Canadian Blog Awards 2007- results

I'd just like to thank my supporters (your phony fiat money is in the mail) for their votes and hope that my second place showing in the Canadian Blog Awards and my growing number of hits is a sign that people are beginning to see the financial storm on the horizon. I’ve learned much in the last 16 months and hope I’ve managed to pass some of that knowledge along without offending the grammar police too much. This was a widely varied category with a number of strong blogs and since the Silver/Gold niche is still young, so hopefully I’ll be back next year!

Congratulations to Idea Drunk who won this years contest.

More than the Ice Caps are Melting Down

U.S. Fed Rate

I'm not in the least bit surprised by last weeks .75pt cut or Wednesday's .50 pt cut of the U.S. Fed rate, I'm well on my way to meeting my prediction of a 2.0% rate by years end, hell the way it's going it could by the 3rd quarter.

What I am wondering is how such a large cut over such a short period of time has not hit the USD index much harder? Yes, the Canadian Dollar and other currencies have strengthened over the last 8 days but I'm quite surprised they did not rally much higher, obviously the market expects the BoC and other central banks to echo the U.S. cuts. While I think other central banks will cut I do not believe anybody else will be so aggressive.

Stimulus

The $150 Billion stimulus package has passed the first hurdle in the Senate Finance committee receiving only a few tweaks on who gets how much. The revised package now sizes out at $157 Billion but what's a few more billion compared to the $9+ Trillion of the official federal debt.

The Senate was good however and made only a few small changes that could keep the package from being OK'd by the full Senate or vetoed by Bush. As I stated previously this is just the first of several packages that will get rolled out as the economy unravels further and those idiots soon to face re-election become panicked. House of Representatives Speaker Nancy Pelosi has already stated that if needed more stimulus will be created.

Buy votes, create more debt, encourage more unsustainable consumerism and move towards hyper inflation all at the same time, you can't claim this bunch is underachieving.

The next big issue

As I touched on a couple of weeks ago the next wave in the overall financial crisis (Bond insurers)is cresting and will soon wash away 100s of billions in value as bond insures lose their high credit ratings and report more loses. Just today Bloomberg reports that there is belief in the market that MBIA Inc. and Ambac Financial Group could be facing another 11.6 billion dollar loss EACH. To further make my point rating agency Fitch hit Financial Guaranty Insurance Co, the worlds forth largest bond insurer, with a rating cut from AAA to AA, following their earlier re-rating of Ambac to AA and Security Capital Assurance Ltd to A, only a couple of steps above the Magical Junk category that would force massive sell offs by regulated pension funds that must hold investment grade bonds.


It appears Fitch is the only rating agency even attempting to do it's job. When this all washes out their marginally more accurate ratings will give them an advantage on the other agencies, provided any of them survive the eventual lawsuits.

I got too tired to finish this post only to find another pertinent article first thing Thursday, as MBIA announced it's loss of $2.3 Billion or 18.61 per share. Read the article, I honestly don't think they can raise new capitol as fast as they can lose it.

Metals

You have to be happy over the performance of Silver and Gold since the New Year with both metals avoiding any large correction or rigged sell off. Ted Butler must be jumping for joy at the losses the Silver shorts are taking, in his most recent interview/article he claims that the Silver shorts have taken 3 Billion in loses since the beginning of the year. If the big anonymous shorts are the Chinese they won't even blink but if this turns out to be a bank or banks already hurting from mortgage exposure then it's going to hit the fan pretty soon.

If you're in the mind to buy some silver, this is the time despite the recent highs. If one or more of these mystery shorts is required to cut and run the price spike would be significant. I don't see the possibility of more than a buck or two downside this year but I see $10 or more upside. That sounds like pretty good odds to me.

Miners

Fear that the bull is just a fad or is soon over has left the juniors underperforming the metals by a good margin. I don't believe the bull is over and yet and I'm seeing small producers’ way off their two year highs, and exploration plays down significantly from where they were when I started this blog.

Silver is at a post Hunt Brothers high, gold at a )non inflation modified) all time high and yet small companies with financing in place and a solid plan for production are getting no respect. This is the buying opportunity of a life in my opinion. Pure speculation plays will still rely on “hot tips”, pumpers, drilling results for movement but there are many choices with a compliant resource in place that should move up markedly from these lows. If the U.S. Fed keeps pumping inflation and debasing fiat money then eventually simply having gold or silver in the companies name will attract the sheeple investors. When that happens the sky will be full of money and my garage full of fleeces.

TAX time

It's RSP time Canada, consider putting some of your new money into mining juniors, a gold index, a physical gold rsp by questrade. Even consider leaving some small portion of your expected contribution outside a RSP in physical silver.

It's wild and crazy out there these days, be safe and trust nothing the TV or the Gov tells you about the markets.

Blog Awards- vote Canadian Silver Bug

So I'm back from an exhausting week in the Tragic Kingdom and found that I've made the cut for the second round of voting for the best business/finance blog at the 2007Canadian Blog Awards

If these posts have been interesting or informative in your quest to maintain or build your wealth/financial security please place your vote. You don't have to be Canadian just a happy reader. I do know there are readers out there (despite the lack of comments) because of my climbing hit stats and I have also corresponded directly with a number of readers. I do hope this project of mine is doing some good, you may not comment but your vote would reassure me I'm making a difference.
Thanks.

Gata strikes back

GATA - The Gold Anti-Trust Action Committee is calling out the U.S. government over decades of gold price suppression in their obviously failing attempt to legitimize the fiat money in general and the U.S. dollar in particular.

To this end the Wall Street Journal has agreed to run a full page ad, seen here in PDF calling for a full independent auditing of the U.S. gold reserves, which many industry insiders including Citigroup and Sprott Asset management believe have been loaned, leased or sold away to manipulate the gold price.

This is not just some wild conspiracy claim, Allen Greenspan himself admitted in Congressional testimony that Central Banks were "ready to lend gold in increasing quantities should the price rise."

I'm surprised the Wall Street Journal took the add but I'm glad Gata has managed to strike back for the little guy, me!

I'm off to vacation and would probably have missed this story if I'd not seen it elsewhere so thanks to LadyBroadoak

A Deluge of money

Bernanke and Bush have agreed to back a new stimulus plan intent on saving the economy. Today’s announcement endorses a $145 billion plan that will include possible $600 personal tax rebates, longer unemployment benefits, a targeted housing tax break, tax breaks for business and rebates for research.

Let’s look at this piece by piece , $600 tax rebate = a few weeks of groceries, a weekend away, the minimum monthly payment on a mid tier credit card balance, or 1 months difference on a reset ARM. Big deal! Sure it will make the public all warm and fuzzy but a single shot of heroin is never enough to make a junkie happy and America’s debt junkies will find little relief from this one off fix, which of course will have to be financed through foreign credit. Whooweee what a deal!!!

Longer unemployment benefits. That’s funny because the government has stated for a long time that employment was strong and as such was an indicator that the economy was healthy. Surely that one month blip to 5% was not enough to convince them there was an issue!
Oh, but of course, the Bureau of Labour statistics knows very well that unemployment is much higher than the stats let on, after all it’s their birth/death model and other voodoo accounting that has created the unrealistic low numbers for years.

Targeted house tax breaks, Well, if the targets are stupid people who bought houses they could not afford then this is just wasted money meant to reward fools, and fraudsters. The people who need this the most are those who took the biggest risks and those who should not get bailed out at the expense of the rational members of society.

Tax breaks for business and research credits are both good things but who gets them. I truly believe that this will just be another way of funneling money to big oil and the military industrial complex. Don’t expect to see small manufacturers, solar, wind or geothermal companies get a cent, do however expect to see Exxon and Halliburton at the head of the line. If money has to be spent to stimulate, build clean power plants with domestic technology and begin the process of weaning the U.S. off the greasy teat of Big Oil. After all energy is one of the largest components of the U.S. trade deficit, if stimulus were used to build energy self sufficiency, you create jobs, lower the trade deficit and enhance national security, giving you 3 wins for the debt you will incur. This new package will achieve little but still create debt.

The real significance of this announcement is the validation of Bernanke’s claims that he would drop money from helicopters to thwart any major recession. The copters are on the pads and all fueled up and there is not a hope in hell anyone in Congress would actually ask, “Where will we get the money?”.

This will be the first of many attempts to reinflate and will invariably lead the U.S. into a hyper inflationary episode as the deluge of money falls from the sky.

Try to avoid handling this new money too much, not only is it created with money borrowed from China but I suspect it will be printed there as well, likely with high lead ink.