Coin Crazy

Some ding dong on eBay spent over $3000 for a modern silver Yosemite silver coin graded MS69 by PCGS (shame on them for grading this stuff). News of this transaction has spread rapidly. The online coin news service Coinzine was essentially the first to bring this to my attention. Today I spoke with some good friends who are luminaries in the coin industry and they too were aware that this transaction had taken place.

All I can say is do not not squander your money on this sort of stuff. Email me for guidance on real rarities. Always pay as close to bullion price as you can for something you deem as collectible.

Conditional Buy on Stocks Part 64

I realize that I sound like a broken record, or as some people would say in derogatory fashion: a QE-tard. Let's face it folks, where the stock market is concerned the game is rigged by billions and billions of dollars that are regularly deployed by the Wall Street evildoers thanks to POMO. Yes, one day it will end badly and perhaps with inadequate notice but for now the fed is your friend as we approach Dow 12,000. Woo hoo.

Believe me, I am not wearing my daughter's cheerleading outfit. I really despise why and how the market is being manipulated higher. In many ways the ongoing ascent of stocks defies all imagination and sensibility. More and more folks have been coming out of the woodwork in recent days to proclaim that doom in the market will soon be upon us. I take this almost as a contrary indicator as long as there is QE. Ben Bernanke et al are having a wonderful time thumbing their noses at the Bears, or really those who are simply seeking some sort of rational criteria for what makes stocks go up and what makes them go down. It is never a bad idea to have some out of the money puts or some other hedge against a breakdown within one's portfolio, but that would be for hedging purposes and not for the exercise of essentially stepping in front of a locomotive.

Should some sort of warning sign emerge, we'll be sure to let you know or perhaps we will be just as surprised as everyone else when/if the market becomes unglued.

Conditional buy on stocks continues

No change here. With each passing day in the markets, we will continue to see the Fed do the same thing: injecting money, funny money that is, into the financial system via Quantitative Easing. It's such a simple formula that even a young chimp could do well in the stock market. This manipulation of the markets has worked like a charm. We finished the week with the Dow up for seventh week in a row.  the key basic rule remains: don't fight the Fed. Many a short selling "pro", or hotshot has been severely tested and burned by the bald headed and bearded man in Washington. I love watching the shorts ridicule the :"QE-tards" as the shorts like to call the longs, but thus far the bulls have been winning hands down - not even close. LOL.

QE will end badly someday. Remember, I have made no secret of my disdain for QE but for as long as it goes on it's happy days down on Broad and Wall. Yes, I recognize that all good things eventually come to an end. Eventually, Wall Street's free lunch money will come to an end. But when this will happen is a great unknown. The present round of QE is projected to last through the summer. Once we get to that point I fully expect the Fed to proceed with another round of QE. As Jim Sinclair of the famed JS Mineset website would say: QE to infinity. This is a game that will last for a very long time. Trillions more of QE is on the way over the next few years, or at least until the November 2012 election,

I am anticipating that Wall Street's upward slog will continue with the requisite bumps along the way until the QE picture dramatically changes. IMHO it will take a large dose of sudden doom to derail the QE effect on stocks. Again people this is not rocket science, it is the buying and selling of stocks where certain overriding factors must be recognized.

A Floor for Gold - Made in China

There has been a scandal of sorts brewing over gold and silver short positions held by JP Morgan and HSBC. The two banks are massively short these metals and would never be able to deliver on their contractual obligations due to limited supply of the physical metals. Many a gold and silver bull has long been dreaming of a short squeeze to bring both banks to their knees. Some have resorted to a "put JP Morgan out of business - buy silver" campaign on the net.The Commodities Futures Trading Commission (CFTC) has served up a bit of bad news for those wishing for the demise of JP Morgan et al. Essentially, the commission has voted to leave JP Morgan in a cat bird's seat of not having position limits apply to the giant bank. The vote wasn't even close. It was 4 to 1 against limiting the amount of positions. So, as usual JP Morgan and friends win again. Surprised? Lol. 

Time to simply move on from that effort. The banks will win all of the time in terms of rule making in these exchanges where they hold large positions. If things don't go their way they change the rules leaving you to hold the bag. Business as usual. In these markets there is something to be said for taking profits too soon. This is why I never endorse playing around in these exchanges unless you know what you are doing! Physical, in your possession, is the best way to go. If you do not like the volatility of bullion, then it is obvious that you should invest in rare coins.

The carnage of recent days in the gold and silver markets could be worse. But here is the rub - it's something called the Asian put that will keep gold and silver from melting down; the bears will be denied. Simply stated, no matter how hard bearish interests try to pummel gold and silver those efforts will be met with buying demand from Asian investors. I believe that the bottom will soon be in for gold and silver thanks to this Asian put.

In Hong Kong, demand for gold has soared by up to 50%, according to local reports, for gold bars of the kilo size variety. This sudden increase in demand has caused local prices to move three dollars above the spot price, highlighting the tightness of the physical gold market in other parts of the world. The Financial Times of London warns however that the market could cool down due to the Chinese holiday in early February. That would only be temporary, of course, as the fact of the matter remains that gold demand in the US does not operate in a vacuum. It is actually self defeating for certain US interests to undermine precious metals prices as it only enables US competitors to buy those metals more cheaply.

Unemployment remains at over 16%

Unemployment: The real figure is 16.6% in December, up from 16.3% in November. This is the U-6 figure from the labor department that non delusionalists use. This 16%+ figure is corroborated by the Labor force participation rate plunging to a multi year low: 64.3%. Pay no attention to the fools heralding a 9.4% UE rate.

Do What Works - Commodities

This blog and especially the old subscriber newsletter (now closed to new subs) had a great 2010. In my own quiet way I endosed the commodities world. Stick with them.

Palladium vs platinum is still relatively low and that will drive demand for PA by the automakers.
Silver is only getting re-started. Gold will perform well. Ag related commodities will remain the place to be. Energy will also continue strong, Eventually even Nat gas will play catchup.

Stock gains, to be honest, were superior over recent years, BUT still woefully under performed the commodities world. Via Finvez.  The proof is in the pudding....

Stocks Remain on Conditional Buy Signal

The condition being that master financial pimp, Ben Bernanke, continues with the presto money creation. I'd bestow an "uncle" Ben, but that would be offensive to the good members of the Uncle-hood. Pimp is more like it (the harlots being his cabal of banks). LOL.

It's true dat (a little city street lingo for ya) the upward climb in the S&P 500 slowed in December to a .1% gain. And, yes, it's true that a variety of technical market indicators are flashing red signals, BUT QE is still an active force supporting stocks. Yes, I still hate QE, but it must be recognized. Just think of it, billions, trillions in new money to get an 11% gain out of SnP last year, and still gold was up nearly 30%. Nice job there Washington financial sickies.

Yes, I believe this whole scheme is going to flame out in some nasty way , but for now the market is likely to try to wiggle higher as the minions on Wall Street worship their gods at the Fed who think they are really creating something out of nothing. Let's also see, for example, if the year- beginning retirement fund shenanigans bring any additional loving to the stock market. Should the market take on a more serious wheeze this month in the face of seasonal and extraordinary props, take further action to protect your gains.

Conversely, if the Dow ratchets up to 12K in short order, I'd also be a bit concerned about the mother of all overbought situations. But hey with this QE, anything is possible.

Silver!

When I did business reports on 1010 all newsradio WINS in NewYork, I once forgot to mention the silver price. The newsroom was flooded with calls. At the time that station had several million listeners a week, so it was natural that if something bothered even a fairly small segment of the audience, the phones would get flooded,

I have no doubt that silver will be a scene stealer in 2011 and will attract more interest.

This nice little video was done $9 ago when silver was at $21/oz. So it's a little outdated, but the overall theme has not changed.

Metals outshine in 2010

They are likely to explode this year.

I was pre occupied with sounding the word on getting into gold in 2010, also in 2009 and before. Random House even let me write a book on the subject (Google: "Kingsland Metals Book"). And YES, gold more than doubled the performance of the S&P 500 stocks (more so for silver) in 2010. All I can say for 2011 is, 'you ain't seen nothing yet!'