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I made good on my threats today, and took everything down to the 30% level on my personal accounts. 

I was up an average of almost 5% across a number of different portfolios and I finally said “enough is enough.”   I am keeping 30% invested, with the equal expectation that we could hit a precipitous downdraft in the precious metal sector at any time, just as we could shoot past $2,000 gold in an eye-blink.  

I care no more, as at this point risk avoidance has become very important to me.  If that means I miss the next $200 in gold on 70% of my portfolio, well so be it.   It’s very possible we could see a break past $50 in silver as well, and again, I’ll have no nonsense from any of you about it.   Really, I mean it.  Just shut up now.

And yes, that means I sold large chunks of AAU, AG, AUY, ANV, EGO, EXK, GDX, GDXJ, GG, MVG, NG, NGD, NXG, PAAS, RGLD, SIL and even beloved SLW.

And I blew out the rest of my NUGT as well.

And no, I am not abandoning the PM’s as a theme now, and won’t abandon them should they continue to skyrocket in flight to many more afternoon delights this late summer.   I am willing to wait for them, however, and to examine “other areas” whilst they frolic about like mad sturgeon on lady’s night at the Aquarium.

One of those “other areas” includes my old friend, Mr. Skiffles — SKF.  Along with his rebrobrate alchoholic brother, FAZ-tard, I believe Mr. Skiffles will be getting some nice exercise this second half of the year.  One of the reasons is the behavior of BAC, and now, most recently, the troubles of GS, and it’s Waspy rival MS.  

Another is the critical structural problems of Europe erupting again like plague boils on the carcass of its major banks.  This is a contagion that may yet again bolt across the Atlantic and may even explain the impolite selling vigor in some of our larger institutions.  Will the Fed be there to save their lying souls once again? 

Too big to fail, you say?   Maybe, but while “fail” might rhyme with “bail,” I wouldn’t be too sure equity holders won’t be left holding an empty bucket this time around.  Be warned, friends, storms approach.

Peace be upon you.

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Ah, alack and alas! The world is melting down again, and I think we can say we’ve entered into a bear phase, ovah heah, if not a full blow bear market.  I’m not going to show you the charts, as I haven’t annotated them, but we’ve got bear crosses on the major markets and the Transports — up to an including my beloved UPS are leading the way down.

Like in mid-2008, we are showing signs of a true Dow Theory bear episode, and who knows how long this one will take to exhaustion?  We’ll have to play it by careful ear as we did in 2008-09, when I was a painful two and one half weeks early in getting back in.

In the meantime, like a fine-toothed cyborg marinated in Gatorade, the price of gold (POG) continues to break to new highs despite everything else melting around it.  Silver, too, is being dragged along, if at a slower pace, which is driving our Gold:Silver ratio higher… to 45x at last count.  You may recall when silver got to 72x the POG during the last extremis… I don’t think gold will break that far away from silver again…. but if it does…

I am continuing to take this opportunity to either sell or hedge my miner positions here, as I think they are not eager to participate in what may be the last rally for gold for months.   This gives me pause, and it should you as well.

On the other hand, I continue to see setups (AUY, NGD) in the mining space, so I will endeavor to keep an open mind.  One thing I am assured of, however, is that I should be trimming my non-metal positions, no matter what happens in the PM sector.  The regular market has become a toxic swamp, and you are better off picking up limited short positions (like SKF that I bot today).

Stay alert, and I will try to do the same for you.

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It’s not like I don’t get little enough sleep as it is… No, Fly’s gotta start chucking cherry bombs over at his place, talking all kinds of pina colada-induced nonsense about voting for the Emperor again, despite his concerted attack on the American economic system and his attempt to “transform” us into Denmark in the middle of a mild recession that is getting less and less milder as we speak.

All because he thinks Rick Perry — 11 year governor of Texas and one-time Southern Democrat — is going to abolish the Fed?  Can he be serious?  No, I don’t think he is, either.

No, I’m blaming it on second-degree sunburn, and leaving off.  I don’t believe the Fly really wants to turn us into Europe… not with what’s going on over there right now, as their underfunded demographically-imploding welfare states dissolve into a puddle of ill-trained and ungrateful flash-mobs.   And really, what can you expect from a country whose National Health Service had 239 patients die from malnutrition last year?

Yes, you read that right… click on the article to read more about the glories of social democracy and state-based healthcare provision.   Obamacare, anyone?

It’s okay.  You made a mistake.  It hurts, and it’s embarrassing.  Hell, you’ve got to ditch all that blue and red block-printed poster-board and tee shirtage.  But don’t fret… there’s good news.

You’ll have a chance to right that wrong in 2012.  It’s not going to be the “perfect candidate.”  It never is.  Sometimes you have to choose the good over the perfect, and sometimes even the lesser of two evils.

In this case, the choice won’t be that difficult.  You’ve got a chance to undo some pretty significant damage.  I know you’ll do the right thing in the end.

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I remain stolid in my recent positions.  My hedges, such as they are, harden into calcified barnacles, neither sentient nor proud.  Their growth is de minimus, moving like the tides, if at all.

I’m not wholly convinced that the PM’s are quite dead or ready to roll over, so I guess I will wait for a sound.  In the meantime, I continue to winnow positions in other areas, moving to an almost wholly “cash and PM” portfolio, save for my ETF positions and the BWA, WNR and UPS I still own.

OpEx is a tough week.  Let us watch and wait for it to resolve itself. AUY continues to look fantastic, btw.

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I highly recommend what is just an incredible article in today’s Wall Street Journal by Lewis Lehrman called “The Nixon Shock Heard ‘Round the World.” The article recounts President Richard Nixon’s machinations in 1971, where he decided to go the wholly statist route of separating the dollar from the gold tether set in place during the Bretton Woods Conference of 1944, and at the same time impose wage and price controls on major portions of the U.S. economy — ostensibly to “battle inflation.”

As the article relates, by dint of his weaselly charm alone, Nixon somehow got his entire economic team– including Paul Volcker who later became Fed Chair under Carter and Reagan– to buy into this radical (and authoritarian) policy, which marked the true acceleration of the dollar’s decline to this day, as the graph included in the above-linked article illustrates:

 

It’s kind of incredible, but that was what passed for a “Republican” back in those days.   And as much crap as we give Jimmy Carter for continuing (and in some cases exacerbating) these policies in the following years, the progenitor was the “Republican” Nixon.  He destroyed the Bretton Wood’s Agreement, and our last tie to a stable currency, leading the U.S. into its first hard decline since the Great Depression.

So let’s give thanks to the true “progressives,” who worked within the Republican Party to return to the more classical liberal economic policies characterized by Murray Rothbard and Milton Friedman,  policies which emphasized non-statist and individual influences as the prime actors in an efficient economy, rather than those of the top-down centralized planning influences of John Kenneth Galbraith and the big government types who’d dominated since Woodrow Wilson and Franklin Roosevelt’s eras.

True, we’ve had a slip back in the last number of years, but it’s not like there has been no institutional learning.   Even though misguided and flawed bills like Obamacare are passed, no overt attempt to control mass wages and prices will likely every be attempted again by a President or Congress.

We must also, however, remain ever vigilant that such coarse moves are never bruited about — even in the worst of economic times.

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I sold nothing today, NOTHING.   Why?  Mostly because everything was up for the jump, and then I had meetings all day and just decided I’d wait for Tuesday morning to take my decision.   Besides, I’m hedged on most everything large from last week, so I’m not overtly concerned about “safety” at this point.

I will be in relatively early tomorrow and let you know what I’m doing.

Best to you all.

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Yes, I sold off or hedged quite a bit of my gold and silver exposure last week, though I still keep quite a few low-floaters for “venture capital” type opportunities.   Like as not I will trim down to the core this week.   My reasons for doing so are two-fold:

First, we saw gold hit a significant hurdle last week at $1820 or so without either silver or the miners really taking off.   We then saw gold drop more than $70 in scant days, taking it’s little sister silver along with it (far more precipitously, I might add).   Now both have stabilized, but I can’t help but think we’ve been riding this latest wave long enough and it’s time to step-off while there’s still some peanuts on the floor to take home to Mom.

Second, my gut is telling me the string is playing out, not only on our precious metal positions (albeit temporarily), but also on the market itself.

But not before a bit of a party.

As you may recall, I bot some ERX and some EDC last week and those have been doing fine.  I might add to some of those this week, depending on the reception we get tomorrow morning at around 11 am (my preferred “taste time.”)  I may even grab some TNA and QLD as well.

But be forewarned — I’m only grabbing ETF’s because they are easier to monitor with regard to swift moves  in the market, which I fully expect in these next few months.   Like as not, I will trim all extraneous non-ETF positions in the coming weeks, as the market continues to regain its health from the recent depredations.  That means even UPS and BWA will go — though they may go last.

Best to you all.

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[youtube:http://www.youtube.com/watch?v=a1iUKCFHWzg&NR=1 450 300]

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I finally broke down and watched my first Republican Presidential Primary Debate tonight.  It was still a struggle to pay attention, despite my “political animal” tendencies.  There were just too many flotsams and jetsams out there that needed to be weeded out to get the ball rolling a little quicker.  I assure you, I would take a paring knife to that list if I were the grand GOP Puzzlemaker, instead of just some mouthy guy spouting my opinions on a lightly regarded stock blog.

The two biggest losers tonight had to be former Minnesota Governor Tim Pawlenty and former U.S. Senator from Pennsylvania Rick Santorum.  Here’s the thing — could you even tell the two apart?  Yeah, I know Rick is the Catholic firebrand and Pawlenty is the cool laconic Lutheran (or whatever they are in Minnesota), but physically they are very comparable, and charisma-wise, well…. I find myself wondering how Pawlenty ever got elected in Minnesota in the first place.

Did his dad own a department store chain, too??

With those two nobodies yanked, the next to go has to be Newt Gingrich.  Smart, no question, but way too unlikeable.  His negatives have to be up there with Hillary Clinton, and its all reflective of the smug know-it-all defensiveness that characterized his every delivery tonight.   No, he’s gone, and please Lord, soon.

That leaves us with the ever entertaining pair of Ron Paul and Herman Cain, who, in a perfect world, would be named Benevolant Dictators of America, because you’re pretty damn sure neither of them would abuse the power.  That said, neither are really ready for prime time, even as both of them gave some of the best answers of the night.  I will never agree with Paul on a foreign policy basis, but I like his libertarian views on civil rights, etc.   Herman Cain is just a whip smart bidnessman and you know he’s honest to a tee — perhaps too honest to be in politics, unfortunately.

That Huntsman creep I don’t even countenance.  The guy worked for Obama for a couple of years and we’re supposed to hire him as Big O’s replacement?  I’m figuring that dude must have shitte tonnes o’ green to burn, because I haven’t seen that much of a no-chance candidacy since the terminally morose Ralph Nadar ran for the Greens.  Huntsman, you’re fired too.

That leaves us with the lovely Michele Bachman and der Mittster.  Michele is lovely to look at, and I really respect her convictions, but there’s something about her that seems a little too frozen.  Maybe it’s here eyelids?  I dunno, but it’s odd how she speaks at the tv’s like she’s reading from an invisible teleprompter or something.    I have to sadly conclude that if she weirds out a rock-ribbed conservative like me who supports much of her platform, she’s got less chance than even Sarah Palin in the general.

That leaves Mitt, whom, as you know, I’ve been cool on since he announced.   I want to like Mitt, because I have some friends who would lay down their life for the guy, and these are not idealistic schoolgirls, but experienced deal guys I’m talking about.  However, as you know, I just have a hard time getting around the whole Romneycare thing.  Well, after tonight’s performance, I began to thaw a little bit on old Willard Mitt.

I thought he gave some really nice answers on many of the business and fiscal questions, and I really got the sense that his calm confidence (contrasted against Santorum’s near-mania at times, for example) really are a nice fit for the current state of malaise in which we find ourselves enmired.

So, for now, I’m feeling like I could pull the trigger for Mitt.  But let’s see what Saturday brings, as I also have a soft spot in my heart for Texans and their way of doing things.  Perry could be the one, as well.

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As The PPT members already know, I dumped a bunch of silver and gold today, but not by any means a portion more than 25% of my horde.  The ones I saw as either ripe or annoying (IAG), I cut down first.   I ended up selling anywhere from 1/3 to 2/3rds of my stashes in AG, ANV, IAG, EXK and NGD.  I also got rid of all of the rest of my DGP and NUGT positions, just to take the leverage off.  I sold no SLW or RGLD, but I may get rid of some of that tomorrow.

In the meantime, gold has taken a little air out, and silver along with her, but nothing extraordinary has occurred yet.  I will be monitoring the situation through tomorrow afternoon and let you know what I’m thinking, if anything.

Best to you all.

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