The Falling Dollar & Rising Gold !!! What you NEED to know for 2006

Don't know how I missed this.

I find the worlwide chess game currently going on in financial markets fascinating. I've authored a couple of the threads strangecraft is referring to. I've been discovering bits and pieces of the puzzle over the last couple of years and my understanding is growing.

It looks like you have intimate understanding strangecraft, what would it cost to share some of that understanding with an anonymous audience?

Anyway...

Originally posted by dr_strangecraft
I will say that this post contains one of the truths that enables me to make solid predictions of future market behavior year after year. But which sentence is it?

Originally posted by Where2Hide2006
With every NEW dollar that the FRB creates, the dollar in your pocket becomes less valuable. This is called inflation, and is a political tool used to make the populace feel like they are more wealthy...when in fact the value of money is just an illusion.

I'm betting it was that one.

Originally posted by smallpeeps
BUT if default does occur, what then?

The default occurred in 1971 when France tried to redeem paper dollar instruments for gold at the agreed-to price of $35USD per ounce. The US refused (defaulted) and took the dollar off of the gold standard.

The closing of the gold window was a watershed moment and 35 years of fun and games with fiat money began. Where it leads has been shown time and time again by history.

With everything going on geopolitically I think that what is going on economically and especially in the energy sector is important to understand. When world events are looked at from these points of view, I believe a clearer picture emerges of what is really going on and just what drives the engines of history.
.

edit:sp

[edit on 6/23/2006 by Gools]

Call me ignotant, stupid, lazy, whatever... with respect to my money, it's probably true. The simple fact for me, and I would guess many, many people, is that the subject of money and particularly investing, is over my head. I simply don't know much about it other than I never seem to have enough and that I just keep blindly putting it into my 401K with the hope that some day I can retire comfortably. I know that's not smart but I don't know jack about it and feel I would be doing more harm than good by trying to predict which way the market's going to turn.

First, with that being said, does anyone feel generous enough to expand on the doomsday scenario outlined in the original posts and give some idea on what can be done to keep us from standing in the bread lines when the time comes? Do we (those without deep pockets) really have any hope?

Second, what's the best way to educate yourself regarding investing in general?

Perhaps there's too much information to be discussed here alone, however, your help (any of it) would be GREATLY appreciated.

[edit on 23-6-2006 by mecheng]

Hey, sorry for the abrasive quality of my previous posts. There's no excuse for that. I need to work on my attitude; in my life, including my e-life, I am plagued by people who ask me for my opinion, and then proceed to tell my how wrong I truly am.

But no one here is doing that today, and so I need to either be pleasant or cease posting.

I have a number of beliefs and opinions I have acquired from studying and testing them for the last 15 years. I'll show everyone what I think, and and how to test my theories.

And, since I'm unwilling to post my curriculum vitae here, I'll be careful not to appeal to my own authority.

Originally posted by smallpeeps

But isn't the paragraph above based on the current paradigm? I mean truthfully the US is a debtor nation and the dollar is a debt instrument. It's not backed by anything except like you said, the expectation that the US will not default on its massive debts. BUT if default does occur, what then?

Yes, that is all correct. However, the fact that the currency is not backed doesn't really mean much as far as current opinion goes. If you check out that book "Price Revolution and the Rythm of History," you'll see that there have been periods in world history when various governments printed excess money and the value imputed to the currency went up anyway. Conversely, there have been periods where desperate governments actually took money out of circulation, and the value went down regardless.

I used to be a "strict monetarist," and believed that government could control inflation by regulating the money supply. (Wikipedia has a pretty good thumbnail on monetarism.) But after doing a lot of research on periods of runaway inflation/disinflation, I have become convinced that the actual numbers are irrelevant in the face of popular opinion. The actions of the Weimar government in germany from 1922-28 illustrate this, as does Fed's actions under Paul Volcker in the 1970's battling stagflation. (wikipedia's article on stagflation contains innacuracies)

If a default occurs . . . it would be bad. But the level of damage would only be as bad as the depth of the default. And the govt has a large number of tricks up its sleeve to mask the impact from the public. So, even with a catastrophic default, I would expect a decade to a generation of "slump" while the dollar adjusted.

My basis for this is the Nazi Reichsmark, which continued to be used as payment in occupied France and Germany over a year after the German Reich had ceased to exist. Even when the government dissappears, the money lingers. . . . well, they aren't printing any more of them, are they??? (snide giggle here.)

As I understand it, all US citizens are massively in debt even if they don't know it. The dollar as a debt instrument allows the citizens to discharge their debts, but it will never be "worth" anything as opposed to actual commodities that do not lose value like gold and silver.

Nobody will ever hold the US citizens accountable for the federal debt. Their only liability is their future tax revenues. Any occupying power will have to put down insurrection, and confiscate the entire capital and real estate of the nation at gunpoint. Even then, where would you confiscate it off to? Again, setting up the environment where such a radically different state of affairs applies would take a TOTAL REVOLUTION of every factor of our civilization. Not that it wouldn't happen, but it won't happen over night. My own motto:

"Rome wasn't burnt in a day."

The dollar as a debt instrument allows the citizens to discharge their debts, but it will never be "worth" anything as opposed to actual commodities that do not lose value like gold and silver.

I've got news for you. EVERYTHING LOSES VALUE. Everything. There is no fool-proof store of value, ever. Gold and silver gain and lose relative value every hour of every day. This material world is impermanent, and you cannot take it with you. If you were holding stocks of silver in Spain when Cortez's expedition returned from Mexico, you'd have been ruined. People were. The value of silver went from a twelfth of an ounce of gold, to the modern rate of about a seventieth of an ounce of gold.

ALL value is relative.

Memorize that fact, and remind yourself that the Donner Party starved to death with change in their pockets. Any store of value is only worth what you can trade it for.

Doc, have you ever heard of people who mention UCC 1-207 and the "implied benefit" of discharging debts with funny money? I mean there are times when the dollar (or State issued tender) is seen as being worth little whereas real valuables are shown to be more resiliant. Ten thousand FRNs stuffed under your mattress do not count as capital unless someone believes that claim, like you say, but it really isn't capital in the true sense is it?

The value of "real commodities" are just as ephimeral, in my opinion. My silver example above is a great example. 8-track tapes were a "real commodity." So were Betamax tapes and phonograph records and all the rest. Or aluminum, which was so valuable in 1805 that the Emperor Napoleon shocked the world by dining with guests off of "pure aluminum plates!" (OMG!!!). Today, those plates would be worth $20 to a recycling yard, unless you could convince someone that they were "collectors items." Remember my Elvis plates??? Worth precisely what you can trade them for. Just like a dollar.

We're not talking about making money in securities, but rather planning for an economic implosion of the US.

Functionally, it's the same thing. Preserving your wealth is merely a less abitious goal. Why not increase it. Come to think of it, why wait for a market crash to start making money? Why not make a buck in the meantime, too?

See, if you figure out what will have value after "Mad Max" starts filming, that's functionally the same as getting rich, isn't it? If everyone around wakes up a pauper tomorrow, but you don't, then by definition, you're rich! So why wait?

Really it wouldn't be too hard to cripple the US economy through any of the bogeymen like bird flu or iran war or loss of dollar as the oil standard would it? How is it that these things don't concern you?

Actually, the economy can only be harmed to the extent that Americans' faith in future is shaken.

Let me explore that one a bit.

I'll give you three catastrophes in US history:

The JFK Assasination: November 22, 1963

The Space Shuttle Challenger crashes: January 28, 1986

The September 11, 2001 attacks on NYC.

Would you believe that the stock market went up the week after kennedy was assasinated? Or that it did the same in the wake of the Challenger crash in '86. Do you know why? Because the market was going up before the event. The subsequent market was merely a continuation of what the market was doing anyway

So, do you know why the market went down when the markets re-opened a week after Sept 11? I'll tell you why: because they were going down anyway

I will only say this once:

THE MARKETS DRIVE THE NEWS.

Not the other way around. People pay attention to news when they are losing faith in the future. They ignore what they don't think is relevant. Imagine. Investors in 63 and 86 were SO SURE of the markets that even the president's death, or a Nasa catastrophe, didn't affect their faith. On the other hand, 9-11 only confirmed what they expected, that markets needed to go down further.

Now, go get a chart of the dow for Sept-Oct 2001. Make sure it doesn't have the days from 09-11 to 09-24 missing. put in blanks for the missing dates. you'll see that although the market opened several hundred points lower after the re-open, the market went EXACTLY where the trendline would have taken it if the markets had been running anyway.

Or, my personal favorite: The viox news affecting the price of Merck stock last year. If you plot a trendline from the high, you'll see that, although there's a blip when the news hit, the stockprice of Merck was going down anyway, and the price didn't either accelerate or decelerate on a monthly chart.


Edit to fix quotes


[edit on 23-6-2006 by dr_strangecraft]

a slight correction to the original post.

the shorting that was said to be done on United, Marriot etc was done prior to 9/11. They sold, the crashed the buildings and a week later the market reopened. They made their money on the act, not after it.

Anyway, since it can't be hidden that Mr. Buffett hoards silver, it seems prudent to imitate what he does, not what he says. This seems to be what you are saying in the larger context.

ever hear of the Hunt brothers? If not, you'd enjoy reading about their attempt to corner the silver market in the 70's. They lost billions, and drove several of their arab clients to the brink of bankruptcy.

I don't think this thread is about making big bucks is it?

I've already said that hedging and profiting amout to the same thing. Mr. Buffet defnitely is trying to make big bucks. If that's not your goal, then you almost certainly don't want to emulate his tactics.

You have confidence in the dollar in spite of almost no policing of corporate activity or misconduct? I know for a fact that insider trading happens all the time without reprisal. What kind of future exists for a nation which doesn't police its institutions and then also exports that flawed monetary policy to the third world in an effort to control those poorer nations?

I wouldn't say I have confidence in the dollar. Maybe a better way to say it is that I am sceptical at the news of the dollar's eminent demise. I suppose I'm confident that its value will not go to zero before I can unload it on someone else. Along with my Elvis plates and civil war chess set.

Anyway, all I am saying is that no nation can act in a fiscally irresponsible manner forever without paying a penalty. It seems to me like the US is being set up for a fall economically.

I agree with everything you just said.

The problem is, what to do about it. And remember that if you spend a lot of money on precautions, and then later turn out to have been wrong, then you'll have paid a huge "opportunity cost" for wasting your efforts when you could have been enriching yourself.

See, it's not just a question of whether your instinct is right or not, it's a question of "what is the price of being wrong?" So you'll want to tailor your plans so that, even if you're wrong, and nothing horrible happens to the world, you still go right along with you savings intact. Sound right?

I'll give you and example: Y2K. I talked to a number of experts, who assured me that 'nothing can go wrong.' I had faith in their abilities, but not in their omniscience. What if things went wrong? Maybe not TEOTWAWKI, but say, the power went off for a couple of weeks, there was social unrest, and no more gasoline. Frau Dr. and I had a long talk, and I convinced her to prepare for it. But she made me promise not to buy anything we would not use anyway, and not to tie up our finances in stuff that would be worthless if the world didn't end.

So I made preparations, and turned out not to need them. And the price of gasoline did go up, so we had saved money by using my stockpile in the shed. We drank all the bottled water. And we finished the pallet of toilet paper about a month ago. (just kidding.) But the fact is, I was prepared, and didn't put my family out. In fact, we still use the barbecue grill, and love to go camping with the gear we purchased. So, I got prepared, and had confidence, with little "opportunity cost."

Now, if you go sticking ingots under your bed, and nothing goes wrong, what will happen? Well, you'll be paying 10 dollars an ounce this week, which is well above the average price of the last decade. So you may have a pretty lumpy mattress for a decade or two, if things don't nose dive, and you end up waiting for inflation to appreciate your stockpile for you. But, I guess you could go into casting your own jewelry, or dentistry, or something in the meantime. (note: I'm not saying there's NO silver under my own mattress, btw)

***

I don't want to spend the rest of my life posting about this stuff, and most people here probably don't want to spend a thousand hours of their lives reading a bunch of economics textbooks; so I'll tell you what advice I give my relatives, and the folks I eat lunch with after church.

There is a thing called the "Harvard Plan." You won't find it on the web (I just checked) or in any textbook printed after 1960. Because there is no way for a broker or certified financial planner to make any money off of you. I use a modified version of the Harvard Plan for my retirement savings, and would suggest you do, to. In fact, if you go to a CFP, they'll give you the same thing, with bells and whistles to make you think you're paying for the "perfect balance" of investments.

The Harvard Plan is how Harvard University got so rich. (25 billion, according to wikipedia), starting with a few hundred pounds in 1780. Now before you say, "sure, I could be a billionare if you give me 227 years, too;" keep in mind that there have been a revolutionary war, a civil war, two world wars countless smaller wars as well as countless recessions, depressions, and bank collapses (especially in New England!) since then. A lot of other institutions from those days are gone. But HAH-vahd is still trucking.

The plan is this. You divide your money in thirds. With one third, you buy US government bonds. Not civil or corporate bonds, but governement bonds (T-bills, as soon as you can afford them). The next third, you buy the Dow Jones 30 stocks. The final third you keep in cash.

Now, every quarter, you pull out your receipts and a newspaper, and you balance the numbers. If your bonds have been stagnant, and your stocks shot up, then you sell enough stock to buy enough bonds to equal things out. The same with the cash. If your bonds are worth $100, your stocks are worth $150 and you have $200 in cash, you take $50 and buy bonds, so that all three are worth the same $150. You blindly do this, every quarter, regardless of what newspapers say.

The magic of this system is that it keeps you doing the OPPOSITE of the other investors. When stocks are going up, you're slowly getting out of them. When bonds depreciate, and are relatively cheap, you are buying them the whole time.

Now, don't diss this system until you've done it for 3 years (enough to test it over the hump of a market cycle).

What you'll find is, while you take hits, you also keep buying through the cheap times, and get out when things are overpriced. This is the OPPOSITE of what the crowd does.

For instance, notice that this thread was posted, about silver being hoarded by buffet, only AFTER silver has declined from $13 to $10/oz. In other words, people chasing the high. (Not that I'm recommending either a buy or a sell).

I modify the plan, since I want to own some bullion, at home in case of catastrophe. So I subdivide my "cash" envelope into a third "gold/silver," a third euros, and a third USD. Not because those are "long term stores of value," but so that I have my bases covered in a hurricane. In the long run, NOTHING is a long-term store of value.

I even have a formula for adjusting my gold to silver ratio, but that's getting a bit arcane, for anyone who doesn't want to watch the price of the metals all day.

This system will do several things for you:

1. It gets you to quit watching the markets all the time. most losers overtrade.

2. It turns you into a contrarian, even while you actively increase your stake in the market.

3. It prepares you for sudden recession.

If you study the onset of recession (I have) you'll see that the downturn in stocks is followed by an upsurge in bonds (usually referred to as "a flight to quality" or some such.) When the cash is routinely worth more than the other two, you are approaching the market bottom. A handy indicator, that.

The harvard plan makes you buy stocks as their value plummets, and sell bonds right when demand is the highest. Then as cash becomes king again, you end up buying, and the market cycle starts over.

Now, why is this a preparation for TEOTWAWKI?

1. You're holding a lot of bonds. The super-rich hold bonds. Which means if America is going down the tubes, the govt will pay its bond dues NO MATTER WHAT. (They always have, without fail. Because the rich insist on it.) You'll hold a rare instrument of value right when people want it.

2. In a collapse, you functionally won't be able to buy stocks fast enough to balance your portfolio. And so you won't be "chasing the bottom," like all of the panicked people trying to balance their portfolios on an hourly basis.

3. You always hold cash (and bullion, if you're like me). So you're prepared for a REAL disaster, like a hurricane or some such.

Yes, you'll lose some value. Of the 3, two of your envelopes will be worthless in a financial collapse. But by definition, the remaining envelope will be able to feed your family for a couple of years.

What if NONE of it has any value? Then none of it mattered, and the aliens will dictate how you will serve your new galactic overlords, regardless.

Listen, I was convinced in the early 90's that a collapse was eminent. I had gotten friendly with some militia members, I was trying to stockpile, etc. But a good friend turned me on to the Harvard plan. And in '97 and 2000, I made absolute killings. And I was out of the market in 2001, during that sickening decline. And in the process, of rebalancing my stocks, I found a way to price non-volatile stocks so they wouldn't change rapidly and force me to rebalance my portfolio all the time.

note: I do not advocate the ownership of specific stock, or suggest whether the market will go up or down from here. The harvard plan is how I invest my retirement, not my speculative portfolio. The best insurance against being wiped out in a collapse is to be making money and watching out for danger.

I'm tired of typing for a while.
.

Dr...
Awesome! Thanks. This seems like a very simple plan (for even the simple minded like myself). You've been very helpful... now rest your fingers... I hear wrapping them around something cold helps!

edit: BTW... I gave you my WATS vote! Thanks again.

[edit on 23-6-2006 by mecheng]

Originally posted by dr_strangecraft
Hey, sorry for the abrasive quality of my previous posts. There's no excuse for that. I need to work on my attitude; in my life, including my e-life, I am plagued by people who ask me for my opinion, and then proceed to tell my how wrong I truly am.

Lol...I understand now.

Anyways, thank you for taking the time to post such informative material. As a total dunderhead where economics et al is concerned, I am grateful whenever someone paints a picture using layman's language.

Holy cow, awesome post Doc!

You gave me a lot to think about. I need to go read. I hope this thread keeps going but even if it doesn't, it'll be a hidden gem of a thread thanks to the free advice you just laid out. Very salient and reasonable. Nicely done.

And how did you know about the bullion under my mattress?!

BTW you don't think gold is too high do you? And certainly silver is trading at low levels compared to it's ratio to gold in the past yes? Clearly a lot of people are thinking about real commodities. Your point about the Donner party and Y2K was excellent. Can't eat gold or silver. Y2K-type preparations were prudent at that time and continue to be prudent IMO.

Thanks again!

Originally posted by smallpeeps

BTW you don't think gold is too high do you? And certainly silver is trading at low levels compared to it's ratio to gold in the past yes? Clearly a lot of people are thinking about real commodities.

I'm not going to answer a specific question like those, or post "advice." My carefully reasoned-out moral code prevents me for giving away advice for free when I am making a living by charging others. The more sinister reason is because, of all the free tidbits I've ever given away at cocktail parties, art openings, heck even in the middle of trade negotiations, I can safely say that NONE of the recipients ever acted on my advice.

If I told them to buy feathers (as an example), well, they'd wait 3 years, and then buy em. And then they'd get drunk and call me up at 4 a.m. to tell me that the bottom had fallen out of the market. Then they'd yell at me for giving them lousy advice---when the market topped 2 weeks after I advised them, PRECISELY like I said it would. But no one ever remembers their own mistakes; so the mistake must have somehow been . . . yours!

It's enought to make a person crotchety and acidic.

*pouring another caucasian . . . . be back with you in a minute. It's one a.m. here, ya know. *

I will post one more piece of info before I go to bed. And then I won't post here again. Shoot, I've already spoiled the first couple of chapters of the book I'm working on.

Here's the "news ya can use."

This whole thing started coming together back in the 90's. I was desperately trying to get out of my "career" in law enforcement, and was moonlighting at a commodities brokerage firm in the midwest. On top of that, I was moonlighting from that job with a group of guys who put together a private newsletter for some farmers who hedged their ag prices. We had had a string of bullseyes, and were building a following.

So anyway, my partners and I were building a weather prediction model for the whole of the US. Our plan was to track rainfall and thermal units across the cornbelt, and predict the corn output on a county-by-county basis. With that info, we could go long or short the numbers just before the govt released their crop forecast. We'd make a killing!

Well, that year, the model predicted drought. And I had personally shorted the price of corn. I mean, every penny I could lay my hands on. Even worked overtime at my hated "real job" to put more money down. Sure enough, the drought kicked in. The worst in years.

But you know what, the price of corn went down. Day after 100-degree day. But how? How could that be possible? Our model said "drought," and drought there was. And yet still the price went down every day.

I was physically ill. I had speculated with money I thought I could afford to lose; until it was lost, that is. My positions weren't closed out, since they were calls, but they were serious red ink.

And I was sitting in an airport bar, waiting for a flight to Albuquerque. They had the stupid TV on the weather channel. I couldn't stand to watch it, because they were just going to talk about the price of corn. I got the bartender to change to CNN/FN, and they were talking about the corn market. So I had the bartender change back to the weather channel. Forecast of rain for the 10th straight day in Chicago.

Then, It hit me. Like a bolt of lightning. There was a drought in Nebraska and Kansas, alright. But not in Chicago. Sure, no one grows corn in urban Chicago. But they trade it there. And the price of corn isn't set by farmers in Nebraska. It is set by commodities brokers, at the Chicago Board of Trade. All those guys riding the El and taking cabs to work, getting drenched every day. They were bidding down the price of corn because it was raining where THEY lived.

So it didn't really matter what the weather did in the midwest. What mattered was the mood of the floor-traders at the CBOT in Chicago. Because, despite the market data, they were trading their feelings. And even if farmers were talking about drought, the brokers didn't believe it because they saw rainy streets on the way to work day after day. Suddenly it dawned on me that I didn't need to predict rainfall in Nebraska. All I needed was to predict the rainfall in Chicago.

Now, it's not quite so simple. But the thing I learned that summer is that while data is useful, data doesn't set the value of goods. Human emotions do. you can have the perfect data set and still miss the emotional drama, and lose out. But if you get the emotions predicted properly, the numbers don't really matter.

****

I'll give you an example from this year, 2006. Look at the supply numbers over the past 3 years for crude oil shipped to the US. Then overlay that graphic with price. What you'll find is very little direct correlation. Supplies were actually tighter because of Katrina, but prices fell. At the height last summer, before hurricanes had done anything, the price soared. Even while tankers full of oil were waiting in line at the docks.

You know why? Because every trucker in America is afraid of the price of diesel. So he's called a broker, and asks "how do I hedge the price of diesel?"

And the broker says, "you can't. The cash market in diesel isn't liquid enough. No volume."

And the freighter says, "then what can I hedge?"

The broker grins and says over the phone, "you can just hedge using the price of crude oil as a substitute for diesel futures. That's what everyone else is doing."

So what you have is a buncha business people looking for insurance against future price hikes at the pump, but who have been told to hedge using the price of crude oil.

So what you have in the crude futures price, is an index of public sentiment about the price of oil. Not an index of available supply. But an index of sentiment.

A savvy trader can use that info, and exploit the difference between the supply numbers and the public sentiment. And make a frikkin killing.

****

So, how do you use this? How do I? I look for technical numbers. That part is easy. you find it all over the WSJ and the financial channel.

The second part is a lot harder. You find a scale of public sentiment. One you can quantify. And you trade the difference between the "price" and the "mood."

Measuring mood takes creativity, but it can be done. Maybe how many empty starbucks cups are in the trash outside of the trading pit. Maybe it's how many new suits a trading firm is hiring (I've actually used that one, btw). But something that shows you how confident people are.

*******

Sometime I'll tell you about the movies and market sentiment.

here, I'll give you a taste:

The last major low in the dow was 1974. You know what movie swept the oscars that year?

The Exorcist.

The all-time high was 1998. you know what movie got all the oscars?

Titanic.

See, when a horror movie wins oscars, you're at the bottom of the market. The whole culture's gone negative, and people revel in senseless violence. And people want to hear about the devil, they want to SEE wickedness incarnate. They NEED it.

When you're at the top of your game, the whole civilization pauses for a second, as if to say, "this is as good as it gets."

And after that, all of our efforts are just like re-arranging deck chairs on the . . .

People felt like the boat was slowly going down. Like we're all doomed from here--that we have front row seats on an amazing spectacle of human suffering. And all we have in the end is . . . our love, as we slowly freeze to death.

*cue celine dione love-theme*

See, the markets themselves are a huge, global sampling of the public's view of the future. when the last bear has sold his last share of stock, you know what you call that? The bottom. And when the last bull, the last market enthusiast finally owns all he can buy of the 'perfect' stock, then the market literally cannot go up any more. And that is called the top.

*pours another russian*

well, that's enough for now. You can take it from here.

Just remember: Sometimes you eat the b'ar, and sometimes . . . . oh, nevermind.

.

Where2Hide2006,
pretty much in-depth summation of some of the factors & variables...

from my perspective on your observation
point #5. getting a true inflation rate

i think one gets a truer figure of just what the inflation is now & 2 years out

if someone would compile the figures of CEO and Top Executive pay packages.
see, those elites have the accumen, resources, projections and an excellent
staff of support and negotiators/agent-lawyers to enter into multi year compensation packages at some 8,000 corps. across the nation.
~And they sure aren't going to get stuck in a decreasing take-home $ situation~

point #7.

the price of gold was prodded, influnced, speculated upwards, mostly because
the ~8,000 hedge funds, doing futures & those derivitives. The timing of the
broader markets' recent downturn and the dramatic 30% drop in gold & PMs
was all engineered & manipulated by central banks flooding the gold bullion
markets so the gold price would drop & the overshorted-overextended hedge funds could save their buuts.

** isn't it strange that gold commodities fell for the 5 weeks leading up to the
newly minted & released $50. 'Buffalo' 24kt gold coin??
the W.P. mint will make a 3% markup on all the gold bug speculators,
the increased gold coin in circulation will help diminish the volatility as there is
another several million ounces of gold in circulation & trade

**the sudden expansive growth of private equity venture groups in the market
to buy up value corporations while divesting in the old growth model corps.
the market landscape is changing toward merging big caps into Mega caps.
one of the recent players is the Carlyle Group
one of the mega corps is the Anadarko, now the largest exploration/production !

**the bankers, financiers, manipulators are remaking the economic landscape...
all the foreign investors will have to re-position their holdings, re-balance portfolios,
just to keep from losing their holdings and dollar value. They, and the average
investor, the mutual funds, even the Chinese...are caught in the market cycle
and nobodys' going to take or accept losses- they are obliged to follow the
new leaders that are being created by the elite capitalists

...oh, and China holding billions in treasury notes...they might just think
they will be exercising pressure on US policy, but they know that there's plots-counter plots-other counter plots working their way thru strategic maneuvers...
it's all about the 'last-man-standing'

re; your thought that an Iran war will commence in 2006...i, wouldn't bet the farm.

just a few points about the points you made....
enjoyed the read you posted

Originally posted by dr_strangecraft
But HAH-vahd is still trucking.


Was this a pronunciation guide or a Notariqon pointer?

Via Gematria HAH-vahd = 27 = 3 * 3 * 3 = mouth = mars = red, scarlet,crimson

The mouth is surely the medium/vessel for the distribution of the word = veritas!

The Harvard shield is crimson - with 3 books!

Perhaps a notariqon could be proffered by dr_strangecraft....

[edit on 24-6-2006 by Scorpiomoon]

Written Guanrantee, Stock Market won't crash!!!

did you know that there was a group in place to rig the stock market so it doesn't crash?? it's made up of bankers, and others, who if the stock market starts looking too bleak, well, they will prop it up by gobbling up stock....

or at least this is what is being claimed here....

groups.yahoo.com...

here we go again ... The market is down 120 pts again today...sellings are unloading AHEAD of the Federal Reserve Meeting...and the new Inflation numbers.

I PREDICT:

A 300 Pts Loss By the End of Week... Mark my words...

...However I am not psycic and have no super-powers...and i don't know any inside info... I just follow what is going on, and i understand some of it... The Fed is going to give the hint that they are not done raising rates...might even raise them 4-5 more consecutive times... the Bears are Back... Hide the Children.

How bad is this going to get??? We Should Know Soon... STAY TUNED!

Originally posted by Scorpiomoon

Originally posted by dr_strangecraft
But HAH-vahd is still trucking.


Was this a pronunciation guide or a Notariqon pointer?

Via Gematria HAH-vahd = 27 = 3 * 3 * 3 = mouth = mars = red, scarlet,crimson

The mouth is surely the medium/vessel for the distribution of the word = veritas!

The Harvard shield is crimson - with 3 books!

Perhaps a notariqon could be proffered by dr_strangecraft....

[edit on 24-6-2006 by Scorpiomoon]

Incredibly close. I'm surpised you got the red/scarlet imagery correct, as well as the allusions to truth. Too bad you didn't try for an ATBASH with something along the lines of "He-vav-yad" and all of the "hand" connections between Hahvahd and the "red hand of ulster." Coupled with mars, it brings all sorts of sacrifice, circumcision and ritual bloodletting symbolism.

He-vav-yad gives us 19, which (besides mars), brings us the final 11 "unlucky" days of the Saros cycle, that predicts eclipses. 19 is the final interger of the Mayan short count (base 20) calendar and numerical system.

19, the eighth prime, can only be arrived at by 10 + 9 from the digits; 10 of course, means "everything" in hebrew, while 9 is the "fulfillment of times"

So here we have the paragon of an institutional investor, literally "biding its time" until the fulfillment is "at hand."

As the eighth prime, 19 stands for resurrection, revivification, and "breathing life into the bones."

The sacrifice of Heremon ( the red hand of ulster) marked the foundation. As America's first university, Harvard is also the prototype of the uniquely American research university, the first of its kind and the originator. Apparently, Hah-vahd is biding its time, before some coming crisis requires intervention . . .

My joke was created by leaving out the "r's" in Harvard.
R is resh, the head or capitol or foundation. The tower of Babel with it's top (head) in the heavens. Of course Babel was never completed--- it is the unfinished pyramid of the dollar bill. And Harvard has it's "r's hidden;" suggesting a falsified origin, a mythological beginning that shrouds the "truth" of Harvard's beginnings.

But wait a second; r is only the 18th letter of the alphabet. It is one short, like Babel itself, r is the incomplete work of the master craftsman. Awaiting the time of fulfillment by sacrifice.

Hey, we didn't even get into the anglo-saxon roots of "haerve-ardh" the literal "middle earth" of Tolkien's fantasy milieu, and all the sacrificial symbolism therein.

Anyway, this conversation will probably be viewed by hoi polloi as ranging too far a-field. mayhap we whould u2u, or otherwise start a whole 'nother thread.

Or at least another clew.

.

Originally posted by Scorpiomoon

Originally posted by dr_strangecraft
But HAH-vahd is still trucking.


Was this a pronunciation guide or a Notariqon pointer?

Via Gematria HAH-vahd = 27 = 3 * 3 * 3 = mouth = mars = red, scarlet,crimson

The mouth is surely the medium/vessel for the distribution of the word = veritas!

The Harvard shield is crimson - with 3 books!

Perhaps a notariqon could be proffered by dr_strangecraft....

[edit on 24-6-2006 by Scorpiomoon]

Incredibly close. I'm surpised you got the red/scarlet imagery correct, as well as the allusions to truth. Too bad you didn't try for an ATBASH with something along the lines of "He-vav-yad" and all of the "hand" connections between Hahvahd and the "red hand of ulster." Coupled with mars, it brings all sorts of sacrifice, circumcision and ritual bloodletting symbolism.

He-vav-yad gives us 19, which (besides mars), brings us the final 11 "unlucky" days of the Saros cycle, that predicts eclipses. 19 is the final interger of the Mayan short count (base 20) calendar and numerical system.

19, the eighth prime, can only be arrived at by 10 + 9 from the digits; 10 of course, means "everything" in hebrew, while 9 is the "fulfillment of times"

So here we have the paragon of an institutional investor, literally "biding its time" until the fulfillment is "at hand."

As the eighth prime, 19 stands for resurrection, revivification, and "breathing life into the bones."

The sacrifice of Heremon ( the red hand of ulster) marked the foundation. As America's first university, Harvard is also the prototype of the uniquely American research university, the first of its kind and the originator. Apparently, Hah-vahd is biding its time, before some coming crisis requires intervention . . .

My joke was created by leaving out the "r's" in Harvard.
R is resh, the head or capitol or foundation. The tower of Babel with it's top (head) in the heavens. Of course Babel was never completed--- it is the unfinished pyramid of the dollar bill. And Harvard has it's "r's hidden;" suggesting a falsified origin, a mythological beginning that shrouds the "truth" of Harvard's beginnings.

But wait a second; r is only the 18th letter of the alphabet. It is one short, like Babel itself, r is the incomplete work of the master craftsman. Awaiting the time of fulfillment by sacrifice.

Hey, we didn't even get into the anglo-saxon roots of "haerve-ardh" the literal "middle earth" of Tolkien's fantasy milieu, and all the sacrificial symbolism therein.

Anyway, this conversation will probably be viewed by hoi polloi as ranging too far a-field. mayhap we whould u2u, or otherwise start a whole 'nother thread.

Or at least another clew.

.

Sated? I didn't think so. Check out myGravity's Wake rant to discover what real confusium looks like.

.

Thanks for another informative and entertaining post Dr!

I agree the topic has meandered somewhat - I'd love to hear more, either U2U or new thread - the topic is yours....

Acerbic wit equipoised with pearls of wisdom - BRAVO!

Fabulous post. I have been worried about this for a while as well. My broker suggested investing in silver. And I have some wealthy friends investing in precious metals (mostly silver).

I read the post about the person asking about the 41k. I am not a broker, but there is always a good investment law, Invest what you can AFFORD. Meaning do not invest all your money in precious metals (if that is what you choose to do), invest like 1/5 or even LESS of your money in some kilos of silver or other things.

retinoid receptor,

I guess my advice is not to "invest" in things.

I put quotes around the I-word because most people mean a specific thing by "investing"--- that you buy something that is "sure to appreciate in value" (like my Elvis plates for instance . . .) You stick it under your bed, and then some day, it will be worth as much as a superman comic, Right?

One of the points I've tried to make in this thread is that practically nothing is sure to go up in value.

Let's take the example given by your broker, of owning silver. Now, even if Ag is in a long-term bull market, there will still be serious price dips and periods where "the news" says the bull market is over. Suppose it's going to $20; but it has to go down to $4 first. Are you willing to hold it when it sinks that low? If you are, then why not just wait, and buy it when it gets down to that level? Sometime, remind me to post about the 3 phases of a market cycle). Notice that I'm not making a prediction that silver is going to either number.

So you cannot "buy and hold," and never think about it again.

I know, that pundits tell you this is HOW to invest. Which is why they are on TV instead of actually investing their money from the beach of their fabulous bayside villa in the Carribean.

If you had "bought and held" ten years ago, you'd still be holding some Enron and Worldcom stock certificates. (Unless you were using the Harvard plan---then you got out of them as they approached their peak; but then that isn't a "buy and hold" plan, either . . .)

NOTHING HAS INHERENT VALUE. Which means there is really no such thing as investing; it is all speculation, making a bet that one of the things you pick will do better in the future than other people expect. And that isn't investing, it is bookmaking. Again, silver was selling for just $8 an ounce 20 years ago, and its above $11 today---but you'd have had to have held it when it went down to $4 for a whole decade, which practically no one did---which is why it's worth more now . . .

Here is how I finally got serious about growing my wealth through securities:


write a WRITTEN PLAN that contains the following:

1. What you expect the 'investment' to do. How much will it go up or down?

2. How you will measure success or failure? Will you decide that it's a dog if it looses 5% of it's value, or is that a temporary dip? What about 30%? If it goes down, will you see it as a chance to buy even more at a great price, or as the portent of things to come?

3. How often will you evaluate it? The first mistake is "over-functioning:" Where you try to do something to make up for the fact that you're getting nervous about a security. So you start checking the markets every 5 minutes, but you still don't have an idea of when you'll act, because you skipped item 2. So I make a commitment to ONLY evaluate my security periodically. I've set up time tables to check every 3 months, every week, or every 5 minutes. I used each one for different speculations.

4. STICK TO YOUR PLAN. Remember, 95% of the people "trade their instinct." So obviously, you'll have to overcome your instincts, or you'll never do better than them. Doing this will mean that you miss a few big moves. Sure, you'll miss part of google. You'll also miss part of BRE-X as well, hopefully.

5. KNOW WHAT IT WILL MEAN IF YOU ARE WRONG. Will you lose 20% of your 'experimenting money?' Will you lose all of it? What will your plan do, if the market does the opposite of your prediction? And if you are wrong, you need a contingency plan in place; see #2. Do you have a stop in place? (Note: any broker who tries to talk you into widening and/or removing your stops, or who doesn't think you need stops, is not your friend.)

6. PAPER TRADE / BACK-TEST
When you are not in the market, write down pretend-trades, and see if you can write out a plan that would work for making money in that given market. Write down your trades, subtract out the appropriate broker fees, and see if you'd make money. Backtesting is where you come up with an "investment program" and then apply it to some period of market history you are not familiar with. If buying silver and sticking it under my mattress is my savings strategy, how would that have worked in the 1990's? Howabout the 1970's? If you don't know the answer, I'd say you are not ready to 'invest' in silver today. You can pay for historical data streams, or go get archived newspapers on microfiche from the local university library. You don't need daily prices, weekly or monthly should give the answers. If you think you need daily rates, you should adjust your trading time-scale, or pay for a data stream.

NOTE: write your WRITTEN PLAN by pen, in ink, not on our computer. Because if it goes wrong, you'll just never open the document. Instead, write it out in longhand like a contract and put it on your fridge, or the mirror where you brush your teeth in the morning, with the dates marked in your day planner.



See, I'm trying to point toward doing things differently than "the herd." So let's name some of the things "the herd" does when it puts money in the market:

a. acts on "a hot tip," either from Kramer or an uncle or their broker or whatever

b. buys securities that have recently had a run-up. In other words, they chase other people's success. They try to get rich buy mimicing Warren Buffett, for example. But did he get rich by mimicing someone? Of course not; he was thinking for himself. (actually, he was paying talented people to think for him, but you see my point; he was not following the herd.)

c. Invest whatever name they hear on TV, or whatever name is popular and "in the air." Like buying a mutual fund because brokers always talk mutual funds. This is why Enron's stock was going up, even while they were being investigated.

d. Trade when everyone else is trading. They sell stuff on fridays, because they don't want to hold assets over another weekend. They transact most on mondays, because they've been agonizing about their investments over the weekend (and ignoring my rule #3 above.)

e. Trade 'their gut instinct.' This is the phenomenon I was posting about earlier, about the price of corn going down because it was raining at the Chicago Board of Trade. Most people trade their guts. So if you want to do what they do, you will trade YOUR instincts, too.

f. Think they are smarter than everyone else. The psychological term is "cognitive dissonance." Each individual assumes that they have special insight into the way money works. (Which is why this discussion DOES belong on a conspiracy website: think about it.) So, if you think you are smarter than the people around you, then you are probably about to pay the "ego tax" by transferring your wealth to someone who really knows what he or she is doing.

g. Lose money.
This is what the crowd does best. No matter what they do, they lose money. Gee, don't you want to do whatever it takes to become different from them?

.

I know this an old topic, but the crap is about to hit the fan with a Chinese Market Crash this Summer.

Its May 2007 --- Buy GOLD NOW!

The Dollar crash is coming soon! Buy GOLD NOW!

Originally posted by Where2Hide2006
I know this an old topic, but the crap is about to hit the fan with a Chinese Market Crash this Summer.

You know that China's market is going to crash how again?

Are you involved in some insider trading deal. That's illegal you know