(Some of You May Recognize where I was this Weekend…)
______________________
All is well at last, the Kabuki Theater entertainment has ended and we can all expect bright sunshine and free cherry-bomb popsicles for the remainder of the summer!

Or not?

It’s hard for me to see this as anything but a temporary positive, as it looks to be another boot of the increasingly cumbersome can “down the road,” once again.    Some of you may have noted that the plan calls for some $2.2 trillion in spending cuts over the next decade.  That may sound like a lot, but one must look at the way Washington politicians (and their scoring body, the Congressional Budget Office [“CBO”] ) define “cuts” before we can analyze that number.   Unlike you and me, who “cut” our own budgets by reducing spending, Washington defines a “reduction in the planned growth of spending” as a “cut.”  What does that mean in practical terms?

Let me give you an example to illustrate:

Some of you may recall my comment the other day on Fly’s blog that if Washington decided today to merely freeze current spending at 2011 budget levels over the next ten years, that would be defined by the CBO as a $9.9 Trillion “cut” in spending over that period.  Why?  Because the CBO looks at current Congressional spending plans like a layman might a five or ten year lease rate– they build regular increases into spending over the specified period.   In other words, the thought that a budget might NOT increase is almost unheard of in Washington.

In fact, it’s so unheard of, that the very “cuts” they are bandying about today are merely decreases in spending growth, not real “cuts” at all.  And since we can’t even afford spending at current levels, this means the “deal” brokered today over much jawboning and posturing doesn’t mean “jack all” with regard to actual deficit reduction, and it means absolutely squatola with regard to the overall burgeoning debt position of the United States Government.

Today, Congress is patting itself on the back for putting a finger in the dike like the famous Dutch boy of legend, but they are ignoring the gaping chasm appearing in the seawall 50 meters to the right.

Combine these last weeks’ complete waste of time in addressing the ongoing debt problems with the continuing reality of the Obama Recession, neatly laid out by the U.S. Commerce Department’s Bureau of Economic Analysis (“BEA”) just last Friday in a report stating that last quarter’s anemic annualized GDP growth rates of 1.92% had to be revised to an even more atrocious 0.36% annualized rate, and I’d say that we are deep in the crapper here, folks.

Leave the ongoing unemployment woes aside, the fact is that we were able to escape the consequences of our debt profligacy in the past by growing our way out of the problem.   As the above paragraph states, that ain’t happening here.  What’s more, if the Obama Administration continues with it’s plans to foist  Obamacare on lower value-added employee bases (read: “unskilled work forces”) and also continues with it’s heavy handed regulatory and “green” initiatives, unemployment is going to get worse before it gets better.

With these set of parameters, what choice, really, does Bernanke have, but to whip the printing presses into a frenzy to stave off Depression Era deflation?  And for how much longer does that strategy work in conjunction with our hemorrhaging debt problem?

When does the child (likely a Chinese child) finally cry out: “Look! The Emperor is not wearing any clothes?”

Let’s see what happens tomorrow, but I continue to like TBT, unless some madness grips the bond markets.  Gold and silver may take a hit here, on the “all is well” euphoria, and maybe even in the double whammy when everything starts selling off later tomorrow or this week.  I actually bot some NUGT and DGP on Friday, thinking the veil will be dropped a little bit on the Emperor when this deal gets done.   If I’m wrong, I’ll dump that extra, post-haste.

Oh, and I’m keeping GSVC, because the Fly is never wrong over the long term.

______________

 

Comments »

____________________

For the “panicky types” who have perhaps been taking their eye of the long term ball:

Yeah, we might see a little dollar rebound action here, but that’s what happens when you hit short term support.  There’s still a pretty strong indication that those ALL TIME lows will come a calling again.  What manner of specie would you like to be invested in at that point?

Be wise.

__________________________

 

Comments »

Gettin’ Back To Lawn Guyland Form, Ovah Heah

_______________________

This is going to be quick because I’m not sure how long this modem is going to hold out.

My apologies, but in my past forays to “Summer Noo Yawk” I’ve never had any trouble getting on line via the wireless.  This time around, however, we are having “modem troubles” (the wireless network is fine, it’s the ‘net access which keeps blinking off).  Yesterday, I was able to make one brief comment about Le Monsieur’s cawfee troubles and then I was unable to get back on the rest of the day.

I am going to cross my fingers and hope that this transmission gets through.

With regard to today’s title, my point is, I often seem to do better in my portfolio when I am away from my home.  I can’t explain it, and perhaps it’s all just coincidental, but it seems like whenever I’m out and about, I have special market guardian angels stamping down the price of the dollar, or boosting the price of the precious metal markets for one reason or another.  I continue to believe that this Kabuki Theater debt ceiling deal means nothing at the moment, because the world’s bond traders see it for the political sham it is.

They also see Ben Bernanke running the printing presses like mad, which is why the dollar keeps dropping like Emma Stone.  I have little doubt that we’ll see a drop to the old “Sub $73 lows” on the dollar index and quite possible will see new lows before the false debt ceiling dance is concluded. I hope you held onto your DGP and your other mining assets, particularly RGLD, SLW and ANV.

For those who are confused about this political dance — I remind you, the debt ceiling itself does not matter, it’s the resolution of the debt debate that matters.  Bond traders may not care about an artificial ceiling argument, but they do care about the U.S. attending to an out of control debt situation.   The 30-year bubble in Treasuries could come to an eventful end here if the world decides our sovereign credit is no longer creditable.   You might want to look into TBT as an alternate in that case.

Best to you.

_____________________

Comments »

[youtube:http://www.youtube.com/watch?v=jQcNiD0Z3MU&feature=related 450 300]

What More Apt Nirvana for an old Depeche Mode fan than to Find this Gem?

_________________________________

So we did the Twilight Puffin Cruise tonight, and we got that behind us.  The good news is, it appears I no longer get seasick.  I know this because in order to get out to said “Puffin Island” — which is not only replete with aforesaid funny looking black and white and orange birds, but also terns, laughing gulls, seals and all other manner of remote oceanic fauna AND U.S. Oceanographic Institute equipment– we had to brave 12 foot swells that would have set Captain Nemo himself hurling over the gunwhales.

But I didn’t puke, much to my wife’s amazement, and later, suspicion.  You see, I’d always refused to participate on such things as sea cruises due to my notoriously bad stomach which was particularly sensitive to oceanic rolling.  I’ve stuck to my guns on that ever since we met, and it’s worked.   To my chagrin and embarrassment, however, I didn’t even get slightly green in the gills tonight.   Perhaps it was the brisk Maine sea air?  Maybe it’s been the myriad plane flights I’ve taken since I was a late teen (the last time I braved a fishing boat off of Long Island, and puked my guts out)?  I just don’t know.

I’m just hoping this doesn’t mean I have to start taking hideous sea cruises, trapped aboard a behemoth white bathtub with sweaty obese people I’d rather not meet.  Maybe I should have fake-puked?

________________________

I was away most of the day, so I didn’t see much market action.  It seems it didn’t matter, as my port ended up over 1.5% in the black, again.  It’s like these damn PM’s won’t take a rest.  It’s starting to get consternating, actually.   So for some respite, I added today to  TC (Thompson Creek), which has started to diversify into precious metals, but still has a large concentration in molybdenum, which I like for the long cycle.  I now have officially a shitte tonne of that name again after having sold it down egregiously in the mid teens.

I also added to le Monsieur’s current flavor of the month, social net venture capital investor GSVC. Note: this is an “outside the box” investment for me, and I count it in the same diversified category as my much more illiquid private venture capital investments.   In that regard, I would say that if you are not a high net worth investor (with liquid investable assets of one million or more), I would stay away from this play.  Given that this advice will fall on deaf ears for most of the cowboys that attend this site, I would at least implore that you play this one small.  I am fully aware that I could lose 50% of this play in the blink of an  eye.  You should be prepared for that as well, or leave off completely.

Best to you all from swimmable Maine.

_________________

Comments »

_________________________

As I sit here inside my famous Maine homestead, on the end of a sea-bounded rocky egg surrounded by pines, raccoons, osprey, snowy egret, billions of tonnes of mesomorphic and granitic stone, and sluggish black mosquitoes as big as your head, know that I’m thinking of you all fondly.

Today I kayaked all the way out to a remote island in the middle of the bay with my two older sons and a cousin of theirs.  I was extremely proud to see them make it on what was a more arduous journey than we first conceived.  It sort of makes one feel all the tonnes and tonnes of extraneous food they are now consuming is going to some good use in the gradual addition of competent sinew and bone.  Be advised, however, the grocery bill on vacation, fueled by noshing and boozing adults and teenage boys exposed to the brisk northern air can look like the tally for a small air force base under battle ready conditions.

And that’s not even counting the “going out to dinner” tabs.   I think I am going to insist on summer jobs from here on out.

Don’t expect much from me this week, churlish churls.  I’ll  not be like the Monsieur le Fly, regaling you with tales of Amish cow-tipping and such.  No, you’ll be lucky to get the occasional report these next two weeks.  I don’t expect to be doing much in the market save banquing coyne (sic), as it seems the PM run is going to continue whether I’m in front of my screen or not.

I’ve given you several names over the last couple of weeks, and I think the small ones will provide much bang for the buck (AAU, BAA, CGR and BRD particularly).   There are a couple that I will be watching very closely, however, as their longer term chart patterns are appealing to me.  Let’s start with AUQ, which I haven’t spoken much about:

I think there will be some pullbacks in the weeks ahead and I think these are your best bets, long term, on some kind of a retrenchment.  AUQ has just had an awesome consolidation period.   So has has the crazy Japanese Man, Yamana (AUY), which may have the biggest saucer pattern of the PM Renaissance Era.  Tell me you don’t see something happening here?

 

And it’s not like AUY’s chart’s indications couldn’t be any clearer…  in fact, I think in the end, you will see AUY do what RGLD is doing right now as we speak.  Do you own the Grandmama of them all?   If not, it’s not for lack of my nagging….

Be well, and don’t let the big ass black mosquitoes bite.

____________________

 

 

 

 

 

Comments »

Have to Prepare the 5-year old…
_______________________

I’m apologizing in advance tonight because I am readying now for The Great Maine Vacance, and I haven’t the time to go into deep microanalysis of the political economy and the stock market tonight.

What’s more, I have no idea if our quaint little cottage will have internet or wi-fi coverage.  The only thing thus far confirmed present in the area are large mosquitoes, the occassional lost possum and women with hairy legs who would prefer you call them “Frank.”   (Not really, Maine’s not like Vermont… yet).

This could be my last missive for a while, so I will leave you with a doozy pick.   I expect the PM  pullback I’ve been talking about is here, and we’ll see some nice entry points in the next couple of days.  Just scroll back a couple of days and check the charts for a number of optimal entries which may have seemed unachievable this week, but which may approach your wheelhouse soon.

My doozy pick is NUGT, the Double Gold Miner ETF.   That’s right, if you feel you haven’t been getting enough “action” from jumping the Snake River Canyon with your Big Wheel,  then this is the play for you.   That’s right — extreme caution is warranted (like w. AGQ):

Thank you all, and I hope to speak to you again soon.

 

_______________________________

 

Comments »