What Better Explanation Do You Need?

For the Bubble that took down the Economy?

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I stayed in Silver and her miners  today because all of my charts are telling me we are still in the early stages of a liftoff in those miners.  The golds on the other hand are a tad more stretched.

As per my announcements in The PPT, I took some profits in DGP, NUGT, IAG and XG today as a result.  I still have plenty more, but wanted to build some cash for opportunities.

Best to you all.

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[youtube:http://www.youtube.com/watch?v=xm6PGh2fvTg 450 300]

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Listen to me very quietly and carefully — You need to be on your toes at all time and keep a cool head like Jimmy Dean in a meat locker because half of what’s going on is designed to scare you into a blue paralysis that will render you immobile, and thus, malleable.

The market thinks you’re putty, see?  That’s why we’ve got guys begging off, folding their tent, going to cash, putting that roll in a coffee can and burying it on the back 40, right next to the bomb shelter packed with MRE’s.  They say “no mas!”

I say “oversold.”   I say that some of the wilier tells in the mining industry — like ANV and CDE, NG, MVG, BRD, and yes, even beaten down old XRA all jumped ahead 3.5 to 6.5% today.   What’s more, they all stayed up even after the selloff in the precious metals themselves (gold and silver) later in the day.

This is my signal to hold fast and watch the market closely.   I still think this debt deal quails the dollar, either by lack of confidence in the foreign markets or by dint of Bernanke printing press (Jackson Hole Conference right around the corner).

So I’ll continue to bide my time here, beer and NUGT‘s  in hand, and wait and see what spooky stories the market brings us tomorrow…

All the best to you, my fearless ones.

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(Some of You May Recognize where I was this Weekend…)
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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.

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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.

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Gettin’ Back To Lawn Guyland Form, Ovah Heah

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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.

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[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?

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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?

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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.

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