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Mar 10, 2011

1. "The crisis feels over. I'm going to buy General Electric with a giant price plop into the stock. It just rose 300%. It will now rise another 300% ... for me!"

- Elmer Fudd Public Investor Idiot, March 9, 2011

2. "Standards of living will not in this century, if ever, challenge the 2004-2006 period." - Jim Sinclair, March 9, 2011

3. John Williams at Shadowstats.com says that rather than making 190,000 jobs last month, the US economy lost about 30,000 jobs.

4. Meantime, Bill Gross has exited most of his US T-bond holdings in his flagship bond fund. As a wild guess, would you think his actions mean he thinks the rates will stay low for the "QE forever with no consequences!" fantasizers, or does he perhaps think rates might rise, and bring an economic grim reaper onto the financial stage?

5. Fudd Blood will flow. The crisis is not over. It is accelerating and is solved only by the gold punisher sending millions to the breadline. There is no other solution. When you spin the roudette wheel, and your number does not come up, you lose. When your bet is bigger than the casino's cash and bigger than all their lines of credit, you go on a 100 year payment plan. That's the OTC derivatives bottom line.

6. There's a rumour going round that JP Morgan is in the hole for $50 billion on OTC derivative silver short contracts. Maybe, but they are in the hole for many trillions on other otc derivatives contracts. The bank continues to operate, because those trillions in otc derivatives bets are marked to model. If JP Morgan goes does down, that is like one hundred Lehmans going down. All banks all over the world would likely close permanently, if JPM is blown up.

7. Immediate revolution in the United States is almost a guarantee if Morgan blows. Bob Moriarty states that Americans might own about 200 million guns. If Morgan blows, expect 90% of those guns to be fired. So, the odds are also probably 90% that in any new otc derivatives blowout... the new otcd blowouts are marked to model, and the bank is recapitalized, with Ben Bernanke's electronic photocopier.

8. Just a tiny wake-up call to team "JPM is going to blow but they won't chop any margins on silver futures while they blow, so I make zillions while they blow, with my 5 silver futures contracts I bought with full margin on a loan against my house!": IF JPM is REALLY in the trouble on silver contracts that the fantasizers think they are in, then you can fully expect to see the comex take silver futures to LIQUIDATION ONLY AND 100% CASH PAID CONTRACTS, IN A ONE-TIME ANNOUNCEMENT.

9. Silver would go to $15 in about a week (or lower), and JPM would cover their supposed naked short positions at a $100 billion profit, mark the contracts to model, and put the opposing side of the trades on a payment plan to pay JPM their winnings. That's how the fantasy rubber.. meets the reality road.

10. UNG reverse split. I mentioned this earlier, but some of you missed it. When a regular company reverse splits, it's usually an act of dilution. When a FUND that holds 100% of its assets in a COMMODITY reverse splits, there is no dilution.

11. Your holdings in UNG still hold the same amount of NATGAS post-split as they did pre-split. If you own one ounce of gold and it is trading at $1400, and the Gman says, "gimme half your gold, and in return I'll re-price your half ounce to $2800, because I'm a generous man", THAT is dilution. In the case of UNG, you still own the same amount of gas now, that you did before. It's not an act of dilution. It's a renaming of ounces to ouncemeisters, or whatever.

12. Who cares what they NAME the container used to hold your gas. All you care about is how much gas is inside the container. UNG does invest all its funds into natgas. You hold the same BTUs as before. Nothing has changed except the name on the container. It said "five" on your natgas container yesterday. Today it says "ten". The label changed. Not the container. The New York stock exchange doesn't like shares to trade at under $5. That is the main reason the stock was R-split. Institutions won't purchase stocks in the same size if they don't trade NYSE.

13. I notice that financial advertisements are still using the phrase, "we offer income, balanced, and equity funds". In the 1990s, it was, "we offer equity, balanced, and income funds". They put whatever the greedy or terrified public investor morons are lined up to price chase, first in the sales pitch.

14. Whatever you buy, if you just re-invest all the proceeds back into more of that general item, you are not being very smart, and you are building a reverse plopgen while chasing price. A highly dangerous and generally self-destructive strategy.

15. When Fudd bought income funds, they went higher. Fudd price-chased more. He sat down with his advisors and bought more and more funds. As he gets his payouts, he's loading them into more income funds, "because you want to go with a winner". What a moron. He's chasing price by buying more and more of the funds and taking nothing off the table. Does he think the banksters will buy his garbage when it all comes tumbling down? The truth is that he's not thinking at all. He's chasing price out of greed and nothing else is occurring. As rates rise, income funds will be RAVAGED. I expect them to fall 70-90% with most payouts CANCELLED. Jim Sinclair's prediction of 100 years in the standard of living meat grinder... is quite possible.

16. Speaking of meat grinders, click here now to view the
BOMBS AWAY? GDX CHART. None of the seniors have made new highs while bullion has done so. There's a huge top apparent on the GDX daily chart and volume has been PATHETIC on this rally. But, is that top a pattern, or just a shape, on the chart? Is it all just a bankster painting?

17. I urged those of you who bought TOO MUCH gold items on TOO LITTLE WEAKNESS, to buy put options or lighten up a BIT into this strength. This is not a top call. It's a "how much gold can you REALLY handle?" call.

18. Hold the amount that lets you function rationally. I don't make top calls and I'm not selling any core positions now, and nor have I sold a single one since I marked the loss of sanity point at gold $1387 in October. The only core I've sold was some silver in a $23-35 pgen (ave exit price about $30), and I bought GOLD with ONE HUNDRED PERCENT of those proceeds, to LOCK profit and chop risk. I still hold a lot of silver that I will never sell. For the silver that I WILL sell, my next sell pgen doesn't even START until $50 and goes to $80!

19. Hoping the market goes your way isn't going to cut it on the battlefield against the banksters. If the GDX top is not a shape but a real pattern, and the Morgan silver issue is real, Martin Armstrong just might see his gold $1100 prediction become a reality.

20. My job is to lay out possibilities that others may not envision, so you can respond professionally on the price grids in any market situation. Fudd bought the stock market in 1999, while I said it was 1929 again. Fudd sold the stk mkt into Dow 6500, while I bought it aggressively. Fudd took no money out of the bank system, not even ONE CENT, while he sold all his stocks in failure, while I pulled cash out every week. What about...now? Well, I'm pulling some money out of the banking system, again, while SHORTING the stk mkt. That should tell you whether I think the crisis is over or not. Let me repeat: The crisis has barely started. Fudd, meantime, is buying the stk mkt in a PLOP, and proclaiming he knows the crisis is over because of a FEELING he has, which is an URGE that he NEEDS it to be over. That should tell you.. he is in big trouble.

21. The bully. I dealt with a lot of bullies as a broker. The bully demands the market answer to his demands. He responds to nothing, and demands everything. So he then fails totally, while I then laugh totally. I tell you when my trading accounts are making new highs. They made many new highs recently, largely based on the actions of the agricultural commodities, which I traded heavier than the gold stocks for many months.

22. My accounts are not at new highs now. They are DRAWING DOWN. Drawing down, and exponentially more so as I buy without let up in markets that are declining. The "kachingo good times" only come from trading smaller than is rational, and staying on the buy when others are liquidating, with the highest quality assets receiving the greatest allocation of your capital as they decline in price. As price goes "impossibly down", the bully begins to break apart mentally, as do regular investors like you or I. Especially if you, or I, allocated too much capital in a single price area.

23. When the market goes as the bully hopes, he boasts how smart he is and puts more money into the play. You need to understand that whenever gold takes the next substantial hit, bullies will begin to appear. The bully likes to beat on people when they are down, but he's really a total coward, too afraid to buy alongside the banksters as the great assets go on sale. Instead, he sells to the banksters and urges you to do the same, "before you are wiped out". Sometimes you need to isolate yourself from market bullies as you buy deeply into the discomfort zone. It's a tough enough job to see items go far below what seems rational for much longer periods of time than seems rational, but when you throw in the added thrills of the bully bashing you as you buy in that discomfort zone, it's enough to break a human being.

24. Either isolate yourself from the bully, or fight back. Be firm in your dealings with bullies. Sometimes the bully is a real person. At other times, the media stories together form almost a LIFEFORCE, an ENTITY, a sort of giant GHOUL, and you are BELITTLED for buying when you should have "known better", that gold "had to fall". You supposedly should have sold. Gold is on sale this morning, to a degree, at $1419. The bottom line for this fine Thursday morning is:

The ultimate asset.... goes on sale, for you!

Gridtime. I would suggest the bullies stand back, let the Graceland grownups buy into any deep discomfort zone as it happens, if it happens, while the bullies pack their bags, and get on the bus. Note the destination on the bus. It says final stop is.... the bread line. What if gold soars to $1700 from here, and the gdx top is just a painted blob on the chart? Are you prepared? What if something happens to send gold to $1100? Are you prepared? Those are your lines in the sand, on the current gold battlefield, not gold 1444 and 1400. Ride the Clydesdale, not the pony, in your grid size, or you won't be around with enough gold to satisfy yourself, when we DO get to $1700 and $2000.

Thanks!

Cheers