Jim Sinclair quote

"My approach is and the truth is Bert’s (Seligman) and Jesse’s (Livermore) was you don’t have to make it all. If you can knock off the middle 50% or 80% of the move, you’ve hit the jackpot. But the guys who want bragging rights buying bottoms and selling tops go broke."

Happy Birthday to me + Great Bond Bubble!

Thought the bubble days ended with the bursting of the housing bubble? Think again. The gigantic US bond bubble is here. Mark my words. This is the next mega monster to short the heck out of. All faith in the US government and trust in their ability to manage their finances and debt have been thrown into the garbage bin. Higher yields and lower bond prices are fast approaching.

Today's quote

"A bull market's job is to throw you off and your job is to hang on"

Listening to opposing viewpoints

Have the courage to expose yourself to counterarguments no matter how strong the temptation to only bombard yourself with commentary that falls in line with your own personal view. To be able to debate and counter the opposing viewpoint is the true test of one's conviction in an investment, or any belief for that matter.

Heads I win, Tails you lose!

Watch the charts. Turn off the financial news because it is only unnecessary noise. Financial media's attempts to rationalize price action is akin to a new born trying to explain the meaning of life. How else can you explain some sort of rationalization they try to make of every micro move in price action everyday? If the dollar strengthens, it is because of a strengthening economy because "investors have confidence in the US". If the dollar weakens the next day, it is also a sign of strength in the US economy because people are choosing "to embrace risk assets". It is absolute rubbish and it is dumbfounding that this game of "heads I win, tails you lose" can go on like this.

Jim Sinclair said it best when he coined the acronym "MOPE" - Management of Perspective Economics.

Martin Armstrong on smart money

Have gotten hooked onto the writings on "#1 political prisoner" Martin Armstrong. I have always wondered why people point to a rising gold price as a "warning signal". The reason for this, as laid out by Armstrong, is that smart money always forms the primary trend through its very acute sense of forecasting what is to come. It piles into 'quality' assets that will ultimately be the most appropriate investment for what is to come. So the argument goes that gold is rising because it is foretelling a major crisis ahead of us.

Then what, one might ask, can we discern from gold rising right before it peaks? If the economy were the start rebuilding right after gold peaks, are we to assume that the last parabolic phase in gold failed to foretell this in spite of a rising gold price? No! The reason for the last phase of gold's rise is the dumb money. They are the last to arrive and the first to get slaughtered. Their piling in will help drive the price to the moon, but it is too late, for the smart money, that got in and started the trend when gold begun its rise from $250, was the original and early forecaster of what was to come.

Interesting times

To say we live in interesting times is an understatement. With US politicians and mainstream economists refusing to give up their blind optimism about the 'hope and change' that is coming in the economy, the economy continues its decent into the abyss. The below video about the '99ers'- those millions of Americans whose unemployment checks will soon dry up after the fast approaching 99th week - is truly eye opening. The people in the video are a representation of the great "American Dream" that Alan Greenspan, the Fed in general, and past US administrations have given the American people. It is a result of flawed economic theory and a lack of responsibility on the part of policy makers, whose sole purpose is to get reelected and live for the moment by keeping the party going for as long as it can (ie. kicking the debt can down the road).

Link to 60 minutes video- The 99ers

Unemployment is currently closer to 20%, far higher than the government's 10% figure that they would rather have you believe. The same goes for the rate of inflation. In spite of helicopter Ben Bernanke's repeatedly using the "low inflation" as an excuse to stimulate and print trillions in more money, the cost of everything from food to health insurance to transportation costs continues to rise- all this in the midst of a collapsing economy, ever rising unemployment, and stagnant wages.

This is clearly a depression. And gold- the only hedge against government insanity and mismanagement- continues to be shunned by the general public and financial managers. The wall street-government complex has so far been successful in brainwashing the people into believing a bottom in the economy is just around the corner. But the smart money currently moving into gold tells a different story.