Wednesday, December 1, 2010

12/1 Daily Commentary

I sold the ZSL at 11.90 waiting on a final rally in silver to 29+.
I don't own any common stock, preferred stock, bonds, or other instruments for any more than brief periods.  All of these instruments reflect and sustain the current financial system operating throughout the world.  Last month I made good money shorting silver and crude and buying the dollar.  Last month I sold most of my gold and silver, having enjoyed a 4-fold increase over the prior 6 years.  I also have scaled back my trading.  This blog only gets a couple of updates daily because in my mind I am short-term bullish and long-term ultra-bearish stocks and commodities.   My forecast of the stock market uses I1 to create an ascending triangle with an eventual upside breakout to cap this orgasm of fiat manipulation.


I have a philosophical discussion point.  Historically people have posited good with virtues and evil with vices.  To me virtues are sustainable, life-supporting habits that benefit not only the individual possessing them but the whole society.  Conversely vices are addictions that require ever-increasing doses in order to derive pleasure.  Vices are destructive to the individual and to the whole society.  If I subject most people with stresses they will eventually break down into vice and dishonest behavior because most people have no fundamental beliefs.  The existence of a demon underlying these behaviors has been with humanity since at least Moses.  Debt is one of the devil's tools and is insidious and relentless.  It has ruled mankind on a logarithmic spiral for over 70 years in the U.S., 50+ years for most of the remaining nations, and individual societies periodically throughout history.  It has destroyed virtuous behavior and rendered thrift obsolete.  Governments started the cycle and individuals caught on, corporations are now predominantly focused on short-term results, and consumer spending accounts for the vast bulk of western economic activity.  Governments, corporations, and individuals are riddled with corruption.  Polishing each other's shoes is now an acceptable economic model with debt the grease that keeps the engine going.  This worldwide evil is now reaching a crescendo, sustained by the incredible leverage of post-crisis government and central bank actions.  The Fed runs out of gas by June.  I'm betting March will be the turning point.

12 comments:

  1. Gee, I hope you're not drafting your annual Christmas letter.

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  2. Merry Christmas, y'all. My revulsion for fiat money knows no bounds.

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  3. Steve I'm sickend by this whole thing as you are...this is an actual headline on cnbc "Cramer: Make Money...By Believing in Ben Bernanke".

    Forget about innovation, productivity, etc. just believe in the never ending supply of fiat money and everything will be fine!

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  4. Virtue, vice, and demons are best left to the realms of the unreal, where they belong. As for your financial assessment, perhaps the I1 tool provides additional insight, and your "when" could well prove prescient.

    The bigger issue is that fed actions taken today increase the risk of a derivatives collapse tomorrow. Bernanke, and by association the ibanks, all think they have it under control. If history is any guide, they will all be proven spectacularly wrong. The end result of their collective failure is a global nuclear war.

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  5. Vice is an accelerating addictive syndrome. The old-timers associated this collapse with demons. I don't.

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  6. Just to add some flavor to this topic, if the 10 yr bond yield closes under 2.48% this month i will have a monthly bond sell signal with a potential december low of 2.33% or under. It doesn't seem likely, but could align nicely with Steve's breakout after some more consolidation this month. Just need one more big-time panic for that I suppose. Dramatically rising yields could go hand in hand with a rising market. I have roughly six up months before i would get a sell signal on the S&P which puts the turn around April/May or front-running the Fed in reverse.

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  7. Great post, Steve. Keep 'em coming.

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  8. Incicive commentary, Steve. Thanks.

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  9. Steve, Daneric posted some excellent LT charts last night, suggesting things were lined up for a P2 top at roughly 1250 later this month. One of his rationalisations was a 13-3-5 Fib sequence on the monthly for A-B-C of his P2.

    Given your thoughts above would you suggest this is more likely to extend to a 13-3-8 ending in March on slowing momentum etc, as the fiat model dies a slow and painful death?

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  10. Christmas catastrophy¡I am believe in december the big boys want a BIG CRASH.Spain is wrong and kill economy,Europe is a crazy.
    Regards.28 december is my day for a lower lower.

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  11. Steve

    Sure looks like a completion of a wave 2 down in the DJIA and SPX then a wave 4 up. Still holding on short by the skin of my teeth. The devil made me do it.

    Jack C

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  12. Jack,
    That bastard's in us all, eh?

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