Just a thought...

Before I do, I just wanted to thanks everyone for their patience on the 2008 recap article. It's coming, I promise!

Think about this for a second. You're driving down the highway and you see a sign saying "No fuel available for next 70 miles". You glance at your tank indicator and it seems you a little less than a 1/4 of a tank left. Unless you have a car that has awesome MPGs, you need to refill. You pull into the next gas station.

Question: How much would you be ready to pay for each gallon?

Does $5 sound ridiculous? Unless you don't have any interest in getting home, you'd probably pay it anyway. Now assume that the station is selling gas for only 50 cents a gallon! You'd fill up wouldn't you!

This is very similar to the situation now presented. On the run up of gold, silver, oil, natural gas, people stocked up preparing for higher prices, including commercial interests such as airlines, refiners and miners. Now its time to refill their inventories and prices are smashed due to the external factors of the credit crunch.

Investors and large interests alike are buying like these commodities are going out of style - and they are! When users who need fuels and precious metals like people need air, there is no price they won't pay. The alternative is to stop doing business!

When there is a shortage of supply amidst continuing demand, prices take the far back seat and availability takes center stage.

And basic supply and demand tell us that such a shortage may be upon us.

Suggestion? Buy physical Gold and Silver (and Oil and Natural Gas if you can figure out how). Because whether silver goes to $40 or 400, it will pay to have some when everyone else wants it.

Silver Available!

I found a dealer that's selling silver for less than $15 an ounce. If anyone is interested in buying - in any denomination between 1-1000 ounces - let me know!

Isn't it interesting

There are many fascinating occurrences in our markets. Call them coincidences or downright obvious, they each nevertheless deserve attention in their own right.

Isn't it interesting that...

...Platinum which just a few months ago sold at a 100% premium to, now sells at par with Gold.

...While almost all agree that stocks will do very well in coming years, they nevertheless refuse to buy heavy.

...The paper and physical markets for precious metal are so out of whack yet most mainstream media sources barely mention them at all.

...While you'd think that paper silver (SLV) would be more liquid than physical metal - it is exactly the opposite!

...Yields for 3-month Treasuries fell below zero meaning people are willing to pay extra money just for the Government to secure those same Dollars!

...The markets are completely factoring out inflation and betting on a 11% deflation over the next 12 months! Not surprisingly commodities are rising.

...Just as the Government and Fed pumping trillions into the economy to save it from imminent collapse, comes a mere $50 billion "Ponzi" scheme and sets the whole scene back a notch!

...Gold stocks which plunged long before the metal are now surging as many expect gold to rise significantly, and the Dollar to fall, or at least stabilize.

...$40 oil - which almost all analysts considered the line between cheap and scarce supply - has held extraordinarily well!

It's one crazy market!

I.O.U.S.A.

If you haven't seen this video yet I suggest you do
(apx 33 minutes)



Freaky, huh?

For the Record

I am going to be making a few statements. I hope that although they will not be accompanied with proven facts and sources that are available, they will nevertheless be understood by the market maven familiar with technical trends, sociological and basic economics. I hope to offer a thorough explanation for all mentioned in the next few days.

Commodities and Oil have bottomed! We can expect to hear more about inflation than deflation in the coming months. For now it seems that major commodities, primarily oil (at 40) have bottomed. Many were hoping to see a $1 a gallon by summer. I find that impossible. Oil, corn, soybeans, are up 14, 13, and 9% respectively. This may be understood based on the following statement.

The Dollar has topped! Nothing scares the crap out of bond investors more than negative equity and that is all that the treasury is offering. When a 90-day treasury bill offers zero interest what incentive does the income investor have other than preservation of wealth? Inflation will roar we know. Its only a matter of time before the Dollar becomes essentially worthless to own. Which brings me to my next pet-peeve.

Buy physical Gold and Silver! If you haven't yet you will be sorry. Just as you were if you didn't buy the Dollar six months ago. Every analyst agrees that the precious metals will raly eventually. And its heyday is entrenched in the Dollar's decine. Not a single major gold discovery has been found, while trillions of Dollars have been printed onto the market. It's a stupid bargain.

Buy Stocks! No, not financials and homebuilders not yet as far as I'm concerned. But anything that would seem to gain if commodity prices rise is a sure thing, so long as it's debt is under control (in some cases even if it isn't). There are some serious delights in the market today including: Silver Wheaton (SLW), Freeport-McMoRan (FCX), ConocoPhilips (COP) and LDK Solar (LDK) to name a few.

The Bottom is Neigh! The bottom in the general equities market is getting closer but we are not there yet. I still need to see one of two things: Panic or a Double Bottom. Until I see one of those I won't buy. A Panic bottom will look like 1930, while a double bottom will look similar to 1970s, or 2003.

To be continued...

I'm Back!

I know it has been a while since I've posted my last article. I have been traveling throughout Australia and New Zealand. I've also been quite busy recently working on various projects, including plans for starting a business.

The reason for the lack of posts over the past few months, has been simply that I have said much of what has to be said, and have made very few changes to my portfolio. I do plan to sell off the last of my Dow Shorts although I haven't yet seen "the bottom". I have added slightly to my silver reserves and I suggest you do as well. The whole financial community called the Dollar rally and they are now calling for the Gold rally. Make sure you're on board!

I plan to post an article this week including an overview on the market, when and how we expect a bottom, what I'll be buying and what you should be looking out for.

Have a wonderful weekend!