We should know direction soon....

Model Portfolio Update - 12/10/2009

For some reason or another the website I use to manage my model portfolio has changed their policies. I will now have to use another site, through facebook (yeah I know), to manage the portfolio. I will have to reestablish my positions for the coming down move, so this could take awhile. Anyway, there is some good that has come out of this. I can continue to use a portfolio that I have been managing for awhile on facebook, so my track record is a little longer and easier for you to evaluate.

Here is the link to the new portfolio:

http://apps.facebook.com/kaching/portfolio/516251517/holdings

Market Update:

Nothing has really changed. The market seems to be grinding away in a distribution phase. We are either forming a rounded top or are setting ourselves up for one more push higher. If we do push higher I believe it will be with force, but it will be short lived. I will maintain my short positions, as I don't see any remaining upside being to dramatic. Hold on. I smell something big brewing in the coming weeks.

Potential Causes of Crisis:

-Sovereign default (Dubai, Greece, Spain, Latvia...etc..)
-Weak holiday sales figures
-Federal Reserve tightening monetary policy (reverse repurchase agreements)

Something is brewing. Investors are at complacency levels not seen since the top in October 2007 and nothing has changed to fix our economy. We slapped a band-aid on the bleeding last fall. However, that band-aid can only last for so long. The following chart shows exactly why it is ludicrous to think that we are out of this mess. Deleveraging is nasty, and it hasn't even started yet.

Really, where do you think the spending is coming from to prop us this economy? It sure isn't coming from you and I. It is coming from the government. Have you noticed the explosion in Federal and State contracts? This is how the economy is staying alive. What happens when the government can't borrow anymore money to spend? China already doesn't want to loan us anymore. I don't really think the oil states do either. Check out this chart. Once our credit card is cut off and the federal spending stops we are in for a rude awakening.

Total Federal Government Debt

Quote of the day...

Paying taxes is necessary to remain free; don’t confuse this with slavery where people have to purchase their freedom…

Money as Debt 2!!!

If you like the earlier post of Money as Debt here is Money as Debt 2....

Update on U.S. Dollar

Things are going as planned....

Here is an update of the U.S. Dollar chart I posted a few weeks ago. I had called for a continued fall in the dollar to the uptrend line. Looks like that was dead on. We are now sitting on that uptrend line.

U.S. Dollar Index

A turn in the dollar is imminent. With the turn in the dollar will come a turn in the stock market and we will position ourselves accordingly with a long position in the dollar and short positions in the stock market.

Don't Fear Speaking Out Against The Government

"There is no nation on earth powerful enough to accomplish our overthrow. Our destruction, should it come at all, will be from another quarter. From the inattention of the people to the concerns of their government, from their carelessness and negligence. I must confess that I do apprehend some danger. I fear that they may place too implicit a confidence in their public servants and fail properly to scrutinize their conduct; that in this way they may be made the dupes of designing men and become the instruments of their own undoing."

-Daniel Webster

Maybe we, Americans, should take a cue from Representative Joe Wilson. We need to speak out against our government. There is something clearly wrong in the country. The monetary system is by far the greatest fraud perpetrated upon the American people in history. As evidenced by this video:





We need to stand up and demand change. A reform of the monetary system could make it possible for everyone to have a chance in life. It could end our national debt. It could potentially end poverty in the United States (without paying taxes for welfare). It could also end the needs for 40% tax rates. No longer would we have to lose our wealth through both taxes and inflation. Let's return to the sound money of the Constitution.

There is a reason the Founding Fathers set up our money system the way they did.

Here is where it says in the Constitution that the powers the Federal Reserve exercises are unconstitutional and downright illegal:

Article 1. Section. 8. The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

• To borrow Money on the credit of the United States; (Congress does this, but so does the Federal Reserve...a PRIVATE banking institution)

• To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures; (Congress does not have the power to coin our money anymore...The Federal Reserve does...a PRIVATE banking institution, and they charge us interest to use our OWN money!!!)

• To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years; (How long have we been in Afghanistan and Iraq? 6 years going on 7? Wow!!)

Article 1. Section . 9. No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time. (First of all, The Federal Reserve has NEVER been audited. The Federal Reserve, on a daily basis, prints and distributes U.S. dollars all over the world. In one instance, detailed by the video below, The Federal Rerserve gave $3,000 dollars for every man, woman, and child in New Zealand to the Central Bank of New Zealand.)





Article 1. Section 10. No State Shall...coin Money; emit Bills of Credit; make anything but gold and silver Coin a Tender in Payment of Debts.... (Granted, carrying gold and silver is a hassle, but a dollar bill can easily be back by gold or silver. President Kennedy tried it in 1963, check out executive order 11110, dollar bills today are not backed by anything, they are debt created out of thin air by a bank, watch the video if you do not understand this.)

Our Founding Fathers warned us about always protecting the control of our money. They hated central banking with a passion and feared it. Were their fears founded? Did they have a reason to hate the banks? I think so. As evidence I give you these quotes to consider:

"And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale."

-Thomas Jefferson

"The refusal of King George III to allow the colonies to operate an honest money system, which freed the ordinary man from the clutches of the money manipulators was probably the prime cause of the revolution."

-Benjamin Franklin

"The bold effort the present (central) bank had made to control the government ... are but premonitions of the fate that await the American people should they be deluded into a perpetuation of this institution or the establishment of another like it."

-Andrew Jackson

"If Congress has the right under the Constitution to issue paper money, it was given to be used by themselves, not to be delegated to individuals or corporations."

-Andrew Jackson

"Most Americans have no real understanding of the operation of the international money lenders. The accounts of the Federal Reserve System have never been audited. It operates outside the control of Congress and manipulates the credit of the United States"

-Sen. Barry Goldwater (Rep. AR)

"This [Federal Reserve Act] establishes the most gigantic trust on earth. When the President [Wilson} signs this bill, the invisible government of the monetary power will be legalized....the worst legislative crime of the ages is perpetrated by this banking and currency bill."

-Congressman Charles A. Lingbergh Sr., 1913

"We have, in this country, one of the most corrupt institutions the world has ever known. I refer to the Federal Reserve Board. This evil institution has impoverished the people of the United States and has practically bankrupted our government. It has done this through the corrupt practices of the moneyed vultures who control it".

-Congressman Louis T. McFadden, 1932

"We are completely dependent on the commercial banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system.... It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon."

-Robert A. Hamphill, Atlanta Federal Reserve Bank

"The regional Federal Reserve banks are not government agencies. ...but are independent, privately owned and locally controlled corporations."

-Lewis vs. United States, 680 F. 2nd 1239 9th Circuit 1982

Let's stand up and do something about this diabolical institution!! Vote for Ron Paul in 2012!!

We need to End The Fed!!!

http://endthefedusa.ning.com/ - End The Fed website

http://www.govtrack.us/congress/bill.xpd?bill=h111-1207 - Support Ron Paul's Audit The Fed Bill, call your congressman and demand cosponsorship!!!

Everyone in the world needs to watch this video

The understanding of the facts portrayed in this video is by far the most important thing needed to save this country. I encourage everyone to watch this video and show it to those who you care about. It is not political, it is just the facts. Our country, and the world for that matter, are slaves to the banks. If you think I am lying, then watch the movie and we can debate it. Please. Educate yourself. You'll be glad you did.

"The inability of the Colonists to get power to issue their own money permanently out of the hands of George III and the international bankers was the PRIME reason for the Revolutionary War."

-Benjamin Franklin

Six Articles Showing The "Recession" Isn't Ending

• One Sixth of All Construction Loans in Trouble (MISH)
  
• FDIC Proposes Six-Month Extension for Debt Guarantees (Bloomberg)
• Record drop in consumer credit outstanding in July (Wells Fargo)
• Food Stamps Reach 33.8 Million in April, 5th Consecutive Monthly Record (MISH)
  
• The Fed Can't Monitor 'Systemic Risk' (WSJ)
• Greenspan, "Market Crisis Will Happen Again" (MISH)

Chart of Job Losses in Post WWII Recessions (MISH)

Excerpt from: Greenspan, "Market Crisis Will Happen Again" (MISH)

However despite his belief in a brighter future, the former Fed chief did warn that the path to recovery should steer clear of protectionism as applying strict regulations could hamper recent developments that have opened up global trade.

"The most recent endeavour to re-regulate is a reaction to the crisis. The extraordinary impact of these global markets is making a lot of financial people feeling they have lost control.

"The problem is you cannot have free global trade with highly restrictive, regulated domestic markets."

Ding Ding Ding we have a winner. Greenspan is correct "you cannot have free global trade with highly restrictive, regulated domestic markets."

And what bigger regulation is there than the Fed itself? The answer is "none". The Fed micro-mismanaged this crisis by its manipulative interest rate policies. Yet for all his faults, and Greenspan has many, the one thing he has consistently gotten correct is his stance in support of free trade.

Indeed, one of the biggest risks now to the global economy is a huge round of protectionism. Unfortunately, it's probably only a matter of time before Congress overreacts. That's human nature, Congressional style.

Blamed by some for not doing more to prevent the crisis, Mr Greenspan denied any responsibility for the problems gripping the global economy. "It's human nature, unless somebody can find a way to change human nature, we will have more crises and none of them will look like this because no two crises have anything in common, except human nature."

Human nature is is what allows people like Greenspan to never see their own role in the mess they created. It's human nature to blame someone else. The way to get Greenspan and Bernanke out of the way so that their "human nature" does not add to the problems is to abolish the Fed.