Global Currency

Here it is...And all the players are lining up.

Those of you on fixed incomes with bonds, annuities etc had better pay attention. The central planners have already figured the only way to pay for this experiment is to devalue all of this debt (which is bonds etc)

It did not help that the auction today was soft. Seems the world is getting tired of our debt.

Here comes the devalue. Better take care.

Where's the bear?

Many folks are wondering just where the ravaging bear is right now. Remember some of the largest gains are in secular bear markets. Taking a look at the chart we can see this secular bear started in 2000. The average secular bear has been 18 years. So you can see this ne is still in the infancy stage. So we wait patiently for the inevitable rally back to a regular descending line to take another position. Now this could be fro a huge rally, of just going nowhere for months.
Hope this helps.

World Currency

We spoke on this subject a few weeks back. Now Russia and China are climbing on board.

What this does is basically do away with debt. So those holding dollar debts are converted into the new world currency. Whatever value they place on it.

This will definitely dissolve debts, but the debtors are going to take it in the shorts. This will make gold the true world currency. Once the dollar is no more the reserve currency, it can drop out of site.

We spoke of this being the only way to dispose of the trillions without bankruptcy. But then bankruptcy is really what you are doing. Kind of like when a company files for bankruptcy, the old shares are done away with wiping out shareholders. Now the bond holders receive the new shares, selling them on the markets to new investors.

This is what will happen should we adopt a world currency (which looks likely)

Fixed income investments are going to get clobbered.

Last weeks actions

Now the talking heads will be all over this. Is the bottom in? Are we there yet? Best buying opportunity in a generation etc.

One thing to remember in bear markets. You will see some of the most spectacular rallies.

My SPY puts (88,89,85,84,82) etc are so far in the money I cannot believe it. Even after the 9% rally last week. The perfect thing to happen would be for another week like last week. That would give me the perfect storm. But as anyone that has traded for more than one bear cycle, you rarely get what you want or expect. You need to trade what is given to you. Right now the bear is growling big time.

Stay tuned (or watch for the newsletter) some ideas on this weeks trading opportunities.

Webinar

Sorry everyone, we had technical problems.

6 more days like today

and we will be at the target of 500 or so.

This meltdown is happening far faster than I had even imagined. 2 years ago (for those that remember) when we were talking about all of this hitting the fan, the very thought of a Dow at 4000 or S&P at 500 was laughable. Now 500 S&P may not be low enough.

The real problem now will be that the masses have lost all of this and expect it to just bounce back as in all the other sell offs the last 70 years. But the big concern is that it may just take another 20 years to get where we were. I doubt many have that much time.

Not to worry, we will find ways to make the gains we have all (well at lest those that have been involved around here) become accustomed to.

The best thing you can do for the masses now is to help them see how they can make back those losses. Not now. But when the bottom if finally in.

An up day

Looks like today will finish to the upside. We still have 4 hours as I write this.

This is good news for me. I have cash on the sidelines waiting to get in, but not at these levels. I expect more downward pressure, but I want a nice rally to get short positions. So a day like to day makes me take notice.

I am still looking for a 500 S&P and 4000 dow. But it does not go straight down. the rally gives us a Chance to get into position. Now I know you will hear otherwise, so do what you will, but this rally is not the bottom. (In my humble opinion)

I am looking to get long SPY puts out to the first of the year and sell the short months. Depending on what the price is when I enter, I may be for 5 point strikes.

Not looking good

AIG is at the trough once again. No end to these bailouts.

The stress is showing in the government. Bids to insure government debt has skyrocketed. What this means is that with all of the bailout we have done, investors are now concerned about the solvency of the U.S.

This is not good at all. Now when the treasury auctions this horrific debt coming due, the rates will shoot to the moon. That is the only way investors will grab the debt.

So Uncle Ben can lower rates to zero and it will not work.

Credit is going to get ever so expensive (if you have not had your credit card interest increased, it will....). Just when the central planners were wanting to "thaw" the credit markets.

These are fun times if you have been on the right side. If not, it has (and will continue to be) very frightening.