Damned Rookie Mistake (Have a Nugget Anyway)

Nuggetear

_________________

Aw geez, I just had an extremely clever and full of info blog post to make up for my long absence.  In it, I went over the weather conundrum, my summer exploits, the state of our miserable economy as guided by the clown show in Washington, etc. etc.

But like a dumbass, when I went to insert my graphic, I inadvertently went “away” from the site and lost the whole fucking caboose.  Goshdamnitalltohell. Fuck me.

My apologies, I’ll try to summarize.

One, I’ve been buying NUGT for five weeks to various painful degrees of success.

Two, the 120-month exponential moving average on the dollar ($USD for you Stockcharts buds) was breached for the first time in a decade in late 2002, leading to our glorious metals revolution.  Since then, the dollar has bumped but not pierced that line on a monthly basis FOUR TIMES since that initial drop, all of those time led to sad days upon the ascending attempt (the saddest effort ending the first time in February of 2009) and happy, glorious days upon the subsequent failures (remember March 2009 friends?), at least for we PM fans.

Three, the last attempt lasted THREE PLUS MONTHS, from March to June.  We are now enjoying another rapid descent.  If we turn back up again here, on the dollar, I can probably tell you the PM bull is dead.  If not, we are headed to Nirvana once again, sans the blown out brains of the lead singer, etc.

Here’s the thing, don’t buy NUGT tomorrow, as it will probably pull back on a test of $1350.  However, if we breach that level like “butter” with no pullback, be prepared to get aggressive.  In the meantime, we might get a present from SLW‘s “miss” tonight.  AG, EXK and SLW are nascent monsters once again.

All that said, you should also have TBT, as the bonds are beginning their own slow motion train wreck, courtesy of the Bernanke-Obama Hubris Nexus.

Be well.  I appreciate you all.

_______________________________________

 

 

 

Was it Over When the Germans Bombed Pearl Harbor?

________________________________

I don’t need to tell any of you who were paying attention about Friday’s crater job on the precious.  Coming about on the Friday before options expiration week, at at the end of a long and dreary down cycle, it certainly looked nicely timed to shake the trees loose of many golden and silver ducats.  Friday was a nice day to make that first physical purchase and tomorrow morning may be even better as a result of the follow through.

I’m holding on to what I’ve got for the almost inevitable mean reversion play here.  The precious miner bullish percentage index (“$BPGDM“) is at absolute ZERO.  The last time we hit zero on that scale was in December of ’08, at the very nadir of the financial meltdown.  What’s more the Hulbert gold sentiment rating is off the chart completely (yes, below -20, otherwise known as “uncharted territory.”)  We lost another $50 tonight before the rebound, and we could even see $1400 tomorrow.  Is this the time to give up the ghost?  No, it’s blood in the streets time.   You know what Mr. Rothschild said about the time to be looking to buy, right?  Consider that the Buying on Weakness number for GLD was its highest ever on Friday at $144 mm in block trades.  That’s the big boys out collecting.

The best bet right now is physical, and or waiting for the turn, with wariness and apt cunning.  Fly got some AG on Friday, and while he may have been a touch early, I think he’s got the right idea.  The fast flyers will rebound 20+% when this plunge is over.  I also like the fat dividend alpha males like AEM and NEM here… they too have been beaten down over-harshly.

Hang on, folks, we’ve been through these before.

Best to you all.

_______________________

 

Auditioning for the Sopranos

vito

__________________

…. the hard way!

Let me caveat what I am implying here by saying first that I fully expect the commodity price of gold to test the late 2011 lows of $1523, and perhaps even undercut them to really get the blood flowing.  I am prepared for that, as I realize the run to $1900 — much like the run to $49 in silver, was too far and too fast, even in a fiat printing, race to the bottom, currency bubble.  But with the $Gold:$HUI index approaching 2008 crisis highs, and the $Gold:$XAU index now reaching an unprecedented height, I am copacetic about holding what I have while becoming poised for a final shake out where I can harvest some of my favorite names once again.

Opportunities abound in high quality names, some of which offer dividends while one waits (I’ve already added AEM, as you know).  There’s no need to stretch on speculation, now, and look for any miners doing business outside the safe zones of Canada and the U.S. and Mexico for some silver plays.  RGLD at these prices is insane, and if you are worried about this pullback, please review that company’s past charts over the last ten years.  All of these stocks — yes, even the quality ones like SLW and AUY — have trod this rocky path before.   In my opinion, these, along with their underlying commodities, preferably held in part in the physical bullion, will help you weather the coming storm in collective currency crisis.

If however, you believe that Ben Bernanke can be the first Federal Reserve Chief to successfully inflate the economy out of a low growth, value inhibiting recession, then perhaps your trust in this new bull is warranted.  In my business, and in the entire economy, I see inflated prices for everything already, so the valuations of the stock market come as no surprise.   As we approach major all time highs in the SPX, I am increasingly skeptical that we can continue without a major correction, just as I was in late 2007-2008, when we saw similar overwrought behavior.  I may miss the final euphoric highs, as I did last time, but I will not end up like the Capo Vito, either.

To be sure, I am not telling you to buy these miners at this bloody juncture.  Even I am holding off for the turn, as I mentioned a few times over the last month.  But I would also counsel you not to short a bull, no matter how wounded.   Bulls are mighty, long lived beasts, and despite their weariness, can leave one singing soprano with little to no advance warning.

Best to you all.

___________________________________

Were You Patient?

MonoOcto
___________________________________________________

The Signs were out there, that’s for certain. They glow more balefully–frighteningly, perhaps – by the day.  Soon you will find that their light will transform into warmth, and voila! — you are out of the cold.  This week we saw the $HUI:$Gold ratio approach it’s late 2008 nadir, despite the lack of any similar shade of trouble in the SPY or any other major index for that matter.  For many who have been suffering through this mind searing mini-bear in the miners, it was only one more pencil in the vile jellies.  For me, it was the light at the end of the tunnel.

Adding reassurance were the hairshirt boys and the plungers.  The hairshirt boys talked about “$21 dollar silver” and gold “heading back to $1200″ this week.  More music to my ears.  Then the dear plungers.  Those who can always be counted on to ring the bell at the exact wrong time were actually starting to short stocks that had been pummelled for months now, quality be damned.   Again, the scent of ambrosia, the ply of relief. 

Can anyone predict the future?  Only in Tom Hanks movies involving haunted vending machines, my friend.  But there are time tested truths for all markets, and for the precious metal markets especially.   Perhaps the hardest and truest is that both the bulls and the bears will suprise the hell out of you in this space.  Such is the lot of a smaller capitalized, politically sensitive commodity group not exactly known for it’s GE-like management style.  But an ancillary truth resides in the recovery from both a bull and a bear… namely, the harder the band is pulled either up or down, the greater the snap back to the up or downside.

Recently we’ve seen near-unprecedented disintermediation between the price of the miners and their underlying commodity in both gold and silver.  Some of this is a result of input (cost) prices rising while commodity prices are remaining stagnant or falling off.  Some is the result of rational hedging, and some the result of anticipatory momentum trading.  It’s this last that has brought us to our most recent state, where one might say the blood in the streets approaches the door-level on our three-step brownstones.

But make no mistake, things are not going to be “different this time.”  We’ve seen this all before, and the results have been similarly spectacular.   We may have one more final “terrier shake” to throw the last remaining weak hands off the bus, but I have little doubt that the Fidelitys, the Blackrocks and the other large funds are right now gobbling up even more SLW and RGLD and AEM and AUY than they were last quarter.   And AG…. oh my yes, AG.

I expect one more pullback today and perhaps into early next week, but I will initiate buys in AEM at any price under $40, if I am so lucky.  Get yourself a dividend while you enjoy the rebound, why don’t you?  You can always use the extra beer money, no?

As for our friends in the smaller silver market, I would think next week the safer bet, but if we see some pullback today, I wouldn’t gainsay your taking some risk.  After all, for EXK to get back to a mere $7.00 (!!) is an almost 21% move from here.  EXK will be $10 before next Christmas, if my predictions weigh out properly.

Best to you all.  

 

 

A Considerable Sum on Silver, Please

first job

_______________________

Sorry I haven’t been around to keep company.  I’m being kept by many companies.   At first glance, if you look at my favorite universe, it seems like it’s hand holding time.  However, I’ve looked over my long term charts tonight and I can’t believe how cheap some of these miners are trading right now.  SLW has held up reasonably well, but AG and EXK are Christmas presents here.  Get them for your kids.  RGLD continues to take hits, but mein gott it’s tasty here.  I like AUY and even BAA, as well.

I held off the whole month of January, and did not spend any “year end funds.”  That changes tomorrow.  I’m getting more of “all of the above,” but will keep some dry powder for further Crazy Eddie liquidation sales.  Everyone is printing folks.  Every one is racing to the bottom.  If you think that will hurt the precious, you need to have a look at how much Blackrock and Fidelity own of RGLD, and how much they’ve accumulated recently.  If you think they are the dumb money, well… God bless.

Best to you all.

_________________

The Stand

soc

 

 

______________________

Happy New Year, we’ve got a lot of work to do.  It’s 2013, and individual liberty is in peril like it hasn’t been since the early 1930′s, and it’s up to thoughtful people to stand up for it, or see it perish from this land.

Ironically enough, the provenance of our problem is one of base economics.  Economics are simply the study or limited resources, which are what defines our world as much as much as the laws of physics.  Prior to the development of market capitalism, the laws of economics translated into a near zero-sum, Hobbesian nightmare where resources were either stolen or distributed by force, and what laws existed held constant only for the very elite protected classes.    The advances of the Mercantilism and the Enlightenment combined trade and innovation with the concept of a “rule of law,” which eventually gave rise to our modern manufacturing and service based economy.   The resulting system — characterized by the pursuit of profit through mutually agreeable exchange, protected by an agreed upon set of rules that define contracts and protect private property, has created the highest standards of living, in human history.  It is referred to today as the modern capitalist economy.

All of that has come into peril however, due to an obnoxious side effect of the modern economy… the welfare state.   In practical terms, the advent of the “progressive state” — more commonly termed “statism” — grew out of 19th century German social philosophy that married social engineering and bureaucracy, mostly in pursuit of a particularly Germanic “order” which was a concept quite foreign to the more libertarian precepts of the Anglosphere (especially in it’s North American precincts).   These philosophies found a friendly ear in the U.S. in both academic (which sought to improve) and governmental (which sought to control) circles.   As capitalism flowered, these philosophies (Marxism being only one of the more well known) found purchase, ironically, in the leisure classes endowed with a surfeit of time thanks to the capitalist system.

Such helpful souls are with us even today, and marked mainly by their interest in saving ourselves from ourselves, using their approved prescriptions.  You call them busybodies in a limited neighborhood setting, but given enough money and power, those over-interested folk can easily shift to full time totalitarians.  Congress is replete with them.  Their prescriptions, all engendered with the best intentions, tend not consider your individual rights, whether property or civil, being far more interested in the rights of the collective body.   In fact, these well intended chaps regard the Constitution that enshrines your individual rights as a hoary anachronism, no longer relevant for this brave new innovative world of progress.  After all, Thomas Jefferson never had the internet, now, did he?

  But it has been ever thus, wherein governments enjoined in greatest intention, dedicated to the greater glory of civilization, usually fall to ruin as a result of centralization, corruption, bureaucratic bloat, and in the end, lack of accountability.  We thought we had that tendency towards “the Fall” covered, when we put our country together in September of 1787.  We had checks and balances with regard to the “three legs of government,” and of course the mighty Bill of Rights, whose first two amendments guaranteed a check on the sovereign from the very roots of the citizenry.

But institutions are corrupted, and rights are overlooked, or worse, discarded.   When did the first Amendment only guarantee free speech rights to the established (corporate) press for instance?   And when did the second amendment become obsolete?  When did the Fifth Amendment become so corrupted that it justified government takings that would be distributed to “more suitable” private interests, rather than for specific public purposes? What has happened to the Ninth and Tenth amendments, and the fealty they paid to the States? Moreover, what has happened to our ability to preserve our monetary base — our very sovereignty?

I could go on all night, and I’ve been struggling, struggling for answers.  Right now I face a depressive realization, and yes,  it entails a cliff.  It’s not, however,  the silly “fiscal cliff” the warring homunculi of Congress currently battle for in their kabuki theater show.  It’s the cliff of the Constitution itself.  Have we sailed, finally, into a post-Constitutional America?   Where the same authoritarian statist bodies have used populism and demagoguery to establish totalitarian control in our once free land?

I know we will see for sure in 2013.  We will see if our hollowed out press has finally given up the ghost, and allowed themselves to become nothing more than organs of the State, banging the gong for whatever grasping, illegal policies the Administration feels it can get away with.  I expect Executive Orders by the handfuls.  This Executive is not one to wait on consensus for his plans to come to fruition.   We will see the true mettle of this country in the response these moves provoke.  But wherever you stand — even if it is with the current forces in power — I beg you to remain vigilant, and to plan well for your families.   Unintended consequences will abound, as they did in the 1930′s.   All we can do is prepare for continuing ill times.  God bless.

___________________________________

If you’ve read this far, you are probably deserving of my take on the precious metal markets.  I am still enthusiastically bullish, especially at these prices. I will only remain so if we drop 10% from here.  Many of you (trader types), will frown at that last, but I cannot be of more service than to give you what I am doing personally.  The Fed has opened the window to an eventual runaway inflation.  And they may believe that the sophisticated tools they are using to expand the money supply while retiring toxic debts will not rebound upon them because of their ability to shrink as quickly as expand.  What they do not take into account, however, is the amount of dollar-based credit outside their control, and outside their boundaries.  I am especially thinking of the dollars housed in sovereign banks as assets anchoring other poor balance sheets in countries in even worse shape than our own.

Fiat money can only be abused for so long until it begins losing its elastic properties.  Eventually, the confidence will be lost in the U.S. Wonder Machine… especially with four more years of sub 2% growth accompanied by trillion-plus deficits.   If you do not deign to go the riskier path of the miners (EXK, AG, GDX, SIL), then at least get yourself some physical coinage or bullion.  Hard assets are your only surcease here, your only stop gap.

Best to you all.

____________________________________

Damned Rookie Mistake (Have a Nugget Anyway)

Nuggetear

_________________

Aw geez, I just had an extremely clever and full of info blog post to make up for my long absence.  In it, I went over the weather conundrum, my summer exploits, the state of our miserable economy as guided by the clown show in Washington, etc. etc.

But like a dumbass, when I went to insert my graphic, I inadvertently went “away” from the site and lost the whole fucking caboose.  Goshdamnitalltohell. Fuck me.

My apologies, I’ll try to summarize.

One, I’ve been buying NUGT for five weeks to various painful degrees of success.

Two, the 120-month exponential moving average on the dollar ($USD for you Stockcharts buds) was breached for the first time in a decade in late 2002, leading to our glorious metals revolution.  Since then, the dollar has bumped but not pierced that line on a monthly basis FOUR TIMES since that initial drop, all of those time led to sad days upon the ascending attempt (the saddest effort ending the first time in February of 2009) and happy, glorious days upon the subsequent failures (remember March 2009 friends?), at least for we PM fans.

Three, the last attempt lasted THREE PLUS MONTHS, from March to June.  We are now enjoying another rapid descent.  If we turn back up again here, on the dollar, I can probably tell you the PM bull is dead.  If not, we are headed to Nirvana once again, sans the blown out brains of the lead singer, etc.

Here’s the thing, don’t buy NUGT tomorrow, as it will probably pull back on a test of $1350.  However, if we breach that level like “butter” with no pullback, be prepared to get aggressive.  In the meantime, we might get a present from SLW‘s “miss” tonight.  AG, EXK and SLW are nascent monsters once again.

All that said, you should also have TBT, as the bonds are beginning their own slow motion train wreck, courtesy of the Bernanke-Obama Hubris Nexus.

Be well.  I appreciate you all.

_______________________________________

 

 

 

Was it Over When the Germans Bombed Pearl Harbor?

________________________________

I don’t need to tell any of you who were paying attention about Friday’s crater job on the precious.  Coming about on the Friday before options expiration week, at at the end of a long and dreary down cycle, it certainly looked nicely timed to shake the trees loose of many golden and silver ducats.  Friday was a nice day to make that first physical purchase and tomorrow morning may be even better as a result of the follow through.

I’m holding on to what I’ve got for the almost inevitable mean reversion play here.  The precious miner bullish percentage index (“$BPGDM“) is at absolute ZERO.  The last time we hit zero on that scale was in December of ’08, at the very nadir of the financial meltdown.  What’s more the Hulbert gold sentiment rating is off the chart completely (yes, below -20, otherwise known as “uncharted territory.”)  We lost another $50 tonight before the rebound, and we could even see $1400 tomorrow.  Is this the time to give up the ghost?  No, it’s blood in the streets time.   You know what Mr. Rothschild said about the time to be looking to buy, right?  Consider that the Buying on Weakness number for GLD was its highest ever on Friday at $144 mm in block trades.  That’s the big boys out collecting.

The best bet right now is physical, and or waiting for the turn, with wariness and apt cunning.  Fly got some AG on Friday, and while he may have been a touch early, I think he’s got the right idea.  The fast flyers will rebound 20+% when this plunge is over.  I also like the fat dividend alpha males like AEM and NEM here… they too have been beaten down over-harshly.

Hang on, folks, we’ve been through these before.

Best to you all.

_______________________

 

Auditioning for the Sopranos

vito

__________________

…. the hard way!

Let me caveat what I am implying here by saying first that I fully expect the commodity price of gold to test the late 2011 lows of $1523, and perhaps even undercut them to really get the blood flowing.  I am prepared for that, as I realize the run to $1900 — much like the run to $49 in silver, was too far and too fast, even in a fiat printing, race to the bottom, currency bubble.  But with the $Gold:$HUI index approaching 2008 crisis highs, and the $Gold:$XAU index now reaching an unprecedented height, I am copacetic about holding what I have while becoming poised for a final shake out where I can harvest some of my favorite names once again.

Opportunities abound in high quality names, some of which offer dividends while one waits (I’ve already added AEM, as you know).  There’s no need to stretch on speculation, now, and look for any miners doing business outside the safe zones of Canada and the U.S. and Mexico for some silver plays.  RGLD at these prices is insane, and if you are worried about this pullback, please review that company’s past charts over the last ten years.  All of these stocks — yes, even the quality ones like SLW and AUY — have trod this rocky path before.   In my opinion, these, along with their underlying commodities, preferably held in part in the physical bullion, will help you weather the coming storm in collective currency crisis.

If however, you believe that Ben Bernanke can be the first Federal Reserve Chief to successfully inflate the economy out of a low growth, value inhibiting recession, then perhaps your trust in this new bull is warranted.  In my business, and in the entire economy, I see inflated prices for everything already, so the valuations of the stock market come as no surprise.   As we approach major all time highs in the SPX, I am increasingly skeptical that we can continue without a major correction, just as I was in late 2007-2008, when we saw similar overwrought behavior.  I may miss the final euphoric highs, as I did last time, but I will not end up like the Capo Vito, either.

To be sure, I am not telling you to buy these miners at this bloody juncture.  Even I am holding off for the turn, as I mentioned a few times over the last month.  But I would also counsel you not to short a bull, no matter how wounded.   Bulls are mighty, long lived beasts, and despite their weariness, can leave one singing soprano with little to no advance warning.

Best to you all.

___________________________________

Were You Patient?

MonoOcto
___________________________________________________

The Signs were out there, that’s for certain. They glow more balefully–frighteningly, perhaps – by the day.  Soon you will find that their light will transform into warmth, and voila! — you are out of the cold.  This week we saw the $HUI:$Gold ratio approach it’s late 2008 nadir, despite the lack of any similar shade of trouble in the SPY or any other major index for that matter.  For many who have been suffering through this mind searing mini-bear in the miners, it was only one more pencil in the vile jellies.  For me, it was the light at the end of the tunnel.

Adding reassurance were the hairshirt boys and the plungers.  The hairshirt boys talked about “$21 dollar silver” and gold “heading back to $1200″ this week.  More music to my ears.  Then the dear plungers.  Those who can always be counted on to ring the bell at the exact wrong time were actually starting to short stocks that had been pummelled for months now, quality be damned.   Again, the scent of ambrosia, the ply of relief. 

Can anyone predict the future?  Only in Tom Hanks movies involving haunted vending machines, my friend.  But there are time tested truths for all markets, and for the precious metal markets especially.   Perhaps the hardest and truest is that both the bulls and the bears will suprise the hell out of you in this space.  Such is the lot of a smaller capitalized, politically sensitive commodity group not exactly known for it’s GE-like management style.  But an ancillary truth resides in the recovery from both a bull and a bear… namely, the harder the band is pulled either up or down, the greater the snap back to the up or downside.

Recently we’ve seen near-unprecedented disintermediation between the price of the miners and their underlying commodity in both gold and silver.  Some of this is a result of input (cost) prices rising while commodity prices are remaining stagnant or falling off.  Some is the result of rational hedging, and some the result of anticipatory momentum trading.  It’s this last that has brought us to our most recent state, where one might say the blood in the streets approaches the door-level on our three-step brownstones.

But make no mistake, things are not going to be “different this time.”  We’ve seen this all before, and the results have been similarly spectacular.   We may have one more final “terrier shake” to throw the last remaining weak hands off the bus, but I have little doubt that the Fidelitys, the Blackrocks and the other large funds are right now gobbling up even more SLW and RGLD and AEM and AUY than they were last quarter.   And AG…. oh my yes, AG.

I expect one more pullback today and perhaps into early next week, but I will initiate buys in AEM at any price under $40, if I am so lucky.  Get yourself a dividend while you enjoy the rebound, why don’t you?  You can always use the extra beer money, no?

As for our friends in the smaller silver market, I would think next week the safer bet, but if we see some pullback today, I wouldn’t gainsay your taking some risk.  After all, for EXK to get back to a mere $7.00 (!!) is an almost 21% move from here.  EXK will be $10 before next Christmas, if my predictions weigh out properly.

Best to you all.  

 

 

A Considerable Sum on Silver, Please

first job

_______________________

Sorry I haven’t been around to keep company.  I’m being kept by many companies.   At first glance, if you look at my favorite universe, it seems like it’s hand holding time.  However, I’ve looked over my long term charts tonight and I can’t believe how cheap some of these miners are trading right now.  SLW has held up reasonably well, but AG and EXK are Christmas presents here.  Get them for your kids.  RGLD continues to take hits, but mein gott it’s tasty here.  I like AUY and even BAA, as well.

I held off the whole month of January, and did not spend any “year end funds.”  That changes tomorrow.  I’m getting more of “all of the above,” but will keep some dry powder for further Crazy Eddie liquidation sales.  Everyone is printing folks.  Every one is racing to the bottom.  If you think that will hurt the precious, you need to have a look at how much Blackrock and Fidelity own of RGLD, and how much they’ve accumulated recently.  If you think they are the dumb money, well… God bless.

Best to you all.

_________________

The Stand

soc

 

 

______________________

Happy New Year, we’ve got a lot of work to do.  It’s 2013, and individual liberty is in peril like it hasn’t been since the early 1930′s, and it’s up to thoughtful people to stand up for it, or see it perish from this land.

Ironically enough, the provenance of our problem is one of base economics.  Economics are simply the study or limited resources, which are what defines our world as much as much as the laws of physics.  Prior to the development of market capitalism, the laws of economics translated into a near zero-sum, Hobbesian nightmare where resources were either stolen or distributed by force, and what laws existed held constant only for the very elite protected classes.    The advances of the Mercantilism and the Enlightenment combined trade and innovation with the concept of a “rule of law,” which eventually gave rise to our modern manufacturing and service based economy.   The resulting system — characterized by the pursuit of profit through mutually agreeable exchange, protected by an agreed upon set of rules that define contracts and protect private property, has created the highest standards of living, in human history.  It is referred to today as the modern capitalist economy.

All of that has come into peril however, due to an obnoxious side effect of the modern economy… the welfare state.   In practical terms, the advent of the “progressive state” — more commonly termed “statism” — grew out of 19th century German social philosophy that married social engineering and bureaucracy, mostly in pursuit of a particularly Germanic “order” which was a concept quite foreign to the more libertarian precepts of the Anglosphere (especially in it’s North American precincts).   These philosophies found a friendly ear in the U.S. in both academic (which sought to improve) and governmental (which sought to control) circles.   As capitalism flowered, these philosophies (Marxism being only one of the more well known) found purchase, ironically, in the leisure classes endowed with a surfeit of time thanks to the capitalist system.

Such helpful souls are with us even today, and marked mainly by their interest in saving ourselves from ourselves, using their approved prescriptions.  You call them busybodies in a limited neighborhood setting, but given enough money and power, those over-interested folk can easily shift to full time totalitarians.  Congress is replete with them.  Their prescriptions, all engendered with the best intentions, tend not consider your individual rights, whether property or civil, being far more interested in the rights of the collective body.   In fact, these well intended chaps regard the Constitution that enshrines your individual rights as a hoary anachronism, no longer relevant for this brave new innovative world of progress.  After all, Thomas Jefferson never had the internet, now, did he?

  But it has been ever thus, wherein governments enjoined in greatest intention, dedicated to the greater glory of civilization, usually fall to ruin as a result of centralization, corruption, bureaucratic bloat, and in the end, lack of accountability.  We thought we had that tendency towards “the Fall” covered, when we put our country together in September of 1787.  We had checks and balances with regard to the “three legs of government,” and of course the mighty Bill of Rights, whose first two amendments guaranteed a check on the sovereign from the very roots of the citizenry.

But institutions are corrupted, and rights are overlooked, or worse, discarded.   When did the first Amendment only guarantee free speech rights to the established (corporate) press for instance?   And when did the second amendment become obsolete?  When did the Fifth Amendment become so corrupted that it justified government takings that would be distributed to “more suitable” private interests, rather than for specific public purposes? What has happened to the Ninth and Tenth amendments, and the fealty they paid to the States? Moreover, what has happened to our ability to preserve our monetary base — our very sovereignty?

I could go on all night, and I’ve been struggling, struggling for answers.  Right now I face a depressive realization, and yes,  it entails a cliff.  It’s not, however,  the silly “fiscal cliff” the warring homunculi of Congress currently battle for in their kabuki theater show.  It’s the cliff of the Constitution itself.  Have we sailed, finally, into a post-Constitutional America?   Where the same authoritarian statist bodies have used populism and demagoguery to establish totalitarian control in our once free land?

I know we will see for sure in 2013.  We will see if our hollowed out press has finally given up the ghost, and allowed themselves to become nothing more than organs of the State, banging the gong for whatever grasping, illegal policies the Administration feels it can get away with.  I expect Executive Orders by the handfuls.  This Executive is not one to wait on consensus for his plans to come to fruition.   We will see the true mettle of this country in the response these moves provoke.  But wherever you stand — even if it is with the current forces in power — I beg you to remain vigilant, and to plan well for your families.   Unintended consequences will abound, as they did in the 1930′s.   All we can do is prepare for continuing ill times.  God bless.

___________________________________

If you’ve read this far, you are probably deserving of my take on the precious metal markets.  I am still enthusiastically bullish, especially at these prices. I will only remain so if we drop 10% from here.  Many of you (trader types), will frown at that last, but I cannot be of more service than to give you what I am doing personally.  The Fed has opened the window to an eventual runaway inflation.  And they may believe that the sophisticated tools they are using to expand the money supply while retiring toxic debts will not rebound upon them because of their ability to shrink as quickly as expand.  What they do not take into account, however, is the amount of dollar-based credit outside their control, and outside their boundaries.  I am especially thinking of the dollars housed in sovereign banks as assets anchoring other poor balance sheets in countries in even worse shape than our own.

Fiat money can only be abused for so long until it begins losing its elastic properties.  Eventually, the confidence will be lost in the U.S. Wonder Machine… especially with four more years of sub 2% growth accompanied by trillion-plus deficits.   If you do not deign to go the riskier path of the miners (EXK, AG, GDX, SIL), then at least get yourself some physical coinage or bullion.  Hard assets are your only surcease here, your only stop gap.

Best to you all.

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