We're all aware of the current predicament the USA is in at the moment, the discussions between both Republicans and Democrats are revolving around how much more debt they should signup (enslave) their tax paying citizens to. The question is not will they do it but by how much by. Although politicians are touted we're going to cut n trillion dollars from the budget, it's over 10 years. Some proposals are spending in 1 year what they will save over 10 years. This means next year they're going to take on even more debt, sending themselves down the slide of bankruptcy just like Greece.
What they really should consider is a balanced budget, what you take in you spend. This would avert a default which will ultimately deliver a more painful result than dealing with the problem. A lot of politicians, economists and financial reporters used to talk about the economy as though it was a hospital patient. Have you noticed after the crash less and less people refer the the economy as a hospital patient. Well here I'm going to reflect on the USA economy as a patient.
Consider when the USA economy crashed that it was a major car crash for what we'll call, Uncle Bill. Bill was near death, resurrected by (QE) Quantitative Easing (defibrillators), the patient, badly injured was put on special healing drugs to bring him back to health, he was also on morphine for the pain. Long term use of the drugs will make him very ill and Uncle Bill will become addicted. Uncle Bill was already addicted to the drugs but feeding him more will surely send him to a overdosed death. Uncle Bill is approaching the spiral of death default as its debt tips over 100% of GDP, unlike his friend Jimmy Japan, he doesn't have high value skills and manufacturing base with cash rich parents, all of which will help Jimmy Japan (Jimmy Japan has over 200% debt to GDP) via rehab centres. No, Uncle Bill is a simple labourer, he has some friends who gamble in the Casinos (Wall Street) but the Casinos are not the solution to the problem. If Uncle Bill doesn't retrain and export, he's going to crash and burn. Tim Geithner realised this soon after the crash. But unfortunately skilling up doesn't seem to have occurred very much. Oh dear, simply adding debt on top of debt doesn't work, as your currency drops your inflation goes up, your consumers stop spending, wages stop rising, it ultimately creates another recession and your carrying all that debt, and here the spiral death slide starts. Step too far down the slide and it's too late. Your going to end up in the fire pit at the bottom along with all your money, it will go up in smoke (default). Greece is the classic example, it spent more than it could ever pay back, the only reason the banks lent them the money was because their agents where getting handsome bonuses, including bank CEO's on their mega bonuses.
I don't know how long this is going to take, but your read it here first!
Thursday 28 July 2011
Wednesday 27 July 2011
The Price of Oil
As of 28/07/2011 the oil prices open at approximately:
I usually propose conspiracy theories on my Share Price Blog so here's another one. Europe debts to GDP are in bad shape, that includes Britain. Governments don't want to be seen increasing taxes when economies are supposedly weak (hmm stock markets up 100%, don't they track economies?) and unemployment is over 5%. Now what's a great way to deliver a stealth tax, I'd say ramp your oil and collect your taxes. What better an opportunity to use your agents in a foreign country build up a civilian frenzy against a dictatorship government. Kill two birds with one stone and get additional benefits of new improved oil contracts, improved oil supply and hook your banks into the country in question, Libya in this case. Civil war effectively assists in high oil price = increased taxes, lucrative oil deals for your local Oil companies = more corporate taxes, banks integrate into Libya post resolution of crises = credit provided to Libya = profit on debt repayments = more corporate tax income. But this must not be taken as a negative as it does seem that most Libyan civilians want Gaddafi out, the same was said for Iraq but did it work out? It cost western governments a fortune, but is that not classed as a stimulus to your economy, yes it is. But at some point where you've used wars to create a stealth stimulus and inflation, countries have been far lower than 100% debt to GDP's. Everyone G7 or some G20 countries are approaching the 100% level, we where last at these levels at the end of WWII. Therefore it's untested (other than Japan), to go beyond such a level in G7. Greece is a basket case we don't want to go their. The ratings agencies with razor teeth are looking up at G7's walking across a tight rope, any wobbles and the teeth start gnashing.
Brent Crude: $117
WTI Crude: $97
Trying to understand the price differential between WTI & Brent (see chart) is not that difficult, Brent Crude currently trades at a premium of some $20. This large disparity has exited now for several months since the civil war started in Libya. Brent is far easier to refine than WTI and therefore should in theory always trade at a premium, but not by this much. Historically Brent Crude has traded almost on par to maybe several dollars higher. Civil war has effectively reduced supply and Libya provides 3% of global proved oil reserves. Some 85% of oil is exported to Europe and in January 2011 Libya exported over 1.1mbpd. It's expected that bythe end of 2012 the Libyan oil disruption will be over and the Libya oil capacity will be back to normal.
I usually propose conspiracy theories on my Share Price Blog so here's another one. Europe debts to GDP are in bad shape, that includes Britain. Governments don't want to be seen increasing taxes when economies are supposedly weak (hmm stock markets up 100%, don't they track economies?) and unemployment is over 5%. Now what's a great way to deliver a stealth tax, I'd say ramp your oil and collect your taxes. What better an opportunity to use your agents in a foreign country build up a civilian frenzy against a dictatorship government. Kill two birds with one stone and get additional benefits of new improved oil contracts, improved oil supply and hook your banks into the country in question, Libya in this case. Civil war effectively assists in high oil price = increased taxes, lucrative oil deals for your local Oil companies = more corporate taxes, banks integrate into Libya post resolution of crises = credit provided to Libya = profit on debt repayments = more corporate tax income. But this must not be taken as a negative as it does seem that most Libyan civilians want Gaddafi out, the same was said for Iraq but did it work out? It cost western governments a fortune, but is that not classed as a stimulus to your economy, yes it is. But at some point where you've used wars to create a stealth stimulus and inflation, countries have been far lower than 100% debt to GDP's. Everyone G7 or some G20 countries are approaching the 100% level, we where last at these levels at the end of WWII. Therefore it's untested (other than Japan), to go beyond such a level in G7. Greece is a basket case we don't want to go their. The ratings agencies with razor teeth are looking up at G7's walking across a tight rope, any wobbles and the teeth start gnashing.
Lets hope Libya does not become the next Iraq war, for if that becomes the path our governments take, it will undoubtedly have been manipulated to be so, to effectively create mega price inflation.
Monday 25 July 2011
Senator Reid Best Plan To Avoid US Default
Senator Reid today announced a plan to cut the deficit by $3 trillion dollars with parts of the plan already agreed by Republicans. A large proportion of savings will come from ending existing wars, however there was no scope or thoughts for any new wars which may occur. There is no doubt that this is the plan that I expect to get signed off and it will be before the deadline of August 2nd 2011. This will give a notable relief rally which in turn will be supported by seasonal factors. The upward bull market will continue, there is no doubt in my mind. Buy the market on dips to August 2nd 2011 deadline and watch your profits from the rising share prices and hold them till November, it's possible consumer consumption for this Christmas will not deliver any notable growth, this will be a certainty if oil rises.
Friday 22 July 2011
Bond Swap for Greece and Greece only with selective DEFAULT
Says the European governments to the ECB. The model put in place to effectively extend Greek debt payments by mechanism of a bond swap for longer term and lower yields. In addition the Greek government will also undergo a selective DEFAULT. The selective default will wipe out 20% of debt against maturing bonds.
The possibility of this theme recurring year over year with Greece is quite high. This is because the economic profile of Greece is poor. In general they are naturally a weak economy and only managed to enter the Euro through deceit and brown envelopes passing hands in dark alleys. I say this because concerns where raised about their profile before they entered the Euro and thus the only way in would of been via brown envelopes.
Also the utopian society created on debt and early retirements was always economically doomed and a grade Z maths student understands that ponzi schemes can't last indefinitely as bubbles always pop.
Now can we believe that this is the only time that special circumstances will be used for only one specific country. Lets face it, politicians spend millions on making up rules just to throw them away when the pressure's on. They're already looking to change the rules about using rating agencies ratings for accepting collateral for debt issuance. So would they change the rules again for say another country. Sure they will, all it takes is a call from the USA president and a simple rule change to fire up the printing presses. This is the only way to ensure capitalist slavery continues down its Romanic path. For if the debt ponzi scheme is not continued then we could all end up living in a different world come 2020. It won't be long before Hollywood start making Mad Max 4, they're quite good at showing us our future.
At the end of the day this paper token scheme for swapping goods and services for money will start to look a bit silly when governments are printing money to wash away problems. At some point people will expect to be given free money globally per country if we can just wash it away with inflation and a hot printing press. Is there really any point working as a doctor on 100k a year when a cleaner in 10 years will be on the same money. Ok your salary may then be 1,000,000 but you would of wasted your time 10 years ago if inflation becomes silly. Lets face it, in such circumstances would it not just be best to sit back for 10 years and then re-enter the employment arena.
I always looked in amazement how the Zimbabwe leader seemed to be accommodated by all, especially by France. He walked around with his big smile, with most politicians smiling back each nodding like donkeys in mutual appreciation. The Zimbabwe presidents was running his printing presses 24/7/365 on nitro rockets. Lets consider why all this smiling mutual appreciation was going on. It clicked with me. He new that they new that he new that they soon in the future would be running up modifications of nitro rockets to their printing presses. This is what is known as diplomatic in the know heads of states sharing information at the most senior levels of government, in conjunction of having the in the loop economic professors within senior government. They all know that the current society which has been built on Romanic banking and demographic ageing populations with know real growth factors in the economy other that big government spending, will all go the Zimbabwe way. Which leads to the gold boom reflecting fear of loss of wealth via paper money. One must also understand that gold is nothing when your hungry and it can't build a home, bricks do that. It might look nice around your neck. You must also understand that gold in reality is as real as a newly made internet virtual currency, albeit you can see gold. But if everyone accepts a new currency, then gold is devalued as a means of trade, it's also not liked by Romanic banking for they like paper virtual currencies.
QE3 is an inevitability, more about that another time and more on how oil is useless if most people can't afford it.
The possibility of this theme recurring year over year with Greece is quite high. This is because the economic profile of Greece is poor. In general they are naturally a weak economy and only managed to enter the Euro through deceit and brown envelopes passing hands in dark alleys. I say this because concerns where raised about their profile before they entered the Euro and thus the only way in would of been via brown envelopes.
Also the utopian society created on debt and early retirements was always economically doomed and a grade Z maths student understands that ponzi schemes can't last indefinitely as bubbles always pop.
Now can we believe that this is the only time that special circumstances will be used for only one specific country. Lets face it, politicians spend millions on making up rules just to throw them away when the pressure's on. They're already looking to change the rules about using rating agencies ratings for accepting collateral for debt issuance. So would they change the rules again for say another country. Sure they will, all it takes is a call from the USA president and a simple rule change to fire up the printing presses. This is the only way to ensure capitalist slavery continues down its Romanic path. For if the debt ponzi scheme is not continued then we could all end up living in a different world come 2020. It won't be long before Hollywood start making Mad Max 4, they're quite good at showing us our future.
At the end of the day this paper token scheme for swapping goods and services for money will start to look a bit silly when governments are printing money to wash away problems. At some point people will expect to be given free money globally per country if we can just wash it away with inflation and a hot printing press. Is there really any point working as a doctor on 100k a year when a cleaner in 10 years will be on the same money. Ok your salary may then be 1,000,000 but you would of wasted your time 10 years ago if inflation becomes silly. Lets face it, in such circumstances would it not just be best to sit back for 10 years and then re-enter the employment arena.
I always looked in amazement how the Zimbabwe leader seemed to be accommodated by all, especially by France. He walked around with his big smile, with most politicians smiling back each nodding like donkeys in mutual appreciation. The Zimbabwe presidents was running his printing presses 24/7/365 on nitro rockets. Lets consider why all this smiling mutual appreciation was going on. It clicked with me. He new that they new that he new that they soon in the future would be running up modifications of nitro rockets to their printing presses. This is what is known as diplomatic in the know heads of states sharing information at the most senior levels of government, in conjunction of having the in the loop economic professors within senior government. They all know that the current society which has been built on Romanic banking and demographic ageing populations with know real growth factors in the economy other that big government spending, will all go the Zimbabwe way. Which leads to the gold boom reflecting fear of loss of wealth via paper money. One must also understand that gold is nothing when your hungry and it can't build a home, bricks do that. It might look nice around your neck. You must also understand that gold in reality is as real as a newly made internet virtual currency, albeit you can see gold. But if everyone accepts a new currency, then gold is devalued as a means of trade, it's also not liked by Romanic banking for they like paper virtual currencies.
QE3 is an inevitability, more about that another time and more on how oil is useless if most people can't afford it.
Monday 18 July 2011
News Corp Phone Hacking Whistleblower Employee Found Dead
News Corp. fired reporter from the News of the World paper, who whistle-blowed its editor, Andy Coulson for encouraging staff to phone hack, has been found dead. Sean Hoare's body was found dead at home in Watford, England. Are we surprised to hear the death is not thought to be suspicious. Hoare worked as a reporter at the News of the World with Coulson, who resigned his position as press secretary working for David Cameron U.K. Prime Minister due to being part of the scandal.
Whistle-blower Hoare whistle-blowed Coulson for rallying his reporters to hack mobiles / cell phones under an interview with the New York Times. He was an old colleague of Coulson at News Corp.'s Sun paper before he was shafted by the paper supposedly being dismissed for drug and alcohol problems.
Now the issue here is there are so many suspects involved in this death that one must consider it's possible that this has been made to look like a suicide. Something similar occurred with the guy who wrote the UK Iraq dossier which sent the UK into Iraq under a veil of a hunt for weapons of mass destruction, who mysteriously committed suicide. Although not linked or proved it does show that potentially governments could get involved in covert assassinations. This situation now poses was it really suicide or was it a bump off from any of the following:
1. Government authorised due to economic impact.
2. Scotland yard authorised due to embarrassment and take town of the hierarchy.
3. Personaly organised bump off from either Murdoch clan, old colleagues or now resigned Scotland Yard hierarchy.
The issue here is a international investigation must be pursued by an independent UK police commission in association with the FBI or potentially another USA independent police organisation due to an outside possibility of phone hacking in the USA. If phone hacking has occurred in the USA its potentially involved USA police officials (FBI?) who have access to mobile snooping facilities. An investigation by the FBI would not merit a proper result. As this is only undergoing an FBI preliminary investigation at the moment the possibility must be considered a cover up could occur in the USA if an independent police commission is not used. Alas because the wrong moves are being made now, potential evidence could be destroyed.
Now all these thoughts are just simple internal brainstorming over the circumstances and any regular police force would simply come up with the same variables over the News Corp fiasco.
The share price of News Corp is consequently being hammered down in value due to the basic facts of loss of revenue on News of the World, loss of revenue on USA papers customers buy competitors papers and loss of BSKYB acquisition. This will all take it's toll on the bottom line of profits and more than likely for quite some time. There is also the outside potential that this will bring down the Whole of the News Corp. organisation. There is still more losses to come on the share price, much more losses. My recommendation is SELL!
Whistle-blower Hoare whistle-blowed Coulson for rallying his reporters to hack mobiles / cell phones under an interview with the New York Times. He was an old colleague of Coulson at News Corp.'s Sun paper before he was shafted by the paper supposedly being dismissed for drug and alcohol problems.
Now the issue here is there are so many suspects involved in this death that one must consider it's possible that this has been made to look like a suicide. Something similar occurred with the guy who wrote the UK Iraq dossier which sent the UK into Iraq under a veil of a hunt for weapons of mass destruction, who mysteriously committed suicide. Although not linked or proved it does show that potentially governments could get involved in covert assassinations. This situation now poses was it really suicide or was it a bump off from any of the following:
1. Government authorised due to economic impact.
2. Scotland yard authorised due to embarrassment and take town of the hierarchy.
3. Personaly organised bump off from either Murdoch clan, old colleagues or now resigned Scotland Yard hierarchy.
The issue here is a international investigation must be pursued by an independent UK police commission in association with the FBI or potentially another USA independent police organisation due to an outside possibility of phone hacking in the USA. If phone hacking has occurred in the USA its potentially involved USA police officials (FBI?) who have access to mobile snooping facilities. An investigation by the FBI would not merit a proper result. As this is only undergoing an FBI preliminary investigation at the moment the possibility must be considered a cover up could occur in the USA if an independent police commission is not used. Alas because the wrong moves are being made now, potential evidence could be destroyed.
Now all these thoughts are just simple internal brainstorming over the circumstances and any regular police force would simply come up with the same variables over the News Corp fiasco.
The share price of News Corp is consequently being hammered down in value due to the basic facts of loss of revenue on News of the World, loss of revenue on USA papers customers buy competitors papers and loss of BSKYB acquisition. This will all take it's toll on the bottom line of profits and more than likely for quite some time. There is also the outside potential that this will bring down the Whole of the News Corp. organisation. There is still more losses to come on the share price, much more losses. My recommendation is SELL!
Tuesday 12 July 2011
USA Debt Ceiling to be raised boosting Share Prices
I just thought I'd let you know that all the dancing between Republicans & Democrats about the debt ceiling is just a little charade for the investing sheep in society. Basically the way this news piece is manipulated is to make sheep feel very worried that the debt ceiling might not be raised, you sell your stocks. Then GASP, miraculously it get raised, every sheep from New York to London cheers and drives the market UP. It's a classic political game that's played out for the Banksters. It allows the Bankster to whipsaw you outa your hard earned money, as they know exactly what's going to happen, along with their political friends who allow Goldman Sachs to manage their money.
I recommend ploughing in 2 days before the sign off, we all know the USA politicians are the weakest in the world when it comes to their beloved stocks & shares.....for them the only way is up for share prices...to achieve that, kick the can and shaft your tax payers until there's no can left. In 5 years time the USA will be reading the Book Of Greece.
I recommend ploughing in 2 days before the sign off, we all know the USA politicians are the weakest in the world when it comes to their beloved stocks & shares.....for them the only way is up for share prices...to achieve that, kick the can and shaft your tax payers until there's no can left. In 5 years time the USA will be reading the Book Of Greece.
Here comes the S&P 500 Support / Crash Test - Double Dip Watch
The S&P 500 is where we will see the future direction in the markets. At the moment share prices in the European indices have plummeted whilst contagion spreads to Italy from Greece. Support holds around 1,316 matching the 50-day moving average, this area is technically important.
On a longer term chart, the world renowned bearish head and shoulders pattern is forming, break of 1316 will deliver a crash of share prices to the S&P 500 200 day moving average. A fall below the 200d MA will signify entry to a bear market and thus the break of 1316 support may well be the first indication of the infamous double dip.
Thursday 7 July 2011
Banksters Strike Again!
JPMorgan Chase fined $228 million for bid rigging. I whole heartedly recommend you invest in JPMorgan (JPM), this shows they have strength within their field. Being able to arrange a cartel of such a magnitude and pass off counterfeit and fraudulent bids for many years witout being detected. They're able to get away with bankster tactics for a snip of a fine. If main street attempted such a move we'd be in jail for many years. My target price is $60, great value, good profits, connections at the top and bottom, better than Goldman Sachs.
Sunday 3 July 2011
Collateral Backed Lending hitting new Post 2007 crash highs
Interbank lending between banks which use European government bonds as collateral has reached record levels, this is occurring whilst we have all the issues with possible defaults with the PIIGS countries. Lending between banks without collateral has ground to a standstill. This type of lending is hitting new highs in comparison to highs during the last financial disaster in 2007. Portugal is struggling to finance using it's bonds as collateral. This may need the European Central Bank to start printing and pumping again.
Be afraid....be very afraid. If this gets out of hand again, we'll have another crash. It's a sign of no trust of governments in paying their debt....aka. Greece & Portugal in the firing line, followed closely by Italy.
Be afraid....be very afraid. If this gets out of hand again, we'll have another crash. It's a sign of no trust of governments in paying their debt....aka. Greece & Portugal in the firing line, followed closely by Italy.
Share Prices Rise end of June 2011
Share prices have risen, this didn't surprise me as traders do the opposite of what you expect, the market was technically oversold. Greece also not surprisingly have agreed to take on more debt and kick their default can down the road. I feel sorry for the German and France tax payers, what a suckers deal they're getting. So the Greek government take on the debt nicely timed for the end of USA QE2 money printing fiasco, news manipulation at it's best. However one must be aware that the loss of free easy money will have an impact at some point. My belief is 2012 is looking bad, oil up, no free money, share prices down.
Another current risk is China PMI has dropped further in June, this indicates contraction in factory output, something which hasn't occurred for 11 months. Also note that copper inventories are rising, demand is falling and the bulk shipping Baltic Dry Index is very low. This all points to a slow down to me, but the key question is will their be a upturn for christmas, of course there will. But the question is how much in comparison to last year, will people cut back more due to the oil price and their own personal debts / defaults. Also has the china market absorbed so much stock building in the metal markets that now the the copper price is at $4+ /LB they will start to use stock supplies to deliver price stability.
Other risks now arising is bank such RBS are about to start offloading toxic commercial mortgages onto private sector investors. Cue Whitesnake - Here We Go Again.
Another current risk is China PMI has dropped further in June, this indicates contraction in factory output, something which hasn't occurred for 11 months. Also note that copper inventories are rising, demand is falling and the bulk shipping Baltic Dry Index is very low. This all points to a slow down to me, but the key question is will their be a upturn for christmas, of course there will. But the question is how much in comparison to last year, will people cut back more due to the oil price and their own personal debts / defaults. Also has the china market absorbed so much stock building in the metal markets that now the the copper price is at $4+ /LB they will start to use stock supplies to deliver price stability.
Other risks now arising is bank such RBS are about to start offloading toxic commercial mortgages onto private sector investors. Cue Whitesnake - Here We Go Again.
Why Oil Dropped in Price - June 2011
Well one of the key reasons for the oil price drop was a release of 60m barrels of oil to the market over a 1 month period, this is in response to continuing disruption of oil supplies from Libya. Also in my opinion it's also to counter the inflation mega-trend that has ensued from the mass money printing from global central banks. This inflation occurs because banks borrow money from their central banks at currently < 0.5%, they then invest in higher yielding assets such as commodities (oil), government bonds ad shares / stocks, hedge funds are also key players in the oil market. This in turn drives prices up in all asset classes, helped by easy money policies getting out of control. The Libyan war just added more momentum to the ever increasing oil price. One thing you must remember, governments and central bank love bubbles.
The IEA will monitor the situation and release more oil accordingly, a large portion of this oil is coming from USA oil reserves, total reserves are approximately 146 days, way above requirements. These reserves have been built up in part to inflate the prices and cream off the taxes. Of course this release can't happen indefinitely and may just kick the double dip down the road, another favourite game of the mandarins and bankers.
Barrons believes oil is heading back to $150 in 2012 and that the toll on economies will be lower than in 1980. It believes this due to a larger share of America's gross domestic product comes from services rather than goods. In my opinion this will create a double dip because service usage will drop due to more cash being spent on car travel / goods and peoples perception will be loss of wealth.
The IEA will monitor the situation and release more oil accordingly, a large portion of this oil is coming from USA oil reserves, total reserves are approximately 146 days, way above requirements. These reserves have been built up in part to inflate the prices and cream off the taxes. Of course this release can't happen indefinitely and may just kick the double dip down the road, another favourite game of the mandarins and bankers.
Barrons believes oil is heading back to $150 in 2012 and that the toll on economies will be lower than in 1980. It believes this due to a larger share of America's gross domestic product comes from services rather than goods. In my opinion this will create a double dip because service usage will drop due to more cash being spent on car travel / goods and peoples perception will be loss of wealth.
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