Every single day more Americans fall into poverty. This should deeply alarm you no matter what political party you belong to and no matter what your personal economic philosophy is. Right now, approximately 100 million Americans are either “poor” or “near poor”. For a lot of people “poverty” can be a nebulous concept, so let’s define it. The poverty level as defined by the federal government in 2010 was $11,139 for an individual and $22,314 for a family of four. Could you take care of a family of four on less than $2000 a month? Millions upon millions of families are experiencing a tremendous amount of pain in this economy, and no matter what “solutions” we think are correct, the reality is that we all should have compassion on them. Sadly, things are about to get even worse. The next major economic downturn is rapidly approaching, and when it hits the statistics posted below are going to look even more horrendous.
Thursday, July 26, 2012
WASHINGTON, July 24 – Congressman Ron Paul today applauded the passage by the House of Representatives of H.R. 459, the Federal Reserve Transparency Act. The bill, which calls for a full audit of the Federal Reserve System– including its lending facilities and critical monetary policy operations– passed overwhelmingly by a bipartisan vote of 327-98.
“I am very pleased that the House passed my Audit the Fed legislation today,” Congressman Paul stated. “It has been a long, hard fight, but Congress finally is getting serious about exercising its oversight responsibility over the Federal Reserve. Auditing the Fed is a common sense issue supported by the overwhelming majority of the American people. The Fed’s trillions of dollars worth of asset purchases and its ongoing support of foreign central banks cannot be allowed to continue without Congressional oversight. Today’s passage of H.R. 459 is a good first step towards full Fed transparency, and I hope that the Senate will consider the bill before the end of the year.”
Sometimes it seems like the investment community operates on the assumption that the world started in 1929 – or at least that the financial booms, busts and speculators preceding the 1920s are irrelevant to the modern investor. We think this is misguided. Just consider that this common worldview ignores an age where speculators lived in sprawling mansions on Fifth Avenue (as opposed to apartments in the same place measuring about 1/100th the size)! We imagine that there’s a lot to learn from looking at the past 300 years as opposed to the past 80. With this in mind; here we present what we believe to be the best trades of all time:
Nick Barisheff of Bullion Management Group Inc. is calling for gold to rise exponentially within the next five year time period. He’s convinced that unlimited and excessive money printing by the world’s central banks guarantee it. He’s even got a book coming out later this year to back up his hypothesis. He believes a mix of gold, silver, and platinum as well as geographical diversity will protect you from the numerous economic uncertainties and governmental threats that are lurking. Nick’s made it his life’s work to help people protect their precious metals holdings from over zealous bureaucrats and other criminal types. How safe is your metal?
We saw a nice little 60% move in Natural Gas prices over the last three months. But was that it or are we still going higher?
It looks to me like they put in a pretty solid base that took 6 months to form. So the setup is there. We have a clear neckline around $2.75 that’s now been broken. The month-long consolidation around those levels has allowed the 200-day moving average to flatten out and the rising 50-day to catch up to higher prices.
Here is a daily bar chart showing the $3.60 target:
We achieved this target by taking the distance of the Head to the Neckline (2.75-1.90 = 0.85) and adding it to the breakout/neckline level (2.75+0.85 = 3.60). For Risk Management purposes, I would be watching this 2.75-2.80 level where the neckline meets the 200-day moving average. I would not want to be in NatGas if prices are trading below that. Anything above it is a go.
We’ve been on the Natural Gas bandwagon for most of this year and it continues to be one of the few trending assets out there. We see it as a lot easier to buy dips in trending assets (and short downtrending assets) rather than get whipsawed around in a rangebound market (i.e. S&Ps).
CLICK ON CHART TO ENLARGE
Currently the Dow and S&P 500 are very near multi-decade rising channel lines and look to be forming bearish rising wedges.
Forecasting and chart analysis is an art, not a science. Even though rising wedges break to the downside roughly two-thirds of the time, I, nor anyone knows for sure, which direction investors will break these wedge patterns or how far it could fall! Keep in mind this pattern breaks to the upside one-third of the time too!
In my humble opinion the key to this situation is this- its not the odds of the market breaking to the downside that is important....it's the impact to portfolios if it does!
Keep this in mind....both the Dow and S&P 500 are nearing long-term channel/resistance lines, that have been in place for decades. If the wedges should happen to break to the downside, the bottom of these rising channels is a large percentage away!
A very easy strategy with this pattern at hand is.... protect capital (in case a breakdown would take place) and then follow an upside breakout if that is the eventual outcome.
Missing some upside action is a ton better than losing capital!