013 02:36 PM

            “Beam me up Scotty!!!!!!!!!!!!!! I am surrounded by economic terrorists!”

          Feb 02, 2013 02:45 PM

          Unfortunately BJ, today my Kathy is “grandma”!

          What have we become?

          Big Al

      Feb 02, 2013 02:36 PM

      You made me think…which my wife says is hard to do.
      Do you remember way back when Congressman were “Public Servants”?
      Like so many things in government the name reflects exactly the opposite of their function. The bankruptcy provisions where included because of the post-Revolutionary Hyper-inflation of the Continental. So many otherwise responsible citizens were devastated by the monetary mayhem. It is odd how express provisions are maneuvered to effect the exact opposite of the framers intent, other provisions are ignored, Obama told the UN the 2ND amendment had to be endured….all whilst other concocted protections are summoned as if justices are using a Ouija board.
      So we now have a dreamed up right to an abortion based on privacy while at the same time a data base is being constructed to document our waist measurement and alcohol intake. Apparently some life activities are more private than others. I guess on this farm you want to be head pig.
      Off to cook the family Lemon Caper Chicken

        Feb 02, 2013 02:00 PM

        Yes I know, we just can’t win. Remember Obama saying in his first campaign that he would eliminate departments/agencies that weren’t productive. Meanwhile, ever since Jimmy Carter (D) created the US Dept of Education, education standards went off the “intelligence cliff” (there, I finally invented term)! Then came Bush, with both houses of government stacked in his favor–and what did he do? Did he eliminate this failed DEpt that ran US public education into the bottom quadrant of the industrialized world? Hell no! Instead he stood on the podium with dearly departed Sen. Kennedy (D), and at that station traded big hugs and invented “No Child Left Behind”. OMG, to hell with the Party platform, and thus another bastard government program was born out of political wedlock! Now back to Obama, and his promise to eliminate failed departments–and here we go again!

          Feb 02, 2013 02:26 PM

          You made me think of Ronald Reagan’s classic…….”The nearest thing to eternal life is a government program.” (could be a paraphrase but it is close)… I must take the spaghetti squash out of the oven and marry 1/2 of said gourd with the caper-lemon-butter-wine-sauce).

            Feb 02, 2013 02:50 PM

            Know what Dennis M? I think (change that to I know) I going to go and open a great bottle of meritage!

            A man’s gotta do what a man’s gotta do!

            Enjoy the chicken!

            Big Al

            Feb 02, 2013 02:08 PM

            If you and your guest all enjoy the ingredients separately….then it is just a matter of making them look pretty on the plate.
            The chicken turned out nice……I never heard from Castanhiero (close) after he cooked my manicotti recipe, I hope he is OK!
            A great wine makes up for average food and average conversation.
            A martini makes up for boxed wine.

        Feb 02, 2013 02:11 PM

        Dennis- do I remember when Congressmen were public servants?


        (Couldn’t resist, it was a softball….)

          Feb 02, 2013 02:41 PM

          I do remember when a Congressman who was rightly referred to as a public servant… unfortunately he retired last month.
          (Couldn’t resist, it was a softball….)
          It is the plural/singular distinction that makes us both right.

          Feb 02, 2013 02:51 PM

          Okay Mr D, now I know that I may be older but you are easily as bright as I am.

          43 on the front earlier, but then the 39 degrees got to me!

          Big Al

            Feb 02, 2013 02:11 PM

            When you play in the desert hit it where it is irrigated.

        Feb 02, 2013 02:48 PM

        Yeah, Dennis M, and I am off to put a couple of “quarters” on the grill.

        What the hell, as Bob Dylan said, “The Times They Are A-Changing”!

        Big Al

    Feb 02, 2013 02:11 PM

    More and more analysts who are bullish on gold are now capitulating and starting to fall into the camp that says the 2011 price of gold was the high for this cycle. It seems everyone is now resigned to waiting for the future inflation that is expected to come that will once again ignite this bull market. It would not surprise me though if the powers that be, the fed, the banksters, figure out a way to have all this qe end up in a black hole that lines their pockets but never enters into the velocity of money – in which case, presto…infinite money printing without inflation…goldilocks economy.

      Feb 02, 2013 02:54 PM

      There is A MAJOR PROBLEM with that comment. The US DOLLAR is rapidly being by-passed by A LOT of currency swaps and gold-back bonds (now coming into play) by the BRICS and others like Norway, Sweden, etc., even Peter Schiff says that someday Canada might bail and ‘marry” China into economic agreements of a direct realignment with their respective currencies and economic hard assets. Implausible? I think not. In this environment, everything and anything is possible. Change is happening real fast. I for one want the only shield against global/geopolitical dilly-dances – gold and silver. As the dollar gets threatened these hard assets WILL BE the only place to be. Velocity of money be danged. IMHO.

        Feb 02, 2013 02:56 PM

        gold-back bonds – i.e. -( letters of credit backed by gold) SOURCE: The golden Jackass – Jim Willie.

        Feb 02, 2013 02:59 PM

        Okay, Marc, either in the Desert or in San Diego the wine is on Kathy and I!

        Big Al

          Feb 02, 2013 02:06 PM

          Sounds great………

        Feb 02, 2013 02:15 PM

        And that is how Canada is host to a potential US war against China played out on NA soil.
        Think that was not planned out long ago?

        Pact would allow U.S. troops into Canada during emergency
        Last Updated: Tuesday, December 10, 2002 | 8:56 AM ET
        CBC News
        U.S. troops could find themselves on Canadian territory helping police and firefighters deal with emergencies under a new pact signed by the two countries.The new accord says that soldiers from either country could cross the border, but would then be under the command of the host country.
        Defence Minister John McCallum said the pact recognizes that threats such as those posed by terrorists or biological agents don’t recognize international borders, and continues a long tradition of Canada-U.S. co-operation on dealing with common threats.
        The agreement creates a new binational planning group that will draw up plans for deploying military and civilian forces in the event of emergency, including terrorist attacks and natural disasters.
        U.S. to create North American command zone
        Last Updated Wed, 17 Apr 2002 20:33:2
        WASHINGTON – U.S. Secretary of Defense Donald Rumsfeld revealed plans Wednesday to establish the Northern Command, a new military zone stretching across North America, including Canada, the U.S., Mexico and the Caribbean.
        U.S. to create North American command zone
        Last Updated Wed, 17 Apr 2002 20:33:25
        WASHINGTON – U.S. Secretary of Defense Donald Rumsfeld revealed plans Wednesday to establish the Northern Command, a new military zone stretching across North America, including Canada, the U.S., Mexico and the Caribbean.
        Canada, U.S. militaries sign cross-border pact -David Pugliese Canwest, February 23, 2008
        Canada and the U.S. have signed an agreement that paves the way for the militaries from either nation to send troops across each other’s borders during an emergency, but some are questioning why the Harper government has kept silent on the deal.
        Neither the Canadian government nor the Canadian Forces announced the new agreement, which was signed Feb. 14 in Texas

          Feb 03, 2013 03:29 AM

          Tha.nks Matt!

          Big Al

        Feb 03, 2013 03:13 AM

        marc: Yesterday I wrote something similar to James (the lesser) saying much the same as you did. But I thought no, because what James said has considerable truth to it influenced mostly by disgust and who could not be disgusted with the so called authorities in penitential power over the US.

        Over 90% of the so called money experts who write and talk on the various MSM or blog channels understand inflation as velocity of money, but there is another type which is cost push inflation that often leads to hyperinflation. Cost push inflation results when the fiat paper money has less and less desirability to be saved and it can happen even during a severe depression when very few people have any money. Keynesian money people generally do not accept cost push inflation as a possible reality because to admit it means their entire economic understanding is a fraud and Ponzi scheme. But the people know that something is terribly wrong even if they don’t know what to do about it.

          Feb 03, 2013 03:47 AM

          Yes, Clay…exactly…Jim Sinclair has been very, very adamant about how it will be ‘cost-push inflation’ that is the main culprit. Yep, agreed!

            Feb 03, 2013 03:32 AM

            Great point gentlemen!

            Big Al

            Feb 03, 2013 03:40 PM

            I think you can safely bet it won’t be “demand pull.”

      Feb 02, 2013 02:58 PM

      Interesting point, The Greater, about the analysts.

      Do you ever think that this may mean a bottom for now and an upward reversal?

      Big Al

    Feb 02, 2013 02:02 PM

    Great show Al,
    Good to hear from a variety of opinons.
    Everytime I listen to Danielle Park, I want to liquidate my assets and wait for the “black swan” event that will cause the markets to plunge.
    Then we will have buying opportunities galore.
    The hard part is I have invesments in mostly PM stocks and some other commodities (Am Manganese) that have gone to hell!

    What is the site’s recommendation…………… stay the course with the metals
    Sell and wait for what inevitably will come………… a bursting bubble.

      Feb 02, 2013 02:24 PM

      Hmm. Why not cost avg down here on the good ones IMO Allen. Take your AMY for example… Wow, what an obliterated stock… I had a couple buy orders triggered around 2.5 cents. Lucky, maybe, but the upside multiples are potentially huge (without having to use leverage) if the stock even goes to 40 or 80 cents again. If it pops, maybe mitigate your loss by lightening up on the way up. After listening to the interview with Larry, buying more at 4 cents seems like a good “bet” as long as you are comfortable with more eggs in that basket. Ps. Only my opinion.

        Feb 02, 2013 02:02 PM

        Larry has announced a privae placement at $0.05 and I may take a piece of it. If I do, I will let you know early this week.

        Big Al

      Feb 02, 2013 02:01 PM

      I can only tell you what I am personally doing Allen.

      I sold some minor positions last week as I announced, but for now I am doing nothing. (And that includes AMY)

      As I make any changes I will let you know,

      Big Al

      Feb 03, 2013 03:36 AM

      @ Allen: “Everytime I listen to Danielle Park, I want to liquidate my assets and wait for the “black swan” event that will cause the markets to plunge.”

      I know what you mean; after watching her presentation which was posted here last weekend, I’ve been selling misc stocks that I wasn’t particularly fond of, and have started a small position in a bear etf – essentially shorting the market.

      Reinforcement to my attitude comes by way of Cory Venable’s tweets (@CoryLVenable). Here is a recent chart from him via Twitter:

      I maximize my total PM exposure at 25%, adding if the allocation falls below 20%; selling if more than 25% – which I haven’t had to do for quite some time.

      Am also 15% in cash and have to admit that I’m tempted to convert all PM stocks and cash into cold, hard metal.

        Feb 03, 2013 03:43 AM

        You have to do what allows you to sleep at night!

        Big Al

    Feb 02, 2013 02:41 PM

    Allen, thats the question all right.
    Maybe the way is be wealthy enough to own all the pm stocks we want and have lots of cash ready to buy after a crash.
    Or, be wealthy enough not to have to even think about making more.
    In any case, getting it right might be worth a shekel or two.

      Feb 02, 2013 02:02 PM

      Or three benb, or three!

      Big Al

    Feb 02, 2013 02:12 PM

    Thanks for your insights.
    I appreciate this site and the participants.

      Feb 02, 2013 02:28 PM

      As far as investing a non-decision is a decision.
      Doing nothing is doing something.
      What I do ,,,,It works for me…is up front risk tolerance determination.
      Play with ‘the house’s money” but never play with your house money.
      It never hurts to take a step back…..look at a camp fire….fly a kite on a beach….or command an Adirondack chair looking at the stars…the best decisions flow to you as opposed to being presented to you on glossy paper.

        Feb 02, 2013 02:54 PM

        Interesting, Dennis. You have the EXACT advice that Jim Sinclair has been giving. The best thing you can do now….is…..exactly…..nothing. (Assuming you have non-margin/leveraged positions in gold) Interesting. “Doing nothing is (indeed) doing something”.

          Feb 03, 2013 03:49 AM

          I second Marc’s comment Dennis M!

          Big Al

      Feb 03, 2013 03:47 AM

      As do I, Allen!

      Big Al

    Feb 02, 2013 02:29 PM

    Striving for popularity is a passive activity.

    Feb 03, 2013 03:21 AM

    Interesting to hear Jeff Christian on Kitco dissing everyone who doesn’t share his view. So according to him listening to this show and anyone else is a complete waste of time.

    All hail Jeff


      Feb 03, 2013 03:51 AM

      Don’t bite your tongue Tony W!

      I do not agree with Jeff on some issues, but I do like the guy!

      Big Al

        Feb 04, 2013 04:14 AM

        Al I think he is too smug and is the antithesis of all the people that are too hard the other way.


          Feb 04, 2013 04:23 AM

          You know Tony W,

          I spent a bit of time with him in Spokane at the Silver Summit and I really did not find him to be smug there.

          A lot of people don’t care for him because of his “attitude” I guess. I will say that he made a good point to me when he said that he has problems with both of the major political parties. One being the spend and tax folks and the other being the tax and borrow folks.

          Regarding the subject of price rigging, I certainly don’t agree with him completely on that one.

          Anyway, I will always listen to both sides.

          Big Al

          Feb 02, 2014 02:50 PM

          Hi! Thanks! I think we like both the characters but sure I would be open to that idea. Not sure when exltacy someone would be able to come on (we already have trouble keeping the videos down to a reasonable length lol) but perhaps as something special . Thanks for commenting! Roth

    Feb 03, 2013 03:43 AM

    A Billion Dollar Idea (285,714 ounces of Sinclair’s 3,500 gold)

    I was going to post this as a reply to Dennis M @ Feb2 6:05am but it would likely get lost in the shuffle.

    Kudos Dennis … finally someone who understands the non-value of nominal valuations. Not that I fully understand it myself, but at least I’m aware of what my new polymer banknote won’t buy.

    StockCharts provides a means of measuring prices in gold; example here of TSX measured in gold:

    It isn’t a perfect measure because TSX is in $C and gold in $US so currency fluctuations make a difference to the end result. However, it’s an eye-opener.

    Over the past 3 years, TSX is up 14%; gold is up 58%; and TSX:gold is DOWN 28%.

    Another problem (I think) is that the value of gold does not stay constant as Jim Dines and others presume; I believe it was Jim Rickards who said that the real value of gold does fluctuate.

    Which brings me to the Billion Dollar Idea.
    Someone could provide a chart service which shows the value of a security in terms of real purchasing power (RPP) based on John Williams’ numbers, not some phony-baloney gov’t stats. Let’s say someone is swimming in exuberance because his/her Valero Energy (VLO) is up 159% in 3 years. Well, the RPP chart would reveal that VLO is actually up 50% or something.

    In other words; a chart that automatically adjusts for inflation for the time period selected.

    And that’s my thought for February; how far off the mark am I?

      Feb 03, 2013 03:07 AM

      Irwin you make too much sense.
      You are hitting the monetary mayhem nerve center.
      The stealth theft of monetary inflation is akin to a casino exchanging currency for chips.
      Technically the DOW is measured in points not USD.
      The façade of meaningless measures will lead us all to Potemkinville.
      I like your VLO example.
      However, if we are trying for a true measure of change in purchasing power we should adjust dividend paying stocks to reflect the liberated value of the distribution.

      Feb 03, 2013 03:52 AM

      You are not off the mark, Irwin, as I think you have a great idea.

      Big Al

    Feb 03, 2013 03:10 AM

    Irwin, I think its a good idea. I try to get people to look at things in gold as opposed to currency, especially retirment funds. Much easier to figure how much gold is needed for retirement than it is in currency. The # of oz gives a person a goal required that might be alot but it is achievable, with currency its much harder due to fluctuation and debasement.

      Feb 03, 2013 03:34 AM

      Your reference reminds me of the ING advertisement of know you #.
      The absurdity of determining a $ amount needed to retire in an environment of 85 billion dollar recognized monetary debasement a month for as long as the eyes can see is a symptom of the monetary lunacy in which we live. And ING is helping us “find our financial freedom”. Actually in the above ad the guy clipping his hedge (although made to be a buffoon) is right because there is no way in this environment to determine a # accurately….Go figure? You can figure all you want but if the integers you are figuring are constantly changing it is not math in which you are engaged.
      To have some idiots walking around carrying a definite # in a world of undetermined coin clipping is obscene. You must go to a financial advisor for him to find your #…… so he can sell you financial products to achieve your #…….all when the # is meaningless because the individual units are abstract. It is the often tried and true sales technic of making the customer sick so you can make him well scenario.
      Before we start on a path of treating symptoms we should listen to what the symptom is telling us. If your symptom is shivering….instead of taking a pill for shivering…..wouldn’t it be wise to step in out of the cold!

    Feb 03, 2013 03:55 AM

    Morning (on the West Coast) benb and Dennis M,

    Unfortunately too many people do not realize the truth in what you are both saying!

    Big Al

    Feb 03, 2013 03:00 PM

    Thanks Big Al, Dennis M, and benb; this blog is the first place I’ve seen where I can safely remove my tinfoil hat whilst I scratch my head.

    But hey, if anyone wants to see a sobering number; compare your net worth between 2000 and 2012 in dollars, then do the same thing in ounes of gold … that’s a shocker.

    On the bright side; if gold goes to $500 I’ll be rich, rich I tell ya when measured in ounces. 🙂

    Feb 03, 2013 03:51 PM

    Interesting point, Irwin.

    Thanks and if you’ve a mind to enjoy the cake and circus. Sorry I meant to say the Superbowl and beer!

    Big Al

    Feb 04, 2013 04:11 AM

    What Jay was saying in seg 3 is exactly correct the real productive workers are having their hard earned compensation taken from right under their noses.

    Maybe it’s time, and I say this with the greatest respect, that you guys need to stop talking about it and actually do something about it. Certainly talking about it to the masses on KEReport is not going to achieve anything. All the while the perpetrators of the greatest heist of Americas wealth are thumbing there noses at you.

    All the best

    Feb 04, 2013 04:19 AM

    I agree with you.

    Give me some ideas as to what you would suggest doing. What we are doing right now is exposing it.


    Big Al