As expected, the FOMC (Federal Open Markets Committee) raised the interest rate on federal funds (the rate for overnight loans from one financial institution to another from funds held at the Federal Reserve) from a range of 0.00-0.25 to 0.25 to 0.50.
Full release here.
On the surface, this seems much ado about nothing, or, almost nothing, but the Fed's long-awaited rate increase will have ramifications across the investing and business world.
For instance, the first salvo will be to any and all loans tied to the Prime Rate, which include most credit card, revolving debt and home equity loans and lines of credit.
Shortly after the Fed's rate announcement, major banks began announcing that they were raising their prime lending rate from 3.25 percent to 3.50 percent. Wells Fargo was the first bank to announce the rate hike, followed in rapid pace by Chase, Citibank and Bank of America. The increases are effective immediately.
What that means is if you've been paying 4% (not unusual) on a home equity loan, your new rate will be 4.25%. In real terms, on $250,000, that's an additional $37 per month. Not much, one might think, but, considering that the Fed plans on continuing to increase their base FF rate - which will green light the banks to up the prime rate - the cost of borrowing will simply continue to increase.
Many analysts have shied away from calling the Fed's move ill-timed, though an equal number has called it "too late." What it certainly is not is "too little." Insofar as it is the smallest rate hike imaginable, its effects will be far reaching.
In larger, banking terms, try this: A billion dollars borrowed over seven years at 1/4% would cost $12,010,470 per monthly payment. At 1/2%, it's $12,116,790, an increase of $106,000 a month. That same billion, borrowed for just one year at 1/4% interest requires a monthly payment of $83,446,220. At 1/2%, it's 83,559,200, an increase of $112,980 per month.
With numbers like these being thrown around routinely - and daily - by the largest financial institutions, hedge funds, brokerages and their ilk, something is bound to blow up sooner, rather than later. Already we've witnessed carnage in the junk bond markets, which have been pounded in anticipation of today's Fed announcement and there will surely be more to come.
On wall Street, stocks appeared to love the move, with the Dow up 224 points, the S&P gaining 29.66, and the NASDAQ ahead by 75.77. This looks all well and good right out of the box, but there's a quadruple witching day coming up Friday on options, and year end is now within spitting distance.
It might be wise to square up one's positions - if one has any - before the end of 2015 to take advantage of tax breaks for losses and/or long term gains. Precious metals moved rather sharply throughout the day and did not pull back after the Fed announcement, despite the dollar remaining strong, which is the obvious outcome.
For now, the strong dollar will continue to stoke deflation, as imports will become cheaper. To anybody who's been Christmas shopping, the price structure is obviously on the low end this season and will likely be bargain basement after the holiday shopping ends.
Most Americans will find bargains in stores, if they have any money with which to purchase them after paying what are sure to be higher credit card bills.
According to the Federal Reserve, the US economy is supposed to be strong enough now to absorb this rate increase and the associated nuances. At this juncture, it's far too early to tell.
We shall see in coming weeks and months. As Ernest Hemingway so eloquently put it in The Sun Also Rises: "How did you go bankrupt?"
"Two ways. Gradually, then suddenly."
Wednesday, December 16, 2015
Pre-FED-Hike Notes for the Truly Deranged and/or Excited
As of 12:30 pm ET, amazingly, the Dow, NAZ and S&P are all right at (or pretty damn close) both their 40 and 200-day MAs.
In other words, the entire market will be essentially flat going into the FOMC announcement. No clues for anyone, except that move up in PMs this morning.
Putting on my best guessing hat - which stragely resembles a dunce cap - I'd say the 0.25% rate hike is all but a done deal. The Fed has gone too far and they know it.
This is really a now-or-never condition, and they must go with NOW, because NEVER doesn't really mean never. It means they will have to do this at some point. There will be significant pain ahead, but only for those who are highly leveraged, over-indebted or just plain stupid.
Everyone has had seven years to prepare for this moment. If you haven't gotten a whiff of what's coming, you are not to be pitied. You will be dismembered and disposed of by the gnarly beast of deflation.
That's my take.
Final note: Yesterday, over at ZeroHedge, I reiterated my call from about two years ago that silver would see $12. Another poster said $8.25 was the target, or bottom. I'm fine with that. Will be buying at $12 and buying even more if and when it ever gets to $8.
90 minutes to lift-off. Good luck to all.
In other words, the entire market will be essentially flat going into the FOMC announcement. No clues for anyone, except that move up in PMs this morning.
Putting on my best guessing hat - which stragely resembles a dunce cap - I'd say the 0.25% rate hike is all but a done deal. The Fed has gone too far and they know it.
This is really a now-or-never condition, and they must go with NOW, because NEVER doesn't really mean never. It means they will have to do this at some point. There will be significant pain ahead, but only for those who are highly leveraged, over-indebted or just plain stupid.
Everyone has had seven years to prepare for this moment. If you haven't gotten a whiff of what's coming, you are not to be pitied. You will be dismembered and disposed of by the gnarly beast of deflation.
That's my take.
Final note: Yesterday, over at ZeroHedge, I reiterated my call from about two years ago that silver would see $12. Another poster said $8.25 was the target, or bottom. I'm fine with that. Will be buying at $12 and buying even more if and when it ever gets to $8.
90 minutes to lift-off. Good luck to all.
Tuesday, December 15, 2015
Last Dance Before Yellen's Rate Hike; Stocks at the High End... with Tom Petty Video
In tribute to today's madcap stock rally in the face of tomorrow's FOMC policy rate decision, we present Tom Petty and the Heartbreakers classic, "Mary Jane's Last Dance."
Picture Mary Jane as Wall Street, High Yield Bonds, the global economy, or all three. Tom Petty is the Federal Reserve. That's all for today. Tomorrow's a big one.
Picture Mary Jane as Wall Street, High Yield Bonds, the global economy, or all three. Tom Petty is the Federal Reserve. That's all for today. Tomorrow's a big one.
Monday, December 14, 2015
Is a Global Recession Just Ahead, or, A Global Depression?
Gas prices at the pump haven't been this low since 2009, though the prices back then maintained for a very brief time, as oil plummeted during the financial crisis (remember that?), but quickly rebounded as the Fed and other central banks added extreme amounts of liquidity to markets globally and before long, crude oil was back in the $90-100/barrel range.
Last year, the price of a barrel of crude - both Brent and WTI - began a precipitous decline, cutting in half the traded price. As 2014 turned to 2015 and many culprits were blamed (Saudi Arabia, US frackers, Russia(?), the price continued to hover in the $45-65 range. By late summer, all bets were off as the price of a barrel of crude fell into the low-$40 range, and then this month declined into the 30s.
While gas at $2/gallon and lower is a boon for drivers, especially in the US, where commuters and businesses were burdened with gas above $3.00 and sometimes over $4/gallon for years, it's not such a great deal for oil producers, especially the aforementioned frackers, whose marginal profitable price per barrel was estimated at somewhere between $45 and $75 per barrel.
Plenty of rigs have gone idle, but debt has to be serviced, and most of these drillers are on the hook for millions, borrowed from banks when the getting was good, now having to pay back the costs of exploration, drilling and extraction while operating at a loss.
The oil patch is just one element of the global liquidity crunch which may be about to enter a new, more dangerous phase, when, in two days time, the FOMC of the Federal Reserve is supposed to raise the federal funds rate for the first time in more than seven years.
The Fed plans to set the rate at 0.25% for money banks can borrow from the Fed, and, while that may not sound like a big deal to most, it certainly is to banks and corporations, which have been borrowing and spending at record paces since mid-2009.
With the FOMC rate policy decision now less than 48 hours away, there's a growing nervousness on Wall Street over this unprecedented move by the Fed. It's unprecedented because there's a vast amount of evidence that the bubble the Fed has blown is about to be not only pricked, but popped and blown wide open. Simply put, the party is about to end, and the drunks on the dance floor will be looking for a ride home, but nobody will be available for a safe trip, because not just the investment and corporate community, but the Fed itself, is staggering and woozy.
It may be a big, bad boogey man, like the 2000 scare, or the Mayan calendar, or those pesky asteroids which dare to come within 100,000 miles of dear planet earth. Or, it could be the real thing.
Nothing lasts forever, and, from the looks of the bond, commodity, and emerging markets, the long "recovery" and stock market rally seems to have run out of steam. Global trade is down, global GDP keeps being revised lower, US manufacturing is fading, China is becoming a basket case. It all points to reduced growth, or, in proper recession terms, negative growth.
If you're in the market, there's still a day and a half to get out, and probably more, if you can handle small losses. If you're not in the market, but still have to drive, eat, and breath, good news. In recessions and, especially, depressions, everything (except debt) is cheaper.
Hedge, buy, or sell accordingly.
--FR
Last year, the price of a barrel of crude - both Brent and WTI - began a precipitous decline, cutting in half the traded price. As 2014 turned to 2015 and many culprits were blamed (Saudi Arabia, US frackers, Russia(?), the price continued to hover in the $45-65 range. By late summer, all bets were off as the price of a barrel of crude fell into the low-$40 range, and then this month declined into the 30s.
While gas at $2/gallon and lower is a boon for drivers, especially in the US, where commuters and businesses were burdened with gas above $3.00 and sometimes over $4/gallon for years, it's not such a great deal for oil producers, especially the aforementioned frackers, whose marginal profitable price per barrel was estimated at somewhere between $45 and $75 per barrel.
Plenty of rigs have gone idle, but debt has to be serviced, and most of these drillers are on the hook for millions, borrowed from banks when the getting was good, now having to pay back the costs of exploration, drilling and extraction while operating at a loss.
The oil patch is just one element of the global liquidity crunch which may be about to enter a new, more dangerous phase, when, in two days time, the FOMC of the Federal Reserve is supposed to raise the federal funds rate for the first time in more than seven years.
The Fed plans to set the rate at 0.25% for money banks can borrow from the Fed, and, while that may not sound like a big deal to most, it certainly is to banks and corporations, which have been borrowing and spending at record paces since mid-2009.
With the FOMC rate policy decision now less than 48 hours away, there's a growing nervousness on Wall Street over this unprecedented move by the Fed. It's unprecedented because there's a vast amount of evidence that the bubble the Fed has blown is about to be not only pricked, but popped and blown wide open. Simply put, the party is about to end, and the drunks on the dance floor will be looking for a ride home, but nobody will be available for a safe trip, because not just the investment and corporate community, but the Fed itself, is staggering and woozy.
It may be a big, bad boogey man, like the 2000 scare, or the Mayan calendar, or those pesky asteroids which dare to come within 100,000 miles of dear planet earth. Or, it could be the real thing.
Nothing lasts forever, and, from the looks of the bond, commodity, and emerging markets, the long "recovery" and stock market rally seems to have run out of steam. Global trade is down, global GDP keeps being revised lower, US manufacturing is fading, China is becoming a basket case. It all points to reduced growth, or, in proper recession terms, negative growth.
If you're in the market, there's still a day and a half to get out, and probably more, if you can handle small losses. If you're not in the market, but still have to drive, eat, and breath, good news. In recessions and, especially, depressions, everything (except debt) is cheaper.
Hedge, buy, or sell accordingly.
--FR
Sunday, December 13, 2015
Climate Change Agreement: The Farce Is Strong in This One
Editor's Note: OK, this is a blog called Money Daily, which means that there should at least be a post every day. That sounds reasonable enough, but, as a writer, editor and publisher for many years (spanning the decades from the 1980s to the present), I'm old enough and wise enough to realize that - unless I'm serially unemployed (not yet, but working on it) or have no other obligations in life (sadly, I do) - writing something coherent and reasonable and, yes, maybe even stimulating and/or thought-provoking every day is a tall order.
Nevertheless, I've taken a long hiatus of about one year due to moving (twice), running another business (badly), managing a five acre property (working) and sawing and chopping lots and lots of wood to burn this winter (working on that too), and that is now at an end, mainly because I have found more free time, a renewed interest in money, economics and politics and because something inside me tells me I can long longer be silent on a growing number of issues.
To that end, I'll endeavor to put something on this blog every weekday (come on, everyone needs a weekend) and sometimes on weekends. I will do my best to write posts that are entertaining, enlightening, interesting and provocative. And, I'll go back to using my most significant and enduring signature. --FR
In Paris, France, recently, two weeks were spent by highly-paid representatives from nearly 200 countries to reach an agreement that is not binding on any of the participants, includes goals and suggestions that individual countries can choose to either accept or reject, and a vast array of proposals that are unenforceable.
This is the cumulation of the global climate change summit just ended in Paris over the weekend. It also marks the beginning of the end of the absurd notions of the "climate change" proponents. No nation would agree to a mandated agreement, particularly the United States of America, because it would have required approval from our congress, which was a dubious outcome at best.
Not to belabor the issue, the climate change agreement - hailed by Secretary of State John Kerry as "significant" on FoxNews Sunday, today - is yet another glowing example of the failed leadership in the global community. Thousands of delegates gather together to plan, prepare, eat, drink, party and come up with an agreement that is null and void from the start.
In other words, the entire exercise was a complete waste of time, energy and (using the term very, very loosely) talent. The delegates, for wasting so much time and TAXPAYER MONEY, should be docked two weeks pay. Further, the people responsible for this latest craziness - a non-binding agreement to not raise the global temperature by another degree by 2050 - should simply resign, if for only the paramount reason that they have no real clue of what they're supposed to be doing, other than possibly enriching themselves and their close business allies.
Climate change is real. The climate is always changing. There's no doubt about that. But, thinking that humans are actually causing the climate to change in any significant way, or, the ultimate hubris of thinking that they can actually do anything to fix it, is just plain stupid.
The climate change agreement is a farce. A total disgrace. Let's just be happy that the issue won't be addressed again for - from what I'm hearing - another eight years - 2023. Well, at least that's good news.
--FR
Nevertheless, I've taken a long hiatus of about one year due to moving (twice), running another business (badly), managing a five acre property (working) and sawing and chopping lots and lots of wood to burn this winter (working on that too), and that is now at an end, mainly because I have found more free time, a renewed interest in money, economics and politics and because something inside me tells me I can long longer be silent on a growing number of issues.
To that end, I'll endeavor to put something on this blog every weekday (come on, everyone needs a weekend) and sometimes on weekends. I will do my best to write posts that are entertaining, enlightening, interesting and provocative. And, I'll go back to using my most significant and enduring signature. --FR
In Paris, France, recently, two weeks were spent by highly-paid representatives from nearly 200 countries to reach an agreement that is not binding on any of the participants, includes goals and suggestions that individual countries can choose to either accept or reject, and a vast array of proposals that are unenforceable.
This is the cumulation of the global climate change summit just ended in Paris over the weekend. It also marks the beginning of the end of the absurd notions of the "climate change" proponents. No nation would agree to a mandated agreement, particularly the United States of America, because it would have required approval from our congress, which was a dubious outcome at best.
Not to belabor the issue, the climate change agreement - hailed by Secretary of State John Kerry as "significant" on FoxNews Sunday, today - is yet another glowing example of the failed leadership in the global community. Thousands of delegates gather together to plan, prepare, eat, drink, party and come up with an agreement that is null and void from the start.
In other words, the entire exercise was a complete waste of time, energy and (using the term very, very loosely) talent. The delegates, for wasting so much time and TAXPAYER MONEY, should be docked two weeks pay. Further, the people responsible for this latest craziness - a non-binding agreement to not raise the global temperature by another degree by 2050 - should simply resign, if for only the paramount reason that they have no real clue of what they're supposed to be doing, other than possibly enriching themselves and their close business allies.
Climate change is real. The climate is always changing. There's no doubt about that. But, thinking that humans are actually causing the climate to change in any significant way, or, the ultimate hubris of thinking that they can actually do anything to fix it, is just plain stupid.
The climate change agreement is a farce. A total disgrace. Let's just be happy that the issue won't be addressed again for - from what I'm hearing - another eight years - 2023. Well, at least that's good news.
--FR
Monday, December 7, 2015
Barack Obama: Gun Salesman of the Year
Just had to link to this article and post the photo.
Thanks Obama: Smith & Wesson And Sturm, Ruger Are Soaring
Thanks Obama: Smith & Wesson And Sturm, Ruger Are Soaring
Wednesday, November 25, 2015
A Message to Honest Ann
Ann, you already have the answers. I know that from previous posts of yours.
As I mentioned earlier, your own survival is paramount. Start there and move forward.
Be guided by history and the wisdom of those who have come before you.
The neocons and banksters are not your immediate concern, until you make them that.
I cannot make my point any more straightforward than to suggest you strengthen your own position and improve your immediate surroundings. You alone, nor even all of the ZH loyalists, do not have the power to dethrone the current power structure.
Aim for your own structure, your own economy. Others are doing so, though not many. Consider yourself the vanguard of a new age, because THAT will set freedom in motion.
I can only ask that you ignore the PTB. We are all ultimately responsible for our own actions.
Act responsibly.
As an aside, I have found great wisdom and guidance from reading the works of people such as John Stuart Mill, Aristotle, and recently Sun Tzu's Art of War. There are copies online of the latter. I'd suggest Adam Smith's The Wealth of Nations, but I'm stuck at page 624. Seriously, nobody should entertain to discuss anything economical unless they've read the whole thing, so there it is. I, like you, are inadequate. There's nothing stopping us, save our own human frailties, from becomeing whole.
Tuesday, July 14, 2015
Wonder: Getting Past Greece, the Euro, Varoufakis, Travie McCoy and My Best Friends (BFFs)
Wonder.
It's a beautiful word. Maybe not as beautiful a word as White or Bird (It's a Wonderful Day... it's all right, go ahead and listen), but one should always be in wonder at the world -- if only because we DO NOT KNOW.
Events of recent weeks have left some - not many, and certainly not all - bewildered, confused, and wondering what is next to come. Life in Greece has become complicated because of their commitment to debt, and that is the only reason. Not politics, not currency, but only debt has enslaved the peoples of the southern European archipelago, and only because they continue to accept it as a constant, as a commitment, a purpose, an underlying principle of existence.
Long ago, in the days of Aristotle, Plato, Pythagoras and Socrates, Greece became the cradle of Western civilization and democracy. Culture flourished with fresh ideas. Freedom of speech, freedom of identity, freedom of thought found roots, grew, and prospered.
-- Thucydides
Today, as the European Central Bank (ECB) and the IMF divvy up the remnants of a once-great culture and country, there is no secret, no happiness, no freedom. The Greeks are slaves to money, to the Euro, to the US dollar, and that condition will not change because the Greeks themselves - and all of Europe - have lost their ways, their wills, their collective courage. The 20th and 21st centuries have been witness to the willful slavery of entire populations, a kind of "Stockholm Syndrome", in which vast swaths of people are overwhelmed by money, power, greed, corruption and debauchery. It has happened before - in Rome, in London, Berlin, Tokyo - but never before has it happened as quietly and easily as today.
Without will, people have nothing. The people of Greece have no will. Even their "courageous" vote to reject the demands of their creditors a week ago was directed, will-less and rhetorical. As we have seen since then, voting meant exactly nothing, as it always has, when the choices are bad, or worse. Greece chose "bad." By decree of the technocrats and debt-holders of the EU, they are to receive "worse."
Greece Matters.
Greece matters because it is our fate, our shared existence, our future. Anyone believing that "it can't happen here," or "Greece is contained" is a dunderhead, a dolt, a fool, or a psychopath bent on escapism. The woes of Greece will visit every shore. First Europe, then South America, Australia and New Zealand, Asia, and eventually, North America. Canadians may be spared the worst of it, especially those in the hinterlands, but come it must, devour assets it must, devalue life it must. Greece is coming home to you, and me, and yours.
Not wanting to sound depressing or disheartening, but only realistic, this prose offers comfort to those who take heed. Not all is evil. There is good in the world. Life in the United States of America, for instance, has neve been more prosperous, full and enjoyable. If not for odious debt, the USA would be paradise on earth. But it is the odious debt, all $18 trillion on the official books and the countless billions in loose, unfunded liabilities such as Social Security and Medicare, that threatens with slavery of the masses. The rich will escape, virtually unharmed, The middle class will be skimmed, as always, without protection. The poor will suffer.
Central banks, which control the capital, have offered solutions. BUY STOCKS. WITH BOTH HANDS. Since March of 2009, Money Daily has been right to some degree, but wrong on a large account, decrying stocks as risky, unsound, unfair, unfulfilling, and dangerous.
Stocks, verily, the riskiest of them all, have never been more wildly valued, but they also have never been more protected than today. An article by John Hussman, here, spells out the current conditions for investment opportunities in lurid detail. While Greece may, and likely, will, get a haircut proportional to that of former Finance Minister Yanis Varoufakis (a complete sellout and traitor to the people of Greece), the remainder of the world does not have to suffer a similar fate.
One only has to play along with the monetary authorities and the central banks for a time, and then... release. Such an investment strategy will require a heavy doses of discipline, and certain timing, which is why most will not even try, and many of those who do will try and fail, and fail, and fail.
The lucky, the daring, the living, and the brave will survive, and prosper, but only if they act boldly, with the conviction in their heart that all is fleeting, money is worthless, and hard assets are still worth having. The single most important asset one can hold, now, and generally, throughout history, is LAND. Real Estate. It's called that because it is REAL and it is an ESTATE asset. The only liability to owning real estate is taxation, which is why the choice of purchase should be well considered, and, beyond living quarters, consist of raw acreage.
Silver and gold one can hold in one's hand, but they cannot produce a single carrot, potato, bean or spinach.
It would also be wise to have good friendships, and to nurture them, cherish them, and honor them. Good friendships will outlast all manners of currency or money, bring more joy and happiness than blood relationships, and sponsor more spiritual wealth than all the gold that even King Midas could conjure.
Good friendship is why I write, why I live, why I try to spread some wisdom, if there is any to be spread.
I have three friends. Two are dogs. The other... I leave to the imagination of the reader.
Go now. Buy stocks, and prosper. Even better, play options or bet on horses. Use massive leverage if it is available. If you lose, you can blame me, because I don't actually care. I will only be here a short while. Besides, there are countless methods for recovery. The central bankers have made it as easy as a day at the beach.
I urge everyone to become self-sufficient. Some solar power and a garden are requisite to peace and happiness.
It's a beautiful word. Maybe not as beautiful a word as White or Bird (It's a Wonderful Day... it's all right, go ahead and listen), but one should always be in wonder at the world -- if only because we DO NOT KNOW.
Events of recent weeks have left some - not many, and certainly not all - bewildered, confused, and wondering what is next to come. Life in Greece has become complicated because of their commitment to debt, and that is the only reason. Not politics, not currency, but only debt has enslaved the peoples of the southern European archipelago, and only because they continue to accept it as a constant, as a commitment, a purpose, an underlying principle of existence.
Long ago, in the days of Aristotle, Plato, Pythagoras and Socrates, Greece became the cradle of Western civilization and democracy. Culture flourished with fresh ideas. Freedom of speech, freedom of identity, freedom of thought found roots, grew, and prospered.
The secret of happiness is freedom. The secret of freedom is courage.
-- Thucydides
Today, as the European Central Bank (ECB) and the IMF divvy up the remnants of a once-great culture and country, there is no secret, no happiness, no freedom. The Greeks are slaves to money, to the Euro, to the US dollar, and that condition will not change because the Greeks themselves - and all of Europe - have lost their ways, their wills, their collective courage. The 20th and 21st centuries have been witness to the willful slavery of entire populations, a kind of "Stockholm Syndrome", in which vast swaths of people are overwhelmed by money, power, greed, corruption and debauchery. It has happened before - in Rome, in London, Berlin, Tokyo - but never before has it happened as quietly and easily as today.
Without will, people have nothing. The people of Greece have no will. Even their "courageous" vote to reject the demands of their creditors a week ago was directed, will-less and rhetorical. As we have seen since then, voting meant exactly nothing, as it always has, when the choices are bad, or worse. Greece chose "bad." By decree of the technocrats and debt-holders of the EU, they are to receive "worse."
Greece Matters.
Greece matters because it is our fate, our shared existence, our future. Anyone believing that "it can't happen here," or "Greece is contained" is a dunderhead, a dolt, a fool, or a psychopath bent on escapism. The woes of Greece will visit every shore. First Europe, then South America, Australia and New Zealand, Asia, and eventually, North America. Canadians may be spared the worst of it, especially those in the hinterlands, but come it must, devour assets it must, devalue life it must. Greece is coming home to you, and me, and yours.
Not wanting to sound depressing or disheartening, but only realistic, this prose offers comfort to those who take heed. Not all is evil. There is good in the world. Life in the United States of America, for instance, has neve been more prosperous, full and enjoyable. If not for odious debt, the USA would be paradise on earth. But it is the odious debt, all $18 trillion on the official books and the countless billions in loose, unfunded liabilities such as Social Security and Medicare, that threatens with slavery of the masses. The rich will escape, virtually unharmed, The middle class will be skimmed, as always, without protection. The poor will suffer.
Central banks, which control the capital, have offered solutions. BUY STOCKS. WITH BOTH HANDS. Since March of 2009, Money Daily has been right to some degree, but wrong on a large account, decrying stocks as risky, unsound, unfair, unfulfilling, and dangerous.
Stocks, verily, the riskiest of them all, have never been more wildly valued, but they also have never been more protected than today. An article by John Hussman, here, spells out the current conditions for investment opportunities in lurid detail. While Greece may, and likely, will, get a haircut proportional to that of former Finance Minister Yanis Varoufakis (a complete sellout and traitor to the people of Greece), the remainder of the world does not have to suffer a similar fate.
One only has to play along with the monetary authorities and the central banks for a time, and then... release. Such an investment strategy will require a heavy doses of discipline, and certain timing, which is why most will not even try, and many of those who do will try and fail, and fail, and fail.
The lucky, the daring, the living, and the brave will survive, and prosper, but only if they act boldly, with the conviction in their heart that all is fleeting, money is worthless, and hard assets are still worth having. The single most important asset one can hold, now, and generally, throughout history, is LAND. Real Estate. It's called that because it is REAL and it is an ESTATE asset. The only liability to owning real estate is taxation, which is why the choice of purchase should be well considered, and, beyond living quarters, consist of raw acreage.
Silver and gold one can hold in one's hand, but they cannot produce a single carrot, potato, bean or spinach.
It would also be wise to have good friendships, and to nurture them, cherish them, and honor them. Good friendships will outlast all manners of currency or money, bring more joy and happiness than blood relationships, and sponsor more spiritual wealth than all the gold that even King Midas could conjure.
Good friendship is why I write, why I live, why I try to spread some wisdom, if there is any to be spread.
I have three friends. Two are dogs. The other... I leave to the imagination of the reader.
Go now. Buy stocks, and prosper. Even better, play options or bet on horses. Use massive leverage if it is available. If you lose, you can blame me, because I don't actually care. I will only be here a short while. Besides, there are countless methods for recovery. The central bankers have made it as easy as a day at the beach.
I urge everyone to become self-sufficient. Some solar power and a garden are requisite to peace and happiness.
Thursday, June 25, 2015
The Buy More, Pay More Non-Economy of Oversupply
Rampant stupidity.
Cars and trucks are not the only commodity that is in oversupply.
Went to the local grocery the other day and wanted one of those "salad in a bag" deals. Sign said, "Buy 1 get 2 free." Since I am single, and camping for the summer, one bag is all I needed and the other two would likely go bad within days. Price for the "deal" was $3.89. These bags normally go for $1.25-1.50 each, so no big deal.
Went to the manager and complained. Ended up buying one bag for $1.30, but, but, but, I had to sign a non-disclosure statement and produce my driver's license. Additionally, I was banned from ever shopping in the store ever again upon threat of death or incarceration.
OK, everything after the $1.30 in that last sentence is there for pure entertainment value, but I did have to check out at the customer service desk and received an undeniable, disparaging glare from the store manager (owner). The twithead didn't even have the cajones to introduce himself or talk to me; just a mean stare, as if to say, "you're not supposed to be smart or question our pricing policies."
My take is that the new brand of "Shure-fine" salad bags which replaced the "Dole" bags are in severe oversupply and the store is wishing to unload them ASAP because they don't keep longer than a few days before spoiling. Trouble is, we're deep in farm country here and every other house has a garden and probably are producing more than enough of their own lettuce and vegetables.
So, oversupply from the good folks at Monsnto, Cargill, et. al., and "no salad for you" unless you buy lots of it.
Oversupply is "the" problem of the 2010s. We are in year six or eight of a 15-18-year depression and it's likely to get worse before it gets better.
In 2012, I said I'd wait until silver hit $17 to buy more. Acutally waited until it hit $15. My next purchase will be at $12, then maybe $6, when the bottom falls completely out of the oversupplied commodity market.
In Ameri-whoopie-i-o-yah-Ka, at least, we have too much of everything except common sense (h/t to Mencken).
The soon-to-be-rammed-down-our-throats-job-killing TPP will accelerate the process of bringing American wages in line with the rest of the planet. Cops, politicians, bankers and schoolteachers will be wealthy in coming years, but as many begin to retire, the defaults on pensions will also accelerate.
Can't fix stupid and can't beat math. A rigid dichotomy, for sure.
All the best. Eat well, live well, die hard.
Editor's Note: Fearless Rick has been and continues to spend the summer months camping at a secret location (Sodus, NY) and will be posting irregular snippets about life in farm country.
Cars and trucks are not the only commodity that is in oversupply.
Went to the local grocery the other day and wanted one of those "salad in a bag" deals. Sign said, "Buy 1 get 2 free." Since I am single, and camping for the summer, one bag is all I needed and the other two would likely go bad within days. Price for the "deal" was $3.89. These bags normally go for $1.25-1.50 each, so no big deal.
Went to the manager and complained. Ended up buying one bag for $1.30, but, but, but, I had to sign a non-disclosure statement and produce my driver's license. Additionally, I was banned from ever shopping in the store ever again upon threat of death or incarceration.
OK, everything after the $1.30 in that last sentence is there for pure entertainment value, but I did have to check out at the customer service desk and received an undeniable, disparaging glare from the store manager (owner). The twithead didn't even have the cajones to introduce himself or talk to me; just a mean stare, as if to say, "you're not supposed to be smart or question our pricing policies."
My take is that the new brand of "Shure-fine" salad bags which replaced the "Dole" bags are in severe oversupply and the store is wishing to unload them ASAP because they don't keep longer than a few days before spoiling. Trouble is, we're deep in farm country here and every other house has a garden and probably are producing more than enough of their own lettuce and vegetables.
So, oversupply from the good folks at Monsnto, Cargill, et. al., and "no salad for you" unless you buy lots of it.
Oversupply is "the" problem of the 2010s. We are in year six or eight of a 15-18-year depression and it's likely to get worse before it gets better.
In 2012, I said I'd wait until silver hit $17 to buy more. Acutally waited until it hit $15. My next purchase will be at $12, then maybe $6, when the bottom falls completely out of the oversupplied commodity market.
In Ameri-whoopie-i-o-yah-Ka, at least, we have too much of everything except common sense (h/t to Mencken).
The soon-to-be-rammed-down-our-throats-job-killing TPP will accelerate the process of bringing American wages in line with the rest of the planet. Cops, politicians, bankers and schoolteachers will be wealthy in coming years, but as many begin to retire, the defaults on pensions will also accelerate.
Can't fix stupid and can't beat math. A rigid dichotomy, for sure.
All the best. Eat well, live well, die hard.
Editor's Note: Fearless Rick has been and continues to spend the summer months camping at a secret location (Sodus, NY) and will be posting irregular snippets about life in farm country.
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