10-5-09

The Stand

So, did you grab yourself some Biotime stock when I first mentioned it? If not, look away...

That stock has tripled.

Well, the market did indeed finish up in September as I predicted and contrary to the history that states September is the worst of all the months for the stock market.

But it was only just up.

In fact, I'm starting to doubt if this thing can really make up past 10,000 as I've been expecting- it's running out of steam barring some new development. I recently wrote about how strange it was that the bonds had stayed so high in the face of a rising stock market (bonds and stocks usually trade opposite) and that something would have to give. The bond market is considered more sophisticated than the stock market and it could be they were right after all to stay high and in demand.

If in doubt, get out.

The trouble now is that America might be on to the Federal Reserve's game and how they bankrupted America just to serve the banks that created it in the first place. The only senator in Washington who understands and fervently fights for the Constitution is Ron Paul and he's been on and on at Congress to have the Fed audited so Americans can know where all the money they've created has actually gone (we all know it's gone to their banking buddies).

My friend, this is a fascinating development. Are people finally putting down their OK! magazine and waking up and paying attention about what's going on?

For the first time, people believe that their children's prosperity will be WORSE than theirs. I must say, I'm greatly encouraged by this revival of revolutionary spirit sweeping America currently. It's healthy.

But, it's also very worrying...

The Federal Reserve and the banks who control it are the ones who REALLY control America, make no mistake. It's not Obama, bless him (in fact, you'd be surprised at what little direct power a president actually has- he's just a figurehead).

Any government's worse nightmare is a people rising up and questioning them, just ask China. You have to keep the masses happy with a job, free money and prosperity so they leave you alone and vote for you.

So what's a government to do if that nightmare emerges like it is doing now?

They must cause a distraction. A scapegoat. They have to divert your attention in some way so that you go running back to your master.

What will 'they' come up with?

Who knows, but don't be surprised to see some major 'crisis' materialize in some way, somewhere in the world that 'they' claim is threatening our freedom. You only need to mention losing our freedom and everyone wets themselves as they run to their replacement parent for a diaper change (by the way, every time I go to the beach I keep looking for these invaders who are supposedly going to march in Washington and remove our freedom).

Get real and come through the looking glass. The true base function of government is as simple as it is sinister: control over the population.

I've been covering the most important debate of our time here recently: is inflation or deflation in our future?

Understand the realities here. If deflation takes hold and 'wins', all the trillions of dollars that have been thrown at this will have been wasted and if they think people are pissed now... well, they simply won't wait to see that happen.

They quite simply have to get the people and nosey (read:honest) reporters from Bloomberg (go Bloomberg!) to get off the Fed's back and go away. I'm amazed the journalists concerned haven't been 'coerced' into backing off as it is!

I've always known and said to you that 'cash for clunkers' and all the other costly, lame-brained schemes would do nothing (cash for clunkers did more damage to the used car industry than it did good to the new car industry), but it's like airport security; it's all for effect but has little effect.

And therefore, they will fail and this will come as a big shock to this administration and the technocrat neophytes crawling around it (I remind you, I'm not a Democrat or a Republican, I just want to be left alone by all of them). This will send stocks and virtually all assets DOWN... for a little.

Then, before a mob with pitchforks and torches could even get mobilized to march on Pennsylvania Avenue, the printing presses will be revved up in anger. And the dollar will go down in flames, while holders of gold will be covered.

What we're doing here is taking a step back from the charts and analysis and everything traders look at- we're looking at the big picture and the realities of how the world actually works.

China- the biggest creditor of the USA- is very aware of the scenario I've just outlined and the imminent destruction of the dollars it holds.

But what can they do?

If they were to dump these dollars, the dollar would be so badly hurt they would be hurting themselves as they sold- the quantities are just too large.

Likewise, America knows they can't print so much money that China gets too nervous.

So we've got this stand-off going on now...

You know those Spaghetti Westerns where a gunfight was imminent, each of the cowboys looking at the others, waiting for one person to make a move, inching their trigger-finger closer and closer to the gun, slow enough that the others wouldn't react quickly?

Remember? How cool was Clint Eastwood in those??

Anyway, that's what we have now with all world powers pretty much. America prints a little bit more. China diversifies away from dollars a little more. Other countries are playing similar games. Did you know that Central Banks have now become net BUYERS of gold whereas they've almost always been SELLERS?

Inch by inch, those fingers are moving closing to the trigger.

What should you do about it?

There's nothing you can do but be prepared and divorce this nonsense from the TV that says stocks will always go up and start to understand that you can make money from stocks crashing too! Worried about your real estate? If you bought shares in SRS you'd make money if/when real estate crashes so you're covered.

Oh, if you wanted to do something else, you could join the campaign for truth by forwarding this newsletter to anyone you know!

Until next time,

Mark Patricks

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