Monday, April 29, 2013

US Central Banks

It still surprises people when I mention that the US had 2 central banks prior to the Fed. Those 2 central banks were shut down. At the rate that this current Fed is going, they will disappear in the foreseeable future too. It is unimaginable to most right now. But at the rate it's going, it will disappear.

One thing analysts really need to learn is that there're always unintended consequences to every action that the central bank takes. These people subconsciously thought that this time, it's different. It's as if this is some kind of new age economy. They never study history. And if they do, they studied the wrong history.

History repeats. Or if it doesn't repeat exactly, it rhymes.

Friday, April 26, 2013

Peter Schiff's rundown on the GDP propaganda

Massage the unemployment numbers, massage the inflation numbers, now massage the GDP numbers

Wednesday, April 17, 2013

Stealthy Yuan

Summary of two years of the Yuan internationalization efforts, due to decreasing faith in USD and china's increasing prominence: 

-"World's Second (China) And Third Largest (Japan) Economies To Bypass Dollar, Engage In Direct Currency Trade", 
-"China, Russia Drop Dollar In Bilateral Trade", 
-"China And Iran To Bypass Dollar, Plan Oil Barter System", 
-"India and Japan sign new $15bn currency swap agreement",
-"Iran, Russia Replace Dollar With Rial, Ruble in Trade",
-"India Joins Asian Dollar Exclusion Zone, Will Transact With Iran In Rupees",
-"The USD Trap Is Closing: Dollar Exclusion Zone Crosses The Pacific As Brazil Signs China Currency Swap",
-"Australia And China will Enable Direct Currency Convertibility", and the latest
-"France intends to set up a currency swap line with China to make Paris a major offshore yuan trading hub in Europe, competing against London."

source: Zero Hedge

Traders entertain me more than precious metals price movements

Note: This post is not directed at any particular person. I love you all.

There we go again. It's the time of the bull market when there's a nice correction in gold and silver. As usual, I am inundated with messages from the anti-gold people. I have nothing against them and do not look down on them in any way, and I hope they have nothing against me too. I respect their views with regards to short-term price movements, and have never challenged any of those views.

It's unfortunate that a lot of traders cannot see things from the perspective of a long-term investor. As a long term investor, I understand the actions of short-term traders - why they enter or exit at certain prices, why they follow everyday-news closely, etc - but this understanding is almost always non-reciprocal.

With all due respect, traders focus more on charts than do actual research on market happenings that have occurred in the past. This turns into a big mistake if they then try to predict long-term trends without sufficient data and historical perspective. No matter how I tried to present the macro factors to them, they are just simply and conveniently ignored. To repeat - I know traders live in the here and now and maybe they make lots of money, but to make long-term predictions without adequate data and historical perspective is a mistake.

I would like to point out that there are good traders - they can make money in bull or bear markets. But more often than not, they try to push their views onto long-term investors - when it comes to exit or entry points to the market. I take pains to keep on repeating that I am not concerned about short-term price movements at all. Not at all. Non. Nada. NoNoNo. I'm happy with the way I invest and I'm guessing they are happy with the way they trade too. Unfortunately when I don't follow their sometimes well-intentioned advice, they start making wild claims that I'm too emotionally attached to my investment, or that I'm stubborn, or that I am being slaughtered by the price crash, or that I'm a gold bug - the list goes on.

The reasons why I buy silver have not changed the slightest ever since I bought my first oz. The reasons why I will eventually exit silver have not changed the slightest ever since I bought my first oz. Not at all. Non. Nada. NoNoNo. These short-term price movements are entertaining, but non-events in the scheme of things. Such things should not surprise long-term investors at all.

Anyway, silver's price movements in the past 2 trading days are awesome. Such corrections are perfectly normal and I love it. I just wish I have more cash to buy them up.

While I expect big corrections to happen from time to time, I am not smart enough to know exactly when or at what prices. That's why I do not try to time the market and short sell. That being said, I keep getting "I told you so" messages. If traders really saw this 'crash' coming and acted on their convictions (no conviction = speculation/gambling. well, somewhat.), they would have shorted gold and made $200 x (insert leverage multiple here). Easy.

P.S. I still love you all.
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