Silent Service Method

I agree about the parabolic move on a lot of things. But the truth of the matter is that the move in commodities has a long way to go - in the big scheme of things. Could gold fall $200 an ounce? Certainly. But it would still be in an uptrend.

When I mentioned these things I was thinking more or less of the next decade.....more like investment opinions, not trading ones....if that makes any sense.

The ultimate devaluation of the dollar would be against gold - maybe thats the Fed's game plan!

http://kingworldnews.com/kingworldne..._Rickards.html

Hey Low,

Pointing out the issues on everyone's minds here I think. For what it's worth this is my general take on these topics.

The Fed is trying to kill the dollar both to stimulate the economy domestically - the act of trying to lower real interest rates substantially enough to make borrowing for investment and housing purchases, so cheap that people's psyche changes. I think at some point though they are just going to have to let the rates rise and those who can really afford a house own one and the rest take 3-5 years to get themselves back into a position to satisfy lending eligibility requirements. Until then they will need to rent a home and to those who say "but hang on there has to be owners in order to rent the houses" - if the market is allowed to correct properly to find real housing values, they will be purchased. A 1M house may go for 100K but that is what it's going to take to get people's confidence back. Furthermore the loan eligibility requirements for a 100K loan opens the door to a lot more people! Problem in washington is that this means the banks and the US Gov are going to have to realise som pretty spectacular losses. One of the other reasons they want it low is to reduce the US' enormous debt burden in trade weighted terms.

Putting off the speech labeling them a manipulator was part of a bluff tactic in my opinion and certainly got the CNY trading at it's highest levels against the dollar in a long time. Negotiating with China is a different game and maybe this is the first time the Tttttttimmmay is getting a handle on this issue.

Furthermore if they had done this before the G20 meeting then that meeting would have been a waste of time and become a forum to discuss a trade war rather than trying to address the issue that will likely cause one.

On the USD strengthening, I think we can't mistake Friday's move for much more than a release of the very overstretched bullish positioning combined with everyone in the USofA deleveraging their positions into Friday evening before the new leverage rules take effect on Monday. Many things only just reached they 38.2% fib retracements of their longer term moves up which signals a buying opportunity on sustained moves back above these levels. Even those that hit their 50% retracements didn't close markedly below leaving the door open for further gains ahead.

A lot of the money flowing into the commodities at the moment and everything anti dollar appears to be resulting from the huge speculative positions in the hyper-inflationary trade. The problem is that the real hyper inflation assuming it occurs is still out in 2013-2015 when the US can finally not afford to service its debt. The market appears intent on trying to force the US Gov's hand on inflation by pushing up the short term prices of especially the agricultural commodities however we can't afford to read too much into this given the recent weather issues plaguing crops. Russian fires in wheat, floods raping china's corn, pakistan being submerged and now columbia coming out saying some fungus may put their latest crop of coffee over a barrel. Soft commodities in my experience often take the lift up in price however 3-4 months of good weather and they just jump out the window. There is no substitute for real demand and as soon as storage vessels are full again they will produce a better long term buying opportunity. Oil is a perfect example of this along with Nat Gas. Should have flown higher as they have previously but the demand just isn't there.

I am not a hyper inflationist either Low however I do subscribe to Chris' mindset that these stores of value are going to become more important in the future to a solid investment portfolio. In reality the ability to simply hold long positions in food and water would go a long way in my opinion to maintaining and growing your net wealth.

While I am not a hyper inflationist I do think that the methods being used in teh US at the moment trying to artificially maintain house prices is going to be the cause of much greater issues in the future. Someone needs to realise this. How no one has noticed that all of Europe are in the streets over the austerity measures yet life goes on with the printing presses at the Fed has me in disbelief. Some time someone has to take responsibility for this loss of wealth and actually apply the writedown to their balance sheet.

But as no one wants to do it then the best way to get around it is to devalue the losses via the USD.

Enjoy your weekend mate.

I appreciate all the replies

4x is correct on so many issues it's not funny.

The crux of the problem is the write downs. Nobody is taking losses, yet try to call up etrade and tell them that you are not prepared to take losses on your trades! ha!

It's this kind of rigging of the game that is going to result in much larger problems in the future. Unless of course we have seen our last financial meltdown.

Here's another thread detailing the mortgage industries most recent problems:

http://www.forexfactory.com/showthread.php?t=261331

Absolutely magnificent article!

One word: Wow

Funny thing is, wall street can buy SKF just like anybody else, and they know the condition of their own books.

Thanks for posting that article. That is actually a story that's starting to pick up a little traction. Let's not kid ourselves though - DC will find a way to protect their masters.

Speaking of that article.....this came in my email box over the weekend.....John Mauldin, good stuff. He offers his newsletter for free, I recommend it highly!

Well, here goes:

Update on the CMN trade from last week. It looks like it is going to behave.

great stuff clock thanks

No worries, and the best thing about his newsletter, beyond being free, is that it will often contain other people's stuff that normally costs a small fortune.

Did SPY just flash crash or do I have a bad tick? My esignal and yahoo both say it dropped 10% in the last minute of trading.

Have not seen a report on it.

The only thing I can seen is Tttt....tttt..tttttimmmmaay Geithner is speaking about how the US will not devlaue the dollar, how China's currency is undervalued and all manner of other dross that on face value sounds interesting but on a check from the doctor it has been confirmed that he is indeed a unic.

They just revised the ticks on both esignal and Yahoo.

I think something just got covered up, or there was a universal bad tick. It very clearly dumped 10% in the last minute of trading. Then immediately after close, it went back up 11%.

This was all PRIOR to APPL release, so that cannot be it. I'll be waiting to see a report on this. I doubt very much that both esignal and yahoo got it wrong, unless they are somehow linked.

Someone find out what Samer is doing......sounds like he shorted the market late today.

Decent set up. Hell, I even included the 200 day EMA! lol

Here's a quick video of Columbus keeper scoring over the weekend in Toronto. Kind of similar to Brad Friedel (another Columbus keeper) scoring for Blackburn when he was there.....the best part is that it was in injury time.