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Freedom by Friday Archives
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12-29-09
Where We Stand
I've been asked to
clarify a few things and this will
serve as a good 2008 review/2009
best-guess estimate. Remember: these
are only best-guesses. Nobody could
predict Madoff with any certainty so
there are always wildcards out
there. These events I believe are
relatively certain to occur, the
tricky part is putting timelines to
them. Plus, if and when the FACTS
change, so do these guesses- and the
facts are changing daily...
Stocks. I'm not buying
stocks at this point as I believe
more bad news is due in 2009 even
though we may see occasional rallies
to tempt us back in. As this
happens, the good will fall with the
bad and will ultimately present
brilliant opportunities. Stay tuned.
Gold. Gold is the only
currency according to the
Constitution. You don't so much buy
gold as a profit trade. You don't
keep looking at the daily price and
look for when to 'get out' once
you've bought. And contrary to
popular belief, gold is not
purchased as a safe haven (although
it is). Gold is a defense against
government mischief and blatant
stupidity. More specifically, a
hedge against inflation specifically
caused by the weakening and
destruction of paper (fiat)
currencies. Gold lets you sleep at
night.
2009 best guess: gold
flounders/drops first half of 2009
then soars later in the year. I
won't be surprised to see the price
double within 12-18 months.
When many people I speak
to hear about gold, their eyes glaze
over. It seems beyond them. It feels
dark and risky to them. Even
subversive. What a great job
governments have done of
brainwashing people.
Don't forget though,
governments don't just mint gold,
they also hold stockpiles of it. The
hype they band about of how gold is
pointless isn't backed up by their
actions...
Responding to growing
concern about the quality of the
Federal Reserve System's assets,
former Federal Reserve Governor Lyle
Gramley told reporters last week
that "You have to reckon with the
fact that one of the Fed's assets is
gold certificates, which are priced,
as I remember, at US$42 an ounce,
and if we were to price them at
market prices, the Fed's leverage
would look a lot less than it is
now."
The Fed has THOUSANDS of
tonnes of gold.
"But gold doesn't pay you any
interest!"
Neither do Treasury
Bills really and yet the whole world
and their dog have flooded into
them. It's starting to smell like a
bubble. Though it may have further
to go, this, like all bubbles will
probably implode. What will cause
this is unknown, but it will have to
do with an exodus over fears about
the dollar devaluing or a renewed
appetite for risk. Treasury bills
can be 'shorted' (making money by it
falling) through selling a fund like
the iShares Lehman 20+ (ticker code:
TLT). The dollar is weakening- you
simply CANNOT have a weak dollar and
strong Treasury Bills- it doesn't
compute and something must give.
Conventional wisdom says
cash is safe. That WAS the case when
cash (fiat paper currency) was
backed by gold, but now it isn't.
Ask anyone who lived in Germany in
the thirties if cash is safe (they
would burn cash instead of coal for
warmth it became so worthless), or
for that matter, ask the population
of Iceland TODAY!
You can't live by old
rules in a New Order.
Looking ahead, you
simply MUST get good information and
stay ahead of the curve. If recent
events haven't been enough to
convince you, you can't trust Wall
Street and the government.
In this climate, it's
good to hold something tangible.
Something you know will always be in
demand, can't be manipulated and
can't run off with your money.
That's why I like commodities;
wheat, gold, silver, oil.
There's talk these days
about how the commodities boom has
ended. If you hear such broad
statements as this, you're being
exposed to a moron. Why? Because
commodities are a basket of things.
Cocoa is a commodity and it just hit
a 23 year high! So WHICH commodities
are you talking about? And longer
term of course, all commodities
should rise in value. By the way,
the cocoa rise is just about
overdone in my view and you can cash
in as it drops in 2009 using
options.
Your 2009 Gold Mine?
Let's get real about making money
and home business opportunities.
To make BIG money in any business
you need one of two things:
1. An original idea.
Or
2. A revolutionary product.
Why would anyone give you an
original idea unless they stood to
benefit by sharing it with you?
Let's get real here.
And the truth about a
revolutionary product is those
opportunities hardly ever present
themselves. A truly revolutionary
product is the proverbial 'lucky
break' we all wait for!
Well, your 'lucky break' has just
fallen on your lap!
If you think I'm kidding I'm not!
I am as serious as a heart attack
and I will show you how you can get
into this business for FREE!
For full details please visit:
http://lopsolutions.infusionsoft.com/go/col/LOP/col
Who's the next Madoff??
I sense a trap.
Investing is rarely an easy task.
What often seems the 'obvious'
course of events is proven
otherwise. The market is perverse.
"When everybody is
thinking the same thing, nobody is
thinking."
And the markets like to
enforce this old adage regularly by
punishing herd behavior.
So with that in mind,
what's the herd thinking? Simply
this...
"Deflation is obvious.
Falling prices are everywhere
including asset destruction. In a
deflationary environment, cash is
king, so I'll stick my money in
government bonds (Treasury Bills).
However, the government will no
doubt win their war on deflation by
bringing back inflation through the
printing of money. When that becomes
clear, I'll shift my money back to
equities or even gold."
That's what the herd is
doing and that's why Treasury bills
are in a bubble and yielding
virtually nothing.
So one has to wonder how
the herd will be punished,
especially when on the surface of
it, it's hard to argue with them
currently. The only way I can see
the herd being punished is that
inflation sneaks up on them too fast
(history shows this is often the
case) and they will be too late to
switch out of cash. Either that, or
the whole process takes so long they
forget about the inflation side of
the equation.
Or maybe somehow,
inflation is already under way and
they're plain wrong! Maybe we're mis-reading
the deflation signals. The price of
gold is often a good indicator or
deflation/inflation (it rises in
inflation and vice versa for
deflation) and gold has been edging
higher. The Treasury Bills (cash)
market says deflation and gold says
inflation. Someone is wrong. Someone
will win and someone will lose. When
reality presents itself, the
stampede from one to the other could
be epic.
My bet? Well, the media
are constantly telling us not to
fight the Fed and the Fed wants
inflation. History shows a
government can create inflation at
will. The timing and speed of this
event is the big question. Holders
of gold could expect some pain in
the short term but these would also
be buying opportunities for the
inevitable.
Uncertainty rules that's
for sure. Nobody knows who the next
Madoff will be and cash and gold
protect against that. Or do they...?
Maybe, just maybe, the
next Madoff is the Fed! Isn't paper
money printing a big Ponzi scheme??
At least Madoff came clean. The
Fed's scheme is way more insidious.
My 2009 financial goal
in a nutshell? Capital preservation.
Until next time,
Mark Patricks
Publisher.
P.S. I think it’s worth
stating something here regarding the
various products we recommend. The
core focus of The League of Power is
this completely UNBIASED and FREE
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