Considering The Impossibility

Everything is possible now with the unraveling speed of Wallstreet 700 trillion derivatives. Which of the following scenario may come true? Maybe all of them.

1. Dow at 3500 in 2011.
2. Gold at 5000 in 2016.
3. S&P 500 bottoms at 400.
4. The economic depression lasts more than 20 years until 2032/2033. This is not coming from me, but from the best economist that I know.
5. All major banks nationalized at 80% of more, with stocks trading at penny levels by the end of 2009, continuing to extract hundred of billions every quarter from taxpayers to cover their derivative losses. Why is there no one outraged by benefits going to all the counter parties of the banks? The losses of the banks are the gains for the counter parties of the banks, which are being paid by all the US taxpayers, and eventually by the entire world through monetization and inflation.

My “own crystal ball is showing” me that the stock markets will literally plummet another 50% to 60% in the second half of 2009, deflating everything until 2011, after which inflation gradually accelerates towards 2016, and wipes out all the cash holders. I predict in less than 15 years, there will be a hungry and unemployed mob rioting in the streets of Washington DC.

The other day, I donated more to Ron Paul’s calling on fighting against mis-using of taxpayers’ money. American Republic is becoming a farce of preferential money distribution. Although intellectually I believe that US will not come out of this unstoppable economic mess until wrecking itself, emotionally I must “do my part” of trying to turn things around. Who else will turn USA around, if everyone of us don’t stand up and fight together? There will be no one saving this country from even dire economic except us.

I understand that it sounds almost stupid to consider the impossibility of my little donation and my lonely voice will make any difference to the fate of this nation. But when I ask “who else” to myself, I think I might as well begin with myself, joining hands with Ron Paul’s campaign. I’m literally a “hopeless romantics”. But who says (my) love (for the nation) needs to be logical?

Is Gold In A Bubble?

One of my colleagues have repeatedly asked me this question. I am quite clearly on the answer, “NO”.

How many people do you know who actually hold GLD? How many people do you know actually buying gold? How many people do you know actually buy mining shares? The answer all too often is close to zero.

A bubble is ALWAYS easily recognizable (unlike the shameful Greenspan who claims that it can only be seen hindsight). The participation rate will be quite high that you are bound to hear about it in news REPEATEDLY, and that it will be always the “topic of the party”. A bubble is a collective ignorance or rather frenzy, and there is always a disconnect to reality.

In fact, gold is looking extremely good technically, forming the bottom of the cup in a cup & handle chart. The next rising up is usually pretty substantial.

At $1000 just a month ago, the gold bull is faithfully shaking off the Indian and Arabic participants. However, the Asian will be piling in due to competitive devaluations of their own currency. Asians have always recognized both gold/silver as the money. They will never hesitate to protect their own wealth in the real money.

So are you onboard?

Unfortunately, for the smaller investors, physical gold is pretty much out of reach. With a minimum order of 20 ounces, that is about $20000. The only current buyers are from institutions and people who have money to put away. These are smart investors buying in, while the middle class is selling out their last portion of gold jewelry for cash. Who will be right?