Weekend Show – Sat 2 Mar, 2013

The Resource Market

Kathy, Cory and Jeff and I found the California Resource Conference to be both educational and fun.  Given the nature of the venue, our show this week stresses the resource market.

Click download link to listen on this device: Download Show

In this show Al discusses:


Click download link to listen on this device: Download Show

Click download link to listen on this device: Download Show

Click download link to listen on this device: Download Show

Click download link to listen on this device: Download Show

Click download link to listen on this device: Download Show

Click download link to listen on this device: Download Show

Click download link to listen on this device: Download Show

Click download link to listen on this device: Download Show


Featuring:
Al KorelinJeff DeistAlbert MatterChris BerryCory FleckKevin Hudak
Linda ThorstadBrent CookJim LeTourneauGary CopeRick Rule
View related posts on: , ,

Comments:
  1. On March 2, 2013 at 3:25 am,
    Dennis M. O'Neil says:

    “I am not a dictator” followed by analysis by the late George Carlin:
    http://www.youtube.com/watch?v=J-k3ZtgJYPw

    • On March 2, 2013 at 6:34 am,
      JERRYthe Short.OOTB says:

      MOST IMPORTANT SEG….SIX (6)……
      Brain …….delivery of pain to the brain…….I think AL,put this in for the benefit of those who have beat their head against the wall, since the decline……in PM,
      (preventive mental)…………….OOTB

  2. On March 2, 2013 at 4:25 am,
    cfs2000 says:

    Why do people talk about an “inflection point” when they mean “turning point”. PLEASE stop it. An inflection point is a point at which the first derivative of the slope (the second derivative of the function) goes to zero. That is a necessary but not sufficient condition for a top or a bottom. An inflection point is a resting point or head-fake, a shoulder, which will then continue in the SAME direction as it was going before the pause.

    • On March 2, 2013 at 6:23 am,
      JERRYthe Short.OOTB says:

      I think they are reflecting on past experience, reflect or inflect,as an expression with which they have deflected, from the inflection of all material which has been respectfully submitted……..O^OTB….

      • On March 2, 2013 at 8:59 am,
        Dennis M. O'Neil says:

        At least the inflection point was not “impacting” earnings.
        I admit to committing grammatical butchery on a regular basis but for some reason the “impacting” trend hit me hard. I am glad the pundits have somewhat retired the misuse of impacts to the dust heap. Speakers should store the fateful impacts with their old hoola hoops.
        While suffering through one nontangible impacting another I was dis-heartened the Sunday Times would not feature an “On Language” assault on the offense to discourse.
        How many NYT writers can you say you miss?

        • On March 2, 2013 at 9:00 am,
          Dennis M. O'Neil says:

          Sometimes I mispell misspell.

          • On March 2, 2013 at 1:57 pm,
            JERRYthe Short.OOTB says:

            I once knew a Miss Pell, she had a difficult time with her spelling too…but, after a fainting spell,,the mispelling was repelled, and that in itself was a blessing too…………….

          • On March 4, 2013 at 9:52 am,
            John W. Robertson says:

            Typical. Just like a panda that eat shoots and leaves.

          • On March 4, 2013 at 10:56 am,
            JERRYthe Short.OOTB says:

            ho, John, that is funny……

  3. On March 2, 2013 at 4:32 am,
    cfs2000 says:

    Segment 2:
    I know it is fairly difficult to believe the president when he says something, but he has stated he will unilaterally reduce the nuclear arms of the US. Why do you not believe there will a large supply of uranium coming from the decommissioning of US nuclear weapons?

    • On March 2, 2013 at 6:13 am,
      JERRYthe Short.OOTB says:

      The prez…most likely wants to ship the nukes to Iran, as obsolete, so they(IRAN) can use them against Israel, and thereby, continuing the need for more war on terror….thereby, fleecing of America, and continue with the BARRY PLAN…destroy AMERICA….O^OTB

  4. On March 2, 2013 at 4:48 am,
    cfs2000 says:

    also for section 2: Don’t forget that China is massively building their navy. Many of the larger ships will be nuclear powered.

  5. On March 2, 2013 at 4:49 am,
    Dennis M. O'Neil says:

    In re NEM mentions…
    NEM is the turnstile for AU exposure on the S&P 500 board. Do you remember August 2011 when NEM was the only green square on a very red stock board.
    I love the AU price linked dividend.
    Currently 4.2% but will back off next quarter.
    .425 on the board for holders as of 3/13/13 because of last quarters AU price average being $1718.
    Entry here with a thirty handle…assuming dividend policy stays in place…would provide a compelling double digit dividend yield at $2300 AU.
    At $40 entry NEM current dividend policy adds %1 (.40 cents) payout for every $100 increase in AU over $2000. At this AU level .5% (.20 cents) plus or minus per $100 move in AU. At AU $1700 to $2000 .75%(.30 cents) plus or minus.
    When you convert the dividend policy yield to your cost basis this dividend policy is interesting.
    If you are bullish AU this is a “set it and forget it” kind of situation for the “boring side” of the portfolio.
    Take note Buenaventura announced a decline in production in the Newmont Yanacocha Peru mine on Thursday.
    New CEO tenure started Friday….DYODD

  6. On March 2, 2013 at 5:10 am,
    cfs2000 says:

    Further comment on Section 2: I notice that at one point in timee EUU was priced at over $20, but that after the massive price drop it changed it’s name from Tournigan to European Uranium. This raises a red flag to me.
    Also I notice 1.5 million warrants just expired at $2 (implying a financing at $2), and a not-unreasonable number of options have been given to insiders. The only insider action otherwise was one small sale; no buying. However, there has been some buying up of shares by the company and retraction and cancellation of same. One purchase being made at above market value it appears. For a company that is losing money, why would it use cash resources to do that?

    • On March 2, 2013 at 10:07 am,
      cfs2000 says:

      On digging a bit further into EUU:

      Is there a difference between “Arriva owns x% of a company” and “Arriva sold a prospective piece of land in Sweden and insisted a member be put on the board and took shares in EUU instead of cash”?
      I caalled that painting a description ina less than full disclosure, more favorable light.

  7. On March 2, 2013 at 5:20 am,
    cfs2000 says:

    Section 4:
    Why do you think P/E ratios of 10 cheap for mining stocks, with their associated risks, when megaliths like GE are also selling in the same ball=park P/E ratios.

  8. On March 2, 2013 at 5:22 am,
    cfs2000 says:

    Section 5:

  9. On March 2, 2013 at 6:01 am,
    cfs2000 says:

    Section 8:
    It will be a world-wide collapse, not just the US.
    China ALREADY STOPPED funding the US, had you not noticed?
    It is the collapsing European economy that is funding the US.
    I have thought Mr. Rule one of the most intelligent people in the resource area for many years. He never seems to make a dumb statement. Always right and if he does know something, he admits it.

    • On March 2, 2013 at 9:20 am,
      cfs2000 says:

      omitted a “not” in my last sentence!

  10. On March 2, 2013 at 6:50 am,
    richard says:

    The resource stocks are really “dead in the water” but it’ll ultimately reverse. NEM broke important support and looks like it has a move down. The PMs could be bottoming right now and even though they do it doesn’t necessarily mean some of the resource stocks might not move lower. On KWNs, a number of contributors speak about a V shaped recovery for the PMs but I believe the odds of that is limited since it would take a major “black swan” event to happen and I’ve been looking to the skies and I don’t see a speck yet. More likely is that the PMs bottom and build a base into the fall with a back and filling into the fall. We just don’t want gold to take out $1500.00 since the journey going forward will be more arduous.

    • On March 2, 2013 at 6:59 am,
      JERRYthe Short.OOTB says:

      this is a good time to start the search for the ten baggers……this has been a good two years to set back and see the churning, and for the fake companies go by the wayside,
      As, anyone who has run a company, knows,,,the average time for a company to go out of business is seven years……that is burn time,usually the borrowed money expires, and the business is exposed for what it really is…..a no go………….ootb

      • On March 2, 2013 at 7:10 am,
        richard says:

        Jerry, your key word is “search”. There’s no hurry yet to take positions since we’re seeing a wash out occurring. Due to the type of technical damage to a lot of good companies, what you see when they begin to reverse is a slow bottoming and building. It gives an investor a great chance to slowly take positions—-I’ve learned in the past that it’s not fun to catch “falling knives”.

      • On March 2, 2013 at 3:30 pm,
        marc says:

        Jerry,
        Great comments/insight…succinct too.

        • On March 2, 2013 at 4:12 pm,
          JERRYthe Short.OOTB says:

          thanks marc…for the comment…and support,,,,,you are always a pleasure to hear from…best…..ootb jerry

    • On March 2, 2013 at 8:59 am,
      cfs2000 says:

      I appreciate your comments; usually I agree with them. This time I still do.
      A funny thing happened yesterday when I was standing waiting for a bus, snow on the ground, but blue sky and glorious sunshine, when I hear an unmistakable bird sounds from above. I looked up and there were several chevrons of brown canadian geese flying north. (Is that an omen, considering it was about 1:30 pm on Friday, just about when the market started heading back up) On a more serious note, I believe the gold price has to go back up above $1600 and hold there before we can be sure it is heading back upwards.I like the apparent strength in Silver, which bounced off $28, but again we are not out of a possible meandering sidewards for a while in all PMs.
      I do note that with platinum priced equal to gold, it is probably a safer bet at this time.
      The most positive aspect for all PMs is that it does not appear mathematically possible for the Fed to end PE, regardless of what Bernanke may say. The deficit can only be funded by the Fed using QE and buying treasuries. China is not increasing its purchases, mere rolling over into shorter maturities.

      • On March 2, 2013 at 9:02 am,
        cfs2000 says:

        How could I mistype PE instead of QE above?

        • On March 2, 2013 at 9:20 am,
          Jeff Deist says:

          P and Q are at opposite ends of the keyboard….

          • On March 2, 2013 at 9:22 am,
            cfs2000 says:

            I know!

          • On March 2, 2013 at 2:01 pm,
            JERRYthe Short.OOTB says:

            How does Jeff know these things……I thought his secretary did all the typing

  11. On March 2, 2013 at 6:51 am,
    Mike says:

    Al,
    I sure hope you sold your New Zealand Energy shares when they were up in the nosebleed level. Man! Have they ever tanked!

  12. On March 2, 2013 at 6:54 am,
    Mike says:

    I can’t believe that there is no one mentioning Luna Gold on any of these podcasts and forums. Please go look at the chart for this company and what its stock price has done while gold has been in this slump for the past 1.5 years.

    T.LGC

    • On March 2, 2013 at 7:19 am,
      Dennis M. O'Neil says:

      A little bit of Ghana geology without Africa.

    • On March 2, 2013 at 3:33 pm,
      marc says:

      Mike,
      You brought this up before…Luna Gold appears to be a real solid/safe bet in this marketplace. It is one of the juniors under the umbrella of a SANDSTORM mining stream agreement..some others being Silvercrest, Brigus and Luna.

      • On March 2, 2013 at 4:25 pm,
        Dennis M. O'Neil says:

        All the miners mentioned have interesting projects that are outside of the Sandstorm streaming agreement. Sandstorm has exposure and options on Luna and Silvercrest underground development but all three have interesting other irons in the fire.
        I was surprised by Sandstorms Entrée Gold deal I guess the potential upside offset the wait and Mongolia risk…seemed out of character.

        • On March 2, 2013 at 4:52 pm,
          marc says:

          Thanks, Dennis

    • On March 2, 2013 at 7:50 am,
      richard says:

      As we go forward in our investments, I believe one thing we have to keep in the front of our minds is that the whole world is in a process of “deleveraging.” When you look at the TSX, it may be just another institution that is a victim of the general process. Look at all the capital being decimated along with incomes dropping along with the velocity of money approaching levels last seen in the great depression.

      • On March 2, 2013 at 8:40 am,
        Dick Tracy says:

        “What is that, a bread line or a bank?” I am beginning to see a deflationary depression ahead. In the 1930’s you could spot the line ups because they didn’t have ATM’s everywhere or food stamps.

        Lately I feel that the failure of The Fed’s treatment has become obvious to the point of humiliation and the Administration is starting to lapse into a stupor or silence and the media here has slowed reporting on the sequestration, leading to an almost universal belief that The US has gone over the falls and no amount of tweaking matters anymore. DT

        • On March 2, 2013 at 9:04 am,
          richard says:

          I think they’re all like deer in the headlights—-immobilized since there are no easy answers any longer.

      • On March 2, 2013 at 9:05 am,
        cfs2000 says:

        Folks, one easy place to look up a graph of Velocity of money is on Paul van Eeden’s site.

    • On March 2, 2013 at 3:37 pm,
      marc says:

      Yikes…Mike…Yikes

  13. On March 2, 2013 at 7:43 am,
    James (the lesser) says:

    Some of the worst months for gold statistically March, April and May are still ahead of us. So this thing could get even more uglier than what it is.

    • On March 2, 2013 at 9:09 am,
      Dan, calgary says:

      Consider options out to September. Buy at the low in April or May and have the expiry date set for after the spring and summer BS. It is a paper gold promise that can backfire but is an optional tactic to try IMHO.

      Dan

  14. On March 2, 2013 at 8:33 am,
    cfs2000 says:

    My advice to all is to listen to Mr. Gold (Jim Sinclair) on Kingworldnews several times, with regard to PM prices.
    Keep an eye on Dr. Copper for general stockmarket behavior.

    • On March 2, 2013 at 9:02 am,
      richard says:

      Copper is a key indicator—right now it is falling and looks weaker. I mentioned a couple of weeks ago that I was shorting oil and it’s been dropping. With money velocity tanking and commodities tanking, what is it telling us? The optimist would say that it is lowering the input costs of companies and go long the stock market. The pessimist would say global demand and manufacturing is going south and we’re staring at the cliff of a deflationary depression. Since I’ve never seen a secular bull market start at these levels and for other reasons, I believe if you want to pick your poison, the latter scenario is the odds on favorite.

      • On March 2, 2013 at 9:15 am,
        cfs2000 says:

        I am a strong believer that the secular trend is your friend until it changes. Right now I tend to believe the trend is flatness.
        Trend changes occur because of fundamentals.
        Right now we have a deflationary depression competing against QE, with the net result a tie.
        For individual stocks I look at RSI for indication of potential changes on the horizon.

      • On March 2, 2013 at 9:34 am,
        Dick Tracy says:

        Hi Richard, I believe that this downtrend in the precious metals market is pointing to deflation. If The Feds money was given to the guy in the street instead of being hoarded by “Big Banks and Corporations” we would definitely have hyperinflation but because of a lack of employment, and liquidity for the average guy, and the fiasco in 2008 took what was remaining in the productive segment and washed it down the drain.

        This is a perfect setting for commodity prices to fall even further. The junior stocks are not going to pick up unless commodity prices improve and I don’t see that happening. When interest rates start to inch up prices will fall more because there is even less money coming into our pockets.

        Unemployment another key indicator of deflation is now at record levels and every time a person loses a job they are not buying. Gold and silver are the barometers to watch and if gold drops below &1500 it will be pointing in one direction. Remember America has a distinction all of it’s own up until now, Americans are the only people who have driven to the poor house, prosperity is very illusive. DT

        • On March 2, 2013 at 9:48 am,
          richard says:

          DT, good post. That’s why I’ve been starting to accumulate some ot the PM ETFs (a lot of individuals deplore) at these price levels since we’re at major support. If they take out that support, I’ll sell and limit my losses. If we hold (which I suspect and hope for), I’ll add as they slowly base and move up into the fall.

  15. On March 2, 2013 at 8:41 am,
    Mark Alan says:

    Great show Big Al! As always of course.
    I came across this article and thought it rather interesting.
    http://www.mining.com/gold-price-investors-are-dumping-over-10-tonnes-per-day-83757/?utm_source=digest-en-mining-130301&utm_medium=email&utm_campaign=digest

    • On March 2, 2013 at 9:07 am,
      richard says:

      Mark, good to see you post. I’m sure the Federal Reserve is looking at the plunging money velocity and saying: “let’s cut back on money printing”. I love jawboning by these people and others.

  16. On March 2, 2013 at 9:27 am,
    cfs2000 says:

    Sarcasm is not always clear in printed media!

    • On March 2, 2013 at 12:10 pm,
      Dennis M. O'Neil says:

      SARCASM!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

    • On March 2, 2013 at 2:05 pm,
      JERRYthe Short.OOTB says:

      it usually can be determined by the sender…………….OOTB

  17. On March 2, 2013 at 10:44 am,
    cfs2000 says:

    Big Al,
    Is there any way to enlarge this box in which I am currently typing, so that I can proof-read and hopefully catch more typos?
    Or maybe we are supposed to keep our comments under three lines!

  18. On March 2, 2013 at 1:25 pm,
    marc says:

    Heys guys,
    If you didn’t learn ANYTHING from the Rick Rule interview, then the GOOD Lord help you…..because WE CAN’T…what a highly articulate, concise – no-nonsense guy…..RIGHT ON! 🙂

  19. On March 2, 2013 at 2:15 pm,
    Dennis M. O'Neil says:

    In re “Own something they can’t print”…..

    Why gold? why precious metals? I always think back to Walter Houston’s performance in TofSM directed by his son John Houston…not the scene of him dancing ion the desert mountain…the flop house scene linked to below:

    http://www.youtube.com/watch?v=EQyqvFVe4Y4

    Howard: Say, answer me this one, will you? Why is gold worth some twenty bucks an ounce?
    Voice: I don’t know. Because it’s scarce.
    Howard: A thousand men, say, go searchin’ for gold. After six months, one of them’s lucky: one out of a thousand. His find represents not only his own labor, but that of nine hundred and ninety-nine others to boot. That’s six thousand months, five hundred years, scramblin’ over a mountain, goin’ hungry and thirsty. An ounce of gold, mister, is worth what it is because of the human labor that went into the findin’ and the gettin’ of it.
    Voice: I never thought of it just like that.
    Howard: Well, there’s no other explanation, mister. Gold itself ain’t good for nothing except making jewelry with and gold teeth.

    • On March 2, 2013 at 2:43 pm,
      Dennis M. O'Neil says:

      When I heard the line yesterday “I am not a dictator.” I thought of the beginning of one of the greatest speeches filmed. When a quiet man speaks you tend to listen. The three and one-half minute time investment is well worth it. Bring your thinking cap. Compare “I am not a dictator” to “I do not want to be an Emperor…that is not my business.”
      http://www.youtube.com/watch?v=45BotfjfGpE

      • On March 2, 2013 at 3:15 pm,
        cfs2000 says:

        Why is it that some people (often democrats) explain exactly what they are or are doing by either denying it or accusing the opposing party of what they are actually doing themselves?

      • On March 2, 2013 at 4:05 pm,
        JERRYthe Short.OOTB says:

        he does not want to be and emperor, or dictator….HE,only wants to be KING,,,,,lets make him” King for a day”, and then impeach him,……..

  20. On March 2, 2013 at 2:44 pm,
    Irwin says:

    Anyone wanting to diversify out of US dollars?

    Canadian dollar on sale: 7% discount from high of 2011

    http://scharts.co/VVMfkE

  21. On March 2, 2013 at 4:28 pm,
    sally says:

    Doc, according to Taleb a black swan is something you can’t see coming,,
    so really there’s no point looking, if by definition it’s an “unforeseeable event”

    • On March 2, 2013 at 5:32 pm,
      richard says:

      Sally, you’re absolutely right—-thqt’s why I mentioned a speck in the sky. Maybe that speck is just a goose—-we have too many of those freakin birds around here.

      • On March 2, 2013 at 6:39 pm,
        marc says:

        Doc,
        HHAAA!

  22. On March 2, 2013 at 6:19 pm,
    cfs2000 says:

    I do my T A work on a weekend.
    Notwithstanding Mr Rule’s comments, I do not see clear technical signs from HUI that we have turned yet. (You can, indeed get some severe cuts trying to catch falling knives) I want to believe we are close, but….
    The key value in Gold appears to me to be $1560, which if penetrated has a back up key value at $1508, and I don’t like to look lower until I have to.
    I think when Hong Kong opens up on Sunday night, if the price rises enough then that might reduce any attack on Monday in London. The observation which leads me to this conclusion was the appearance of downward momentum exhaustion in the last few hours of trading on Friday. I will say a lot of money was made and a lot of money was lost last week by traders. it was my expectation that there would be violent up and down motion in gold before the turn around was over. That still is my gut reaction. I understand what Jim Sinclair said about the big money being smart and would not try to shift the price while they are picking up as much gold as possible, However, I believe there are also forces trying to keep the price down, while losing as little money as possible; I believe, because of the price action, we are due for a rebound up early next week, with another attack coming on Friday. That’s my 2 cents!

  23. On March 2, 2013 at 7:39 pm,
    richard says:

    I hope your 2 cents is correct.

    • On March 3, 2013 at 6:50 pm,
      cfs2000 says:

      When Sydney opened, gold start out up. So I’m not wrong so far.

  24. On March 2, 2013 at 8:18 pm,
    cfs2000 says:

    Expect dollar to rise next week as European break-up becomes news.

    http://www.telegraph.co.uk/news/worldnews/europe/italy/9904979/Italy-paralysed-as-Grillo-plots-exit-route-from-euro.html

    It is becoming clear that Germany simply cannot afford to hold the common currency together.
    It is clear that Italy, Greece, Spain and then Portugal will leave the euro and establish their own currencies.
    I reported last year that I heard DELaRue was printing banknotes for (if my memory is correct) Spain, but I expect Italy to be the first to leave the euro.
    I expect a free-trade zone to be established in the EU, with ultimately over a dozen different currencies used. Since there is no precedent for any country to leave the Union this will not take place quickly, but over a year or so. Expect France to put as many obstacles in the way as possible.

  25. On March 2, 2013 at 8:25 pm,
    Fred Astair says:

    What you peeps have never figured out why the U.S. can print dollars to infinity is that the U.S. Military backs the U.S. dollar and if you try to hurt the U.S. dollar, the U.S. Military will destroy you and wipe you off the face of the earth.

    • On March 2, 2013 at 8:32 pm,
      cfs2000 says:

      Ooo, I’m so scared. the US might win a war, like it did in Korea, Vietnam, Iraq or Afghanistan!

  26. On March 2, 2013 at 8:53 pm,
    cfs2000 says:

    That’s a lot of damage being done in Europe!
    And those folks for the most part don’t have guns.

    • On March 3, 2013 at 1:34 pm,
      irishtony says:

      hi cfs…….Thats the scary thing , wait till it kicks off in the States…..the violence & death could make Europe look like a teddy bears picnic in comparison..

    • On February 1, 2014 at 8:08 am,
      Oemie says:

      Arlietcs like this are an example of quick, helpful answers.

    • On February 2, 2014 at 5:47 am,
      Sara says:

      Locke: From what I know of the asian ladies, she could be 135 years old and still look that good. You dnilefteiy got a keeper if she looks like that, like’s the hardware store, cooks (?), cleans (?), raises your babies. Very blessed, Sir.

  27. On March 3, 2013 at 6:14 am,
    Dick Tracy says:

    “IS CHINA’S REAL ESTATE MARKET ABOUT TO BUST,” watch 60 minutes tonight 7pm. EST! DT

    • On March 3, 2013 at 7:46 am,
      Ann says:

      Thanks. D.T Will watch the segment ,for sure, should be an interesting segment.

  28. On March 3, 2013 at 7:01 am,
    cfs2000 says:

    It is not only the US that has the best politicians money can buy.
    http://www.telegraph.co.uk/news/worldnews/europe/spain/9855930/One-million-call-for-Mariano-Rajoy-to-resign.html
    If you graduate from either a Spanish or Greek university you have a 50-50 chance of finding a job! Is this a situation coming to the US?

  29. On March 3, 2013 at 7:06 am,
    cfs2000 says:
  30. On March 3, 2013 at 7:18 am,
    cfs2000 says:

    A really interesting currency chart:

    http://tdvmedia.com/getblog.php?id=149&ac=72XIG309

  31. On March 3, 2013 at 7:49 am,
    Dennis M. O'Neil says:

    CORE POSITION

    Question….:What is the difference between a Portuguese anti-austerity protest and the Wisconsin government workers organized protests when Gov. Scott Walker proposed modest budget maneuvers?
    Answer……: Location
    http://www.bbc.co.uk/news/world-europe-21643853

    Our focus tends to concentrate on the currency dominant in the market in which we live.
    Survivors of a currency crisis in the past give much more attention to the value of their currency in terms of other currencies and hard assets.
    Europe may become the focus the next few weeks with an occasional USS Harry S Truman story. Then the continuing resolution issue returns. Then Japan will re-enter center stage. We are in a currency war but the G-20s say “Shusha da mouth!!! We do not wanna talka about it!!!!!” The media will draw attention to wherever its lens choose to point. Where the cameras point pressure builds easing pressure on where the cameras for the moment ignore.
    The overall direction for all currencies is down versus the metals.
    As long as Wisconsin-esque teachers and government workers rally with the same mentality of a Greek national strike there is only one direction for this fiscal fiasco monetary mayhem to travel. There will be moments when one currency will rally versus another.
    But soon the cameras angle will change and thus the monetary flow.
    What use is it to intensely study charts that have a contrived manipulated variable providing the y axis.
    Take a step back from the charts and ask yourself…..:
    Question: What does a teacher occupying the State House in Wisconsin and a striking ferry pilot in Greece have in common?
    Answer: Currency Chaos….Fiscal Fiasco…Monetary Mayhem!
    The underlying problem will manifest in many symptoms.
    You can chart this and measure that but the measure is still merely taking the temperature of a sick patient. The fever tells you are sick. The fever does not tell you the cure. Do we feed it or starve it?
    We intuitively know the ultimate cure.
    Do not become distracted by a change of focus.
    Do not get caught treating a symptom thinking it was the underlying disease.
    When you begin to pull at your hair…look at a longer term chart….change the y axis to the currency the cameras have their then focus.
    Know the camera lens will inevitably change direction.
    Take a step back….trade away….pull your hair….. but leave your core position alone!

    • On March 3, 2013 at 8:12 am,
      Clay says:

      Great post Dennis, really. There are so many crazy and insane things going on that my neck is getting sore from shaking it. You are so right. Stay safe and secure and don’t volunteer because there will be no heroes in this war except those that survive.

      • On March 3, 2013 at 8:30 am,
        Dennis M. O'Neil says:

        It is unwise for a slave to invest in a chain company.

  32. On March 3, 2013 at 7:50 am,
    Clay says:

    This is a good time to step way back and get as big an overview of everything as possible. The question of how much truth and reality in what we read and hear is always a question, but right now it IS the question.

    cfs said above that the world is in a process of deleveraging, that is true but importantly what are the processes? Financial repression is one of these procedures along with currency debasement. These and capital controls both on the table and under the table are government processes being used to deleverage, but the irony in this is that Central Banks are massively leveraging up. Deleveraging of the private sectors is shown as decline in velocity of money whereas leveraging up of central banks is the accelerating increase in money supply. Both graphs can be viewed at the St. Lois Fed web site.

    There are also under the table, hidden and not reported deleveraging and leveraging processes. It is speculative what these are but I believe they are related to both money printing leveraging up of central banks and rapidly changing government edicts and laws. Massive money printing of the Fed and the advent of high frequency trading in the markets began at about the same time which tells me they are probably both related and connected. Also the rules and regulatory enforcement of HFT are very different from those of individuals.

    I could go on with the above but will soon be confused and forget my conclusion, so instead I will give my conclusion.

    All the nations of the World are in many multiple problems which can be measured through economics and because all are using Keynesian based systems there is a consensus to go full speed ahead. This is the Fed’s concept of attaining escape velocity and everything is being done to achieve it. They see it this way because if they do not achieve economic escape velocity they will burn and crash. The rise in the DOW, S&P and general market graphs this hopeful trajectory where the Fed wants it to go up and stay up, anything and everything will be done which is why we see and read both truths and untruths.

  33. On March 3, 2013 at 7:52 am,
    Clay says:

    Dennis, You and I both wrote and posted above at same time, minds think alike.

    • On March 3, 2013 at 8:17 am,
      Dennis M. O'Neil says:

      Clay that is funny…one minute apart!
      We can summarize our posts in a phrase.
      Deleveraging with Drastically Debased Dollars.

      • On March 3, 2013 at 8:33 am,
        Clay says:

        Yep! Some think the dollar wins but in reality there are no winning fiat currencies or derivatives, the only winning assets are real things. Governments are going to make it pure hell for anyone trying to hold on, but I think all the James (“Jim’s”) out there (Sinclair, Grant, Turk, Rogers, Rickards, et. al) are right in their consensus.

        • On March 3, 2013 at 8:51 am,
          Dennis M. O'Neil says:

          The conundrum is today when we pay debt we destroy the measure of the debt.
          Whatever happened to payment in specie where nothing was destroyed but the obligation.

  34. On March 3, 2013 at 8:11 am,
    cfs2000 says:
  35. On March 3, 2013 at 8:45 am,
    cfs2000 says:

    Did you listen to Andy Maguire?
    He said we almost broke through $1700 before Vhinese New Year and had we done that there would have been a default.He is saying a rise is imminent AND settlement delivery will be in cash not metal and a default like MF Global may be expected. Counter party risk is high. Do NOT be in paper gold.
    He is talking weeks not years to default, in contradiction to Sinclair’s belief.
    They can’t both be right.
    You be the judge.
    I’m holding on to my physical.

    • On March 3, 2013 at 9:24 am,
      clay says:

      cfs, What do you think of all the reported physical offtake of gold from the London markets? Is it real? Also what does all the sovereign gold repatriation really mean, in other words how much real gold exists at the Fed Vaults and how many owners believe they own the gold. I wonder if anyone at the Fed really knows.

      But more the point, do you think the Federal Government would or will confiscate all private gold they can to pay off any rehypothicated gold they or the Fed has sold and shipped out?

      Lots and lots of questions so few real answers, my guess is those at the Fed and government are looking into all these things. They would like to know how much gold is held by Americans and where, perhaps they will demand people to disclose it and if so how and when?

      • On March 3, 2013 at 9:56 am,
        Dick Tracy says:

        In 1952 the last year The US gold supply was audited they reported 22,000 tonnes of gold. By 1973 after Nixon took them off the gold standard they reported 8,500 tonnes left but not audited now they claim to still own 8,135 tonnes of gold.

        If they get desperate enough they may try to confiscate private gold and they may try to nationalize the larger US gold companies that have operations in their jurisdiction. They have proven that the rules don’t apply to them only to the private citizens. DT

      • On March 3, 2013 at 10:58 am,
        cfs2000 says:

        Do I think London offtake is real? Yes, everything thing I see on the ground about supply and premiums seems to indicate sporadic extreme shortages.
        Gold is being moved around to cover shortages.
        I have been in the US since Christmas so I’m 2 months out of touch.

        Do I think the Gov’t would confiscate gold? No. (I think they would have serious problems collecting if they tried.)

        I would guess the ratio of people who think they own gold to those physically holding could easily be 10:1

        The Gov’t does know who bought gold inside the country and how much.
        I have moved all mine, but not sold a gram.
        My grandfather, who went bankrupt in the Great depression carried a gold guinea in his wallet till the day he died, and always said it was the only real money. I don’t agree with that statement, but I understand it.

        I do not believe the US government holds anything but paper gold; it’s all been leased out.

        I am seriously worried about capital controls and increasing gov’t oppression, and possible war (15 or 20 years away) and it is for that reason I am leaving the US.
        I will be non-resident in 2016, but most of my assets will be out of reach of the US Gov’t by 2015. This is not a decision taken lightly or wanted, but I started thinking about it about 5 years ago and decided about 2 years ago.

        • On March 3, 2013 at 12:30 pm,
          clay says:

          cfs, I agree with everything you said, and in fact have been doing same as you only I am a bit slower. I so wish I had done what I knew must be done three years ago, but wife is slow to convince. Yes leaving is good advice as the iron curtain will likely close completely in next 3 years. Makes me sick thinking about it as I really don’t want to see my country end up where it appears it is going. I started thinking about leaving 3 years ago and started about 1 year ago, I think it might be wise for me to hurry and catch up fast.

          Wow, your ratio of how many people who think they own gold and how many actually do is higher than I would have guessed, but truth is I have not thought about it much. Your point is very important however because that give us a good idea of where this country is going and what government will do.

          Alastair McCleod wrote a really good article about the so called gold held at the Bank of England.

          http://www.goldmoney.com/gold-research/newsdesk/a-detailed-look-at-bank-of-england-gold.html

          • On March 3, 2013 at 1:18 pm,
            cfs2000 says:

            I was talking about investment gold, not Jewelry, of course.

            I used to use paper gold for trading. It made sense because the bid/ask spread is smaller and dealing is fast and easy. I don’t trade any more just hoard. I don’t expect ever to sell my gold, and at the rate my son is going he probably won’t need to sell it. This will be multi-generational I suspect and unlike real estate, no country has figured a way to tax it.

    • On March 3, 2013 at 4:42 pm,
      JERRYthe Short.OOTB says:

      ditto….cfs…..anyone selling may not get another opportunity to purchase back what they sell……ootb

  36. On March 3, 2013 at 9:50 am,
    Dennis M. O'Neil says:

    Copper has historically been a key indicator and understand others know that:
    http://online.wsj.com/article/SB10001424052748703471904576003940890805016.html

    Apparently, In December 2010 JPM wanted to buy a tangible asset they were not already net short. When JPM Morgan wants “weak economy” to be the mantra of the day fork lifts will be moving Dr. Copper out of the London warehouse.

  37. On March 3, 2013 at 11:57 am,
    Dennis M. O'Neil says:

    How to make your home smell awesome with alliteration…..

    Beer Braised Burnt end Barbecue Beef Brisket

    Irish you are missing out big time!!!!!!!!!!

    • On March 3, 2013 at 12:45 pm,
      Dennis M. O'Neil says:

      Due to a 1 and 1/2 pound surplus of Costco Chilean blueberries we are also firing up:

      Baked Blueberry Banana Walnut Bread

      But we may skip the wlanuts.

      • On March 3, 2013 at 1:40 pm,
        Dick Tracy says:

        DB, you got my taste buds going, my family’s coming over, were having 2 prime rib roasts with bone, over 12 lbs of beef, brussels sprouts, yorkshire pudding, smashed yukon gold yellow flesh potatoes, horseradish, moosehead beer, very dry red wine and georgian bay apple crisp with granny smith apples. DEEEEELICIOUS! DT

    • On March 3, 2013 at 1:50 pm,
      irishtony says:

      Sorry..DENNIS..missed my connecting flight in Spain…the riot’s & strikes….British main stream media playing it down…..Bastards !!!

      • On March 3, 2013 at 2:49 pm,
        Dennis M. O'Neil says:

        The brisket and potatoes paired like Romeo & Juliet.
        The also shared a similar fate.

  38. On March 3, 2013 at 12:21 pm,
    richard says:

    Just a comment on Jim Sinclair’s comment not to trust the COT reports. This comment is from TFmetalsreport: “One of the reasons I think the data in the COT are accurate is that every contract has a long and short side. Therefore, to lie in the large trader reporting system that underlies the compilation of the COT, would require two lies; one by the big commercial lying and another by the counterparty holding the opposite side of the contract. I can see JPMorgan wanting to lie on its COMEX holdings, but I can’t see why a counterparty tech fund or speculator would assist in that lie. Please remember that lying on a large trader report is illegal and will be prosecuted by the CFTC (one of the few things they do well).”

    I tend to agree with this comment.

    • On March 3, 2013 at 12:30 pm,
      Dennis M. O'Neil says:

      Richard you assume JPM are not the:
      http://www.youtube.com/watch?v=u9Cqu6iRC2E

    • On March 3, 2013 at 12:34 pm,
      clay says:

      richard, What if it is the same party on both sides of the same contract? Certain parties in the market are outside the law so reporting is not necessarily the truth.

      How many bankers have gone to jail in last few years?

      • On March 3, 2013 at 12:55 pm,
        Dennis M. O'Neil says:

        Arthur Anderson was the last to be taken to task for Enron.
        The indictment was enough to end them.
        Ironically I think the conviction was reversed by the Supremes on a technical.
        Whatever happened “beyond the appearance of impropriety”?

        • On March 3, 2013 at 12:57 pm,
          Dennis M. O'Neil says:

          Not a bank …but you get my drift.

      • On March 3, 2013 at 1:33 pm,
        richard says:

        Dennis and Clay; I wonder if it would be a little more difficult for JPM etal. to be involved in subterfuge under Todd-Frank. The SEC and CFTC now have the requirement of large traders to file the form LTR (large trader report). I don’t know if this and other regs undercut the gamesmanship.

        • On March 3, 2013 at 1:57 pm,
          irishtony says:

          Well done ..Richard you managed to name 3 corrupt entity’s in 3 line’s..

          • On March 3, 2013 at 3:04 pm,
            Dennis M. O'Neil says:

            He only needed 1 line.

          • On March 3, 2013 at 4:21 pm,
            Dennis M. O'Neil says:

            We need a new rule….. it will fix everything …here goes…. “Thou shall not steal.”

        • On March 3, 2013 at 3:23 pm,
          Dennis M. O'Neil says:

          It may be a mistake to assume honor before dishonor in our current environment.

  39. On March 3, 2013 at 4:01 pm,
    Dennis M. O'Neil says:

    subterfuge
    Our current monetary system was concocted under the subterfuge of a South Carolinian duck hunt and has never looked back. The whole thing is a farce!

  40. On March 3, 2013 at 6:44 pm,
    cfs2000 says:

    In case you had not noticed, when Sydney opened gold went up
    When Hong Kong opened it went up further.
    It’s settling back now.

  41. On March 3, 2013 at 7:35 pm,
    Dennis M. O'Neil says:

    Volume and earphones required. “Oh be something you love and understand.”
    If you need a 5 minute attitude adjustment. A couple pencils will help…..:
    http://www.youtube.com/watch?v=sMmTkKz60W8

  42. On March 4, 2013 at 5:53 pm,
    Lore says:

    I am done with this market. No offense to Mr. Korelin or his colleagues, who work hard to promote good companies with good management that deserve greater success under previously normal circumstances, but paper is paper is paper, and there is going to be nothing but more corruption and loss of faith in proxy instruments of all kinds so long as the psychopaths remain in charge of this financial system. TO HELL WITH THE CENTRAL BANKS. TO HELL WITH THE REGULATORS. TO HELL WITH INFLATING JUNIOR COMPANIES. TO HELL WITH THE EXCHANGES AND “REGULATORS” AND ALL THE ANALYSTS WHO HAVE BEEN TOUTING THESE SHARES FOR THE LAST FIVE YEARS. TO HELL WITH THEM ALL.

    You want to keep chasing the carrot, be my guest. I’m taking my wealth completely out of this God damned system.