Breaking away for a second to remind you to pay attention here. We are headed into Santa Claus territory, and I don’t think it will be coincidental when we see the gold and silver elves coming out for their annual drunken bacchanal.
I am hoping that on Friday I will have moved a large amount of money from “here” unto “there,” and then will have some time to sport about with you, old time style, half-inebriated and full of fun. Until then, GDX, GDXJ, and yes, even NUGT will be attractive in the Christmas season. On the silver side, those of you who have cursed and gnashed your teeth about EXK can consider this the time to “make your bones,” or whatever other ethnic cliche you’d like to use. AG is still my favorite silver dog, and SLW and SIL my core recommendations for the noobs. That said, PAAS and MVG can be berry berry good to those of a speculative bent.
More speculative than any of those, however, is AAU and TC. If you have 2% of your portfolio that you reserve for dice throwing at 3 AM in a dirty alley laden with crack whores and vein poppers, then those are your available plays. Do not cry to me if you are blackjacked, but please remit 15% to the Salvation Army if you do bank coin.
Best to all of you, and hoping to spend many days of merry and bright with you in the latter part of this month…
I sit here and sip my newly distributed Pappy Van Winkle 15-year (rocks, a couple), and reflect on the consequences of today’s market shaking Presidential press conference. Despite the obsequiousness of the White House Press Corps, some important truths were uncovered, many of them centering around basic math and fundamental civics.
For one thing, the President is either being extremely forgetful, or dishonest about the makeup of our current deficits. As some of you may recall, Mr. Obama is quite fond of blaming our current fiscal deficit situation on either the “two wars” of Afghanistan and Iraq that he “inherited,” or “the Bush tax cuts” of 2003. Let’s leave aside the fact that federal revenues have risen considerably—as a result of tax cut driven growth– since the days prior to the Bush tax cuts. Let us also confirm (by Mr. Obama’s own declaration) that the war in Iraq is “over,” at least for now. That means that the “causes” Mr.Obama loves to blame for spiraling deficits are, save for a war in Afghanistan that he has escalated according to his own plan (see below), are not really material to the gargantuan deficits we are facing right now. So what is, then?
Well, some of you may recall the “emergency stimulus” that was signed into law in 2009. A great bill totaling $831 billion in hand-outs via allocated spending (most of which was distributed to states to keep their own governments running) and “targeted tax cuts” which usually took the form of some sort of credit for jumping through some gov’t preferred hoop.
Any “stimulus” spending is arguably a problem because it’s top-down gov’t allocated spending, considered mostly “one size fits all” for the citizenry, and by that standard alone grossly inefficient. The even greater problem with regard to such programs is that they raise the baseline spending in these categories permanently, unless specific cuts are made in those areas where spending was increased that first time. This is what is causing our budget deficits to balloon far past what we had seen in the allegedly horrible “Bush Years.”
As you can see, the problem clearly is not revenue, and it’s not even overseas spending (although Mr. Obama has seen fit to increase that spending too). The problem is domestic levels of spending that show few signs of abatement any time soon.
Today, the President suggested that an additional $1.6 trillion dollars in tax increases – levied wholly on the heads of the investing and producing citizens of the economy (otherwise known as “the evil rich”) – will help solve this crisis. But even allowing the Bush tax cuts to lapse will only produce another $75 billion a year. How is that going to help attack the deficit? Answer, it won’t at all, and what ’s more will likely become counterproductive as capital hides in inefficient and economically non-beneficial havens.
Fly’s tax attorney and others like him will be grinning wolfishly if this benighted “plan” comes to fruition, but only those spinners’ children will eat better, while the rest of us will have to contend with cold salt pork and beans as we continue to endure The Obama Winter.
The only answer is restructuring my friends, and that will entail some significant spending reductions and – yes! – entitlement reform. Barack Obama still has an opportunity here to salvage his legacy. If he can play “Nixon Goes To China” and pull off the hard work of entitlement reform, he will be forever after revered as a Sainted President. If he’d rather continue down the path to perdition and Obamacare folly, well….
At least Mr. Cain Thaler will be grinning.
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Many Bollinger Band Crash Trades were triggered in the PM segments this afternoon, and I believe I may partake in some rebound shooters (perhaps in GDX and GDXJ) to reap the reflexive bounce back due those names. I think SLW and SIL are also prime candidates and if I see a “wash and bounce” tomorrow, I may even grab some NUGT and or AGQ. We should be very close to done with this pain, however, so hang on at least, even if you don’t feel like trading.
I guess my jaw is just going to drop every day right into November 6th of this year. Yesterday, I stood agog as the U.S. National Media did not merely let slip their masques of “Objectivity” but tore them off completely in defense of their Dear Leader, The Obama. It was like we were back in the days of “Soviet Union,” when Pravda and Tass would not only mouth whatever “truths” the Soviet leadership would set them to, but also pro-actively attack dissidents of the regime in order to discredit them.
When our embassies in Egypt and Libya were attacked “coincidentally” on 9/11, and our Executive Branch Administration decided to respond with an apology instead of condemnation, I guess I wasn’t completely shocked when the MSM house organs (NY Times, Boston Globe, LA Times) buried the story well into their papers to clear room for important Romney/Ryan high school reportage. What was a shock, however, was watching the press go after Mitt Romney for – very appropriately, IMHO – condemning the wrong-headedness not only of the rioting Islamacists, but of the Obama Administration that was feeling their pain. Incredulously, I watched as the biggest media firms in the country went after Romney in a (now confirmed) coordinated attack like he was the guy who murdered our ambassador in Libya instead of being the only Presidential candidate to take time out of his day to remark upon it.
No, what was important to the press was that Romney was condemning the Obama Administration, and everyone knows that the Main Stream Media’s number one job is to advocate for the Democrat President, right?
Right?
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Meanwhile, on day four of “Jaw Dropper Week,” we hear from yet another uncompensated (well, sorta) member of the Committee Re-elect the President Again (CREEPA) — Mr. Ben Bernanke. Not two weeks after Mitt Romney all but said that Fed Chair Bernanke was likely selling pencils come this January, the Bearded Bandit decided to show just how far he’d go to keep his job.
It’s fucking mind-boggling, if you’ll excuse my French. Just stutteringly mad.
We are spitting in the face of people who hold our dollars world wide. We are saying, “See this? This hundred dollar bill? I wipe my arse with it! Have some!”
“Oh, yeah… and vote Barry so I can keep my job, eh? Thanks much.”
Anyone got a line on a wheel barrow factory I can invest in?
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As might be expected, gold (+2.11) and silver (+4.33) are screaming. More analysis of the traditionals tonight, but the ETFs are your best bet at the moment (GDX, GDXJ, SIL, GLD, SLV, even AGQ and NUGT). Go nuts, mind as well.
The above is satire, of course, but let’s not laugh too hard at the funny kiddies. In certain European states, the “path to success” is through the government bureaucracies. Is the U.S. approaching that level? Food for thought.
If you have not already, you should be trimming your silver and gold positions, or at least the leveraged ones. We’ve had nice move here, so let’s not get too greedy. I’m out of AGQ, NUGT and ERX as of this morning. I’ve also trimmed between 35-50% of the remainder of my largest positions.
Have a great Friday.
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Bonus Crony! This goes out to the speech stomping Jim H, (D- Croneyville).
Avast Mateys! It’s time to strike the main sail and deploy the twin outboard Mercuries, as Her Majesty’s Treasure Frigate, The H.M.S. Dollar-Dollar Bill, is taking on water and listing amidships! Now is out time to pounce, Jag-you-are (sic) – style.
As I type, the dollar has broken below the crucial $82.00 “line o’ death” it’s been flirting with this last month, and fighting against even as all the stochastics began to show divergences marking an imminent change. I think that change is here, and provided we finish the day below $82.00 (we are at $81.94 right now), I think we should be clear to fly until at least $80.70, which is the long term 50% fibonacci. I do believe we should bounce then, just in time for a little September flattening while the dollar gets ready for a test of the 38.2% fib line down below $79.00. That should coincide with some nice seasonality for the precious, which always seems to be great offerings for the Turkey Gods, come November.
As I mentioned yesterday, I pushed the risk pedal with some AGQ, as silver was moving first. However, I think today is gold’s catch up day, so if you want to add to your NUGT for a brief period, I wouldn’t gainsay that additional leverage. As always, I recommend small and cautious with these instruments. If you are seeking less “muss & fuss,” GDXJ is probably our most oversold ETF, as it got cranked the hardest in the recent “junior miner recession” this Spring. It’s relatively overbought in the near term, but nonetheless a good bet to test it’s 200-day EMA here ($23.40) before pulling back.
A more speculative play is AUQ, which got trounced recently on bad numbers, but appears to be forming an island bottom on the daily chart, and has almost a full dollar gap to fill north of here. Of course, the landscape is littered with these plays, and some of far higher quality. Keep an eye on the 200-day EMA of gold bull index $HUI for a near-term guide. It’s next resistance (top right of a daily cup) coincides with that 200-day mark, at about $465, and that should provide the near term stand by.
Happy near-term buccaneering to you all, me mateys!
Nothing more becalming than the fresh lyrics of the 15-year old English student, no? Well, to each his own. I thought that was good enough for publishing anyway, and I needed some becalming after the day my port endured, even with only 60% exposure. Almost all my high fliers got hit, but I think I see some relief in at least the near future as both the dollar and the miners ($HUI) run into key resistance and support levels.
First, the dollar, which this daily $USD chart shows has hit that resistance level again today and has backed up below $79.80 this evening. If it continues to fall, we should see a tradeable bounce.
Second is the $HUI weekly, which I showed last night as approaching the channel bottom. Well we hit that bottom and bounced this afternoon. If we stay in that channel and get a rise back up, we should be good for an extended period.
I bot some EXK at the close today and a large pot of TC as well. I might wade in for some AG and possible NUGT too if I think the bounce has legs. Best to you all.
