Exchanging the Secret Handshake
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The guy on the right in the picture above is counting on the stupidity of his majority peasant populace to pull off one of the grandest day-time thefts in recent years — the 50% devaluation of his country’s currency by fiat Executive declaration. Like the crazed-with-power dictator in Woody Allen’s classic comedy Bananas who declared “All children… under the age of 16 years old.. are now…. 16 years old,” El Pizza Face above is “declaring” that every unit of currency (the “bolivar“) is worth one half of what it was worth yesterday… just “because.”   

What’s even funnier is he’s now saying that retailers cannot raise prices in response to this devaluation, upon pain of seizure.  How long do you think retail businesses can stay open charging 50% under cost of goods?   One wonders also how long even the economically illiterate majority of Venezuela will stand for such blatent skulduggery?   I’m guessing for about as long as the food stores hold out.

Meanwhile back here in this country, we’ve got that pesky Constitution getting in the way of any similar grand plans to immediately double the money supply.   But our leaders want to get in on the free-gov’t-money-for-votes-racket too,  so they’ve got to come up with more creative methodologies.  

Luckily, they’ve got a compliant Federal Reserve whose number one priority is saving themselves and the badly damaged fractional reserve banking system.   That means the Fed’s alleged “guiding missions” of maintaining low inflation and a high rate of employment take a back seat to the Darwinian imperative — “survival at all costs.”   This is good news for the dear leaders in Congress and the White House.

What’s more, our leaders have got the rest of the world using our currency as reserves.   That means, for this brief shining moment in history, our leaders can do what Hugo Chavez only wishes he could do — print fresh new bails of cash via deficit financing with little to no apparent consequence to our national economic status.

For now. 

But Mother Economics is even more of a caustic wit than Mother Nature, and much like these soi-disant world governors who are being served flaming slices of “Humble Baked Alaska” with these record-breaking cold temperatures, so too will our Congressional and Fed Capos reap multiple facial hatchetings to their long beards for this extended abuse of global trust.   The dollar may not halve in value over night like the Meatball’s Bolivar did, but it’s breaking down all the same.  

Today’s action has us back in the congestion zone again, which is a sticky swamp as of late.   This means good news for commodities and other real things as the clarion bell of inflation is being rung once again.   Answering the call is your one and only “Stock of the Year” pick Silver Wheaton Corp. (USA) [[SLW]] , now clearly BTFO’ing to new 52-week highs.   I like it on a pullback, as it has a reputation for filling gaps.

While [[GLD]] is moving up in a stately patrician manner, [[SLV]] and its turbocharged brother  [[AGQ]] are playing catch-up, and will likely out-perform in the near term.   Same holds true for the other precious non-gold varietals like [[PTM]] and the two platinum-palladium miners [[PAL]] (which is a rocket ship headed to the sun, Icharus-style) and Stillwater Mining Company [[SWC]] .

Don’t forget all the junior burritos I’ve given you in the past.   Allied Nevada Gold Corp. [[ANV]] , Eldorado Gold Corporation (USA) [[EGO]] and IAMGOLD Corporation (USA) [[IAG]] head the list, but the “Nth Factor” — NovaGold Resources Inc. (USA) [[NG]] , New Gold Inc. (USA) [[NGD]] and Northgate Minerals Corporation (USA) [[NXG]] are roaring too, along with Ivanhoe Mines Ltd. (USA) [[IVN]] , Rubicon Minerals Corp. (USA) [[RBY]] , Exeter Resource Corp. [[XRA]] and many others.   

If I had to pick another “launch to the sun” like Silver Wheaton Corp. (USA) [[SLW]] I think it would probably be [[EXK]] .   It reminds me of SLW in the old days.     Hold on to your capital people, they will try to appropriate it in multiple fashions going forward.  

Best to you all.

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Separated at Birth?
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… Yes, the Grinch hated Bulls-mas!  The whole Bulls-mas season!

Now please don’t ask why.  No one quite knows the reason…

It could be he thought taxes weren’t quite the right height.

It could be he thought capital profit a blight.

But I think the most likely reason of all.

May have been that his brain was two sizes too small.

But, whatever the reason, his brain or the taxes,

He stood there  Bulls-mas Eve,  grinding his axes.

Staring down from the Senate, with a dour Grinchy smirk,

He thought health care no more than a Congressman’s perk.

For he knew every Bool down in Boolville below,

Was busy now hoping his portfolio would grow.

“They’re accumulating growth stocks!” he snarled with a sneer.

“Tomorrow is Bulls-mas!  It’s practically here!”

Then he growled with his Grinch fingers nervously drumming,

“I MUST find some way to stop Bulls-mas from coming!”

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For,  tomorrow, he knew…

… All the Bools– old and teens,

Would wake bright and early.  They’d rush for their screens!

And then!  Oh the green!  Oh the Green! Green! Green! Greeeen!

That’s the one thing he hated!  The GREEN on their SCREEN!

And then they’d do something he liked least of all

Every Bool down in Bool-ville, the tall and the small,

Would stand close together, no matter their grading…

They’d stand side by side, and the Bools would start trading!

They’d buy!  And they’d buy!

And they’d BUY! BUY! BUY! BUY!

And the more the Grinch thought of these Bool- Bullmas-buys,

The more the Grinch thought, “I must spit in their eyes!”

“Why, since Reagan was Prez, I’ve put up with it now!

“I MUST stop this Bullmas from coming…. but HOW?”

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Then he thought up a bill!

A most awful bill!

THE GRINCH

THOUGHT UP A WONDERFULLY AWFUL BIG BILL!

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“I know just what to do!” the Grinch thought with a chortle.

“I’ll go after the services that make them all mortal!”

And he cackled with glee, his voice like a knife,

“Forget about taxes, they’ll owe me their LIFE!”

“All I need is some consensus…”

The Grinch looked around,

But since consensus is scarce there was none to be found.

Did that stop the old Grinch? No, the Grinch simply said,

“If I can’t find consensus, I’ll bribe one instead!”

So he called his girl Nan, and he picked up his cell,

And they bought off Ben Nelson…

  … and sent Healthcare to Hell!

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(to be continued?)

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Ignorance and Want: Forever Present
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Adam Smith is often acknowledged as the father of modern economics, and perhaps as often as the first champion of Free Market Capitalism.   What many don’t realize is that Smith was not an economist (the study did not even exist before his Wealth of Nations was published in 1776), but rather, a moral philosopher. 

This is important because Smith didn’t argue for freedom of the individual and in favor of the righteousness of mutually beneficial transactions unimpeded by the Sovereign (or, “the State”) because he thought that would be the best thing for business development (they didn’t really have that concept back then, either).   No, Smith proposed his system of equitable exchange between free men as a moral thesis — a necessary  evolution in late-Enlightenment thinking — that would make for a more equitable and civilized society.   Truly, Smith was far more about “The Golden Rule” here, than he was about “the gold.”

I posit that this misunderstanding of capitalism — especially by those who believe in the guiding hand of the Monarch (now, merely “the State“) over the Invisible Hand of the market — continues today.   Moreover, I’d posit further that the misunderstanding is one of basic definitions.   

Monarchists, Feudalists, Fascists, Socialists, and other government-first adherents tend to believe that the key to capitalism is physical capital associated with wealth — cash, land, equipment, etc.    In fact these are mere wasting assets, the by-product of capitalism, rather than its key ingredients.  They are nothing without the spark of human  ideation — the intellectual capital that drives all progress and increased standards of living.

For there is no arguing that innovation drives human progress, and it’s by-product in a free society is wealth.  It is no coincidence that those countries that respect and even seek to attract intellectual capital are among the wealthiest in the world.  

To provide an example, it’s no coincidence that health care has become one of our greatest economic pillars.   We are among the very few nations left that will invest directly in health care innovation, and, as a result, we are providing innovation for most of the world.   That creates an enormous market for U.S. health care entrepreneurs and venture capital investors, because they are in essence, innovating for a global market with very little competition outside our own borders. 

Sometimes I wish someone could sit down with the Congressional Delegation of  California — with their state’s enormous reputation for cutting edge innovation — and explain this paradigm to them, veeeerrrry slowly.  Perhaps then they would not be so quick to take a hatchet to the golden goose’s valuable neck.

Ah well.

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I wonder also that if our friends who favor a heavier hand of government could finally understand that it is people acting in freedom that make for a vibrant and successful  economy, and therefore, people are our most precious asset, would they continue to be such proponents for Malthusian population control? 

Would they, who purport to stand for the “little people,”  be so non-chalant about layering on increased taxes and regulations on the  idea-laden, but cash-light small business community?  

I am willing to give them the benefit of the doubt.  I am willing to believe it’s all just a matter of fundamental misunderstanding, and they “know not what they do.”

Let’s take on the responsibility then.  This holiday season, let’s do something truly for our fellow man.

Let’s pledge together to be the instrument of education  in our communities and our states.   

Only active participation can help turn a tide of creeping government that threatens to separate the country irreparably from its roots in individual freedom.   Let us rather return to those roots, by blowing the horn of innovation, progress, and freedom for all free men and women — and those seeking to be free.

Slante.

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(more…)

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Global Warming Emperors Witness Melt Down,  Fully-Clothed
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Wow, so this whole global warming meme really is a concentrated hood-wink after all.  Who would ever have thunk it?

I mean, what with International Socialism taking such a sharp stick in the tuchus since the fall of the Soviet Union and all, who would’ve thought those parties interested in heavily regulated authoritarian governance would’ve migrated to a different — if only slightly varied — alarmist message in order to bring forth a similar global regime?

Shoot-fire, it’s not like there was any money in it, right big Al?!  Or any other reason to contrive a bureaucratic-media alliance posing as science?

Take a damp sauna this week and step away from your trading post for a second to offer a short prayer of thanks to whatever Turkey-god unto which you may confer worship.  Thank that idol that this stuff is all starting to break forth, despite the media grandees so emotionally and cognitively invested in keeping this scandal silent.  Thank them also that it’s been broken before the awful “Cap & Trade” legislation passed in the Pelosi House this past summer has been imposed upon our barely ambulatory American economy.  

The faked data, the fudged models, the conspiring “climatologists” — it was all of a piece meant to throw great steel bands of punitive regulation on this economy, bands that would restrict your freedom and funnel funds from states that provided energy to those who used it (and consequently were hurting for cash),  while at the same time carving off a fat “vigorish” to the select captains of finance and government facile enough to “get their piece of the billions” in green economy rent seeking at Joe Six Pack’s expense.

Don’t get me wrong.  I don’t have a problem with bankers and financiers seeking to make a buck off a new economic paradigm, as long as it’s one legitimately established and beneficial to society, not parasitical and authoritarian in its intent as this anthropogenic global warming (AGW) hoax has so proven to be.

This thing smelled from the very beginning.   Now it’s grown ripe and broken open.   Be mindful and be wary of a concentrated group think that calls itself “science” but looks and sounds more like authoritarianism, especially since similar efforts are being put forth on behalf of health-care alarmism.   Responsibility is a heavy burden, but one we must take up as citizens and parents.

Bonus piece — The 128 year (and counting) Crisis of the Melting Polar Ice Caps.  (hat tip to Ed Driscoll).

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To-day, the road all runners come,
Shoulder-high we bring you home,
And set you at your threshold down,
Townsman of a stiller town.
— AE Housman (To an Athlete Dying Young)
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Our gratitude to you who stand and to you who stood for all of us when the call rang out will never be adequately — or even oft enough — expressed.

Nonetheless, we honor you and thank you every day for your service and sacrifice.

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Addenda: Happy 234 + one day, U.S. Marines.

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Stock post tomorrow…. liquidity still sloshing.
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Be-ware!  Be-ware! Beware-Beware-Beware!

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What makes a bear run nekkid onto the piazaa you ask?   The promise of honey, mayhap?

Mayhap, rabbit… mayhap.

But you simply must ask, if only for the sake of  civilized conversation — what honey is available, Mr. Silver Urso?

I mean, the traditional price ratio between gold and silver has been in the 40x area in our “modern era”  (i.e., “Post-Rooseveltian gold grab, 1933.” )

This evening, with gold at $1,108/oz. and silver at $17.39, that ratio stands at a hamster’s whisper below 64x.

For those scoring at home, that’s a 60% premium to the historical ratio.  

Ironically, it appears shorting [[GDX]] is a better roll of the dice than shorting [[SLV]]  here.   Why you’d be cracked enough to short either, however, is a question for those better schooled in psychiatry than myself.  

I vote “secret death wish.”

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On seeing the Silver Bears in the Piazza this morning, I loaded a bit more [[AGQ]] — 400 shs at $60.55, bringing us within 600 shares of my longer term goal of 4k total.    First target on SLV is $18.08 and then $19.13 and then to the old highs at $20.66.   

Silver Wheaton Corp. (USA) [[SLW]] broke to post-crash highs today, and will run into congestion at $15.00, so be nimble here.

Looks like [[GLD]] is comfortable staying over $106.50 at least for now.   Whether we continue to break out, or will consolidate some here, will depend on that line, I believe.

On non-PM related topics, Jacksonian Long Term Hold Monsanto Company [[MON]] had a BTFO on the revelation that more of their universe-changing IP is being rolled out earlier than expected.  

Odd, no?  

Get Frankenfoods or go eat a frankfurter, hippies! 

I sold half my $70 strike November MON calls that I bot on the Bollinger Band crash trade back in the high 60’s a week or so back, and am holding the rest to dispense with on a follow-up tomorrow.    Or not, if none materializes.  

Also, [[BIOS]] continues to btfo, despite my having sold half my position in the high 7.90’s.   I will continue to hold as a result of this continued move.

Good luck, piazza pizza eaters.

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UPDATE:  Some fun facts for the healthcare debate crowd, courtesy of The National Center for Policy Analysis.

Enjoy!

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