What's Up With $SLV?

Taxpayers Book a 50% Loss on its Investment in GM

GM said it will purchase 200 million shares of GM common stock held by the U.S. Department of the Treasury for $5.5 billion, or $27.50 per share. Therefore, this price implies nearly 50% loss on the government's breakeven price of $54.  I hope all those union votes were well worth the now booked $40+ billion cost to the American taxpayers.

So much for the "profit" spin by the Obama Administration and UAW.  I am almost certain that you will not hear the 50% loss on your taxpayer dollars coming from any of the mainstream media today.  But then again, that is why you read my blog.

U.S. Debt Over Time

The above chart has been extracted from ZeroHedge.  The debt trajectory is truly alarming, especially the Federal Deficit to GDP percentages.  Some additional comments from the above chart are as follows:

• Government spending is the true problem of America's deficits, which our politicians will not really deal with because of the entitlement mentality of our society.  That is, take from someone else but not from me! 
• This should not a political issue; however, it is. Politicians on both sides of the aisle are perfectly aware that setting the U.S. on a sustainable fiscal course in the long run would mean massive pain for the economy, and an immediate termination of all existing political careers. 
• There is no question that the current debt situation is unsustainable.  U.S. economy is currently growing at a pace of 1.5%-2%, at best.  Total 2012 U.S. debt will have risen approximately 8%, and will continue rising in the 6%-8% range.   
• More disturbing is the influence of the Fed, whose policy of a zero-interest rate policy (ZIRP), which completely distorts the workings of the money and capital markets, and outright debt monetization has been the only permissive factor that has allowed the U.S. to delay the inevitable moment of reckoning (Remember the end of the upcoming Shemitah is September 13, 2015.) 

So, what will the government eventually do?  Do whatever it takes to perpetuate its own self-interest, not yours, and take total control over your lives by making you totally dependent on it for everything.  In other words, the government wants to be your “god” (Think Executive Order 6102.).

EKG of America's Moral State

Unspeakable evil occurred today (Friday) in Connecticut.  When a madman took the lives of 28 individuals of which 20 were kindergarten children.  My prayers and thoughts go out to those families whose children and love ones were senselessly murdered. 

Montreal Law Requires Dogs to be Bilingual

Brenna, combien de langues parlez-vous? Savez-vous français? Que diriez-vous allemand?

Folks, I can not make this stuff up for the life of me!  Earlier this week, Montreal council member, Benoit LaDouce, proposed a law that would require all dogs in public parks to be bi-lingual.  That is to speak both English and French.  I know that this has nothing to do with "Financial Eschaton;" but, then again, the closer we get to the end times, the crazier things do become. 

The Continued Insanity of Bernanke

Well, the very bad Doctor Bernanke has spoken; and the Fed will continue its $85 billion purchase of securities into perpetuity.  If my math is correct, that $85 billion per month is something like $1.020 trillion over 2013 year.  Now, isn't that interesting?  That $1.020 trillion is approximately what the federal deficit will be for 2013.  In other words, the Fed will completely monetarize the federal deficit for 2013; and I guess all deficits there after.  Bravo, Ben!  You have just utterly destroyed the savings of all the retirees out there who live on a fixed income with your expansionary monetary policy.  But, Ben states that "core inflation" is under control.  Yes, it is true only if one does not buy food, gasoline, or need medical care.  He states that 3% "core inflation is ok.  However, what he does not tell you that at that rate of inflation, the value of your $1 today will be worth $.50 in twenty years.  Folks, I believe that we are still in a deflationary cycle, but the cycle is definitely on borrowed time.

Now, in regard to the Dow Jones Industrial Average, see the following chart with my comments inserted:

GM Bailout on the Brink of Being Reversed

Judge Gerber do the right thing and restore the "rule of law" in this country by reversing GM's bailout and send the company back into bankruptcy.  Folks, this is a story that is not getting a lot of coverage.

We are a "Food Stamp Nation!"

Thanks to Karl Denninger over at the Market-Ticker, the following chart illustrates that the so-called economic recovery from 2009 has been a complete fraud:

The Truth of the Employment Situation in America

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Well, the unemployment rate fell from 7.9% to 7.7% in November.  Great news, isn’t it?  No, because another 350,000 workers disappeared during the month of November.   However, when you read the mainstream media, not once would you find any mention to the fact that 350,000 workers left the labor market.  The entire focus is on the headline that the unemployment fell to 7.7%.  To make matters worse, the employment data by the four age brackets (16-19, 20-24, 25-54, and 55-64) are horrible.  That is, the largest gainer for the month of November was the group between the ages of 55 to 64.  This group added 177,000 jobs.  As for that key segment of the workforce, which would be the 25-54, jobs declined by a whopping 359,000 in November.  And this is construed to be good news?  Yes, if you only focus on the headlines that state the unemployment rate went from 7.9% to 7.7%.

Economist Casey Mulligan of the University of Chicago has documented that the huge increase in government benefits for not working, i.e., food stamps, disability payments, and unemployment insurance, are increasing the incentive not to work.  Welfare payments that redistribute income from workers to mostly non-workers now exceed $1 trillion a year.  In other words, fewer workers mean less tax revenues, more welfare benefits paid out, and, of course, larger budget deficits.  (See the following chart that depicts what has really transpired over the pass three years in regard to the labor participation rate.)  Oh, my the way, get use of these numbers, because the employment situation is going to get any better any time soon.

Happy Chanukah (Hanukkah)!

For the story behind the significance of Chanukah (Hanukkah), please click here.

Chrysler Workers Fired for Drinking on the Job Reinstated

Fox 2 News Headlines

Aren't union jobs great?  MyFoxDetroit reports that following a union-backed arbitration process, the employees were reinstated. This week, they came back to work after being fired two years ago.  Folks, we have a problem here.  First, Chrysler's labor agreement that permits this sort of "process" to take place in the work environment is a major issue.   Second, I don't know about you; but I, for one, will never buy a Chrysler product, because I want to purchase a vehicle assembled by sober employees at a auto company that does not have those types of problems with their union labor agreements. That means, I will only buy vehicles by firms who assemble or build them in right-to-work states with non-union workers or in overseas factories.

The Best Consumer Confidence Indicator: Gun Sales

Probably the best consumer indicator of overall economic confidence going forward is gun sales.  Higher gun sales simply means lower consumer confidence.  Likewise, lower gun sales the higher the consumer confidence in the economy and country.  What you have here is an inverse relationship between gun sales and consumer confidence.  Bottom line is that "gun sales" have never been better.  Smith & Wesson announced today that net sales for the quarter just ended were up 48%, which was a record for the company.  And, the company expects future sales to be even better than this quarter.

Know Your Geography for the Eschaton

What do Egypt, Persian Gulf, Strait of Hormuz, Horn of Africa, Gulf of Aden, Gulf of Aqaba, Red Sea, Suez Canal, Ethiopia, Somalia, Yemen, and Bab el-Mandab all have in common?  Answer: IRAN.  Yes, what is going on in Syria is shocking; however, it is nothing more than a strategic move (smoke screen) by Iran in gaining total control of Bab el-Mandab and the Horn of Africa.  Why is all this so critical?  Well, almost all of the trade between the European Union and China, India, Japan and the rest of Asia passes through Bab el-Mandab.  Approximately 30% of the oil, including all of the oil and natural gas from the Persian Gulf heading West, passes through the Horn of Africa.  Roughly 20,000 ships go through the Suez Canal and Red Sea each year.

$SLV: Reverting to its 200-day EMA

$INDU: Overbought Territory!

The Poor Get Poorer

You are not going to believe this one.  At least, I was saddened and shocked.  Then again, I realize that the "poor among us" do make poor financial decisions; but governments at all levels are taking undue advantage of those that are ill equipped to make sound financial decisions.  Now, to the substance of this post.  According to new studies, households earning $13,000 per year spend almost $1,170 per year on lottery tickets, which is 9% of their total income.  Yet, states rely more and more on measures that target these individuals to buy lottery tickets, which makes the poor more dependent on government through food stamps and medicaid.  

In another study, lottery ticket sales in North Carolina, South Carolina, California, Texas and Connecticut found that per capita lottery sales are consistently higher in the poorest counties and tickets are more likely to be purchased by unemployed individuals.

In a very perverse way, the government wants to take more money from the productive end of society, who do invest wisely and create jobs to grow the economy, and give it to those individuals who do not make good financial decisions.  Go figure!

 

Food Stamp & Medicaid Enrollments: The New American Paradigm

The following chart is brought to you with compliments of the Pennsylvania Department of Public Welfare.  No further comment is necessary, except multiply this chart by a factor of 49 other states.

Electronic Benefit Transfer (EBT) Card, or Food Stamp Card

The U.S. Department of Agriculture reported that a record 47,102,780 individuals received food stamps in the month of November, or 1 out of seven Americans.  That number exceeds the combined populations of 24 states and the District of Columbia. 

From a perspective of history, the number of individuals on food stamps has skyrocketed from 31.9 million in 2009 to the current record high 47.1 million. By comparison, in 1969 just 2.8 million Americans received food stamps. 

Last year, the food stamp program (officially known as the Supplemental Nutrition Assistance Program or SNAP) cost taxpayers $72 billion, more than double the $30 billion spent four years ago.

My rhetorical question for the day is simply does anyone really believe that our economy is getting better when 1 out of 7 individuals in America are on the SNAP?  

By the way, I really like the overall design of the EBT card.  Really patriotic, isn't it? 

Mark This Date for Potential Economic/Financial Disaster

Forget about the end of the world based on the Mayan calendar (December 21, 2012); instead focus on the pending Shemitah on the sunset of September 13, 2015.

Those of you that have been following my blog postings over the past several years know that I consider the next four years (2013 to 2016) to be extremely unsettling for your financial health.  The reason, of course, is that a 7.5-year stock market cycle is pointing to a devastating "Bear Market” starting in the fourth quarter of 2012 through 2016.  Downside price objective for this 7.5-year cycles is "1,000" on the DJIA ($INDU), which is the objective based on a massive "Head and Shoulder Top" formation from 1998. 

Now, back to the Shemitah, every 7^th year, the Shemitah, on the 29^th day of the Hebrew month of Elul, occurs.  Elul is the twelfth month of the Jewish civil year, or the sixth month of the ecclesiastical year in the Jewish calendar, August and September.  The next Shemitah occurs September 13, 2015.  Also, on that date, we have Yom Teruah (Feast of the Trumpets) and ten days later we have Yom Kaphar.  (I will let you do the research on these two significant Hebrew festivals and what they mean.)  By the way, I don’t consider it a coincidence that the greatest stock market “point crash” occurred on the 29^th day of the month of Elul (September 2008).  And, let us not forget the stock crash caused by the events of “9/11.”  When did that stock market crash occur?  On the 29^th day of the month of Elul, which was the exact day of the Shemitah.

In conjunction with the Shemitah on September 13, 2015, we have an unusual astronomical phenomenon; a blood, red moon is expected on the evening of Elul 29, 2015 (September 13).  From Scriptures, you may want to read Joel 2:30-31, Acts: 2:20, and Revelation 6:12 to discern the significance of the “blood, red moon.”  While doing this research on the aforementioned verses, read Matthew 24.

Once again, you have been forewarned.  However, with all due sadness, I believe that “none of this will matter to anyone until it matters to everyone.”  But, by then, it will be too late.

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How Many Ounces of Gold or Silver Should One Own?

See the link to Casey Research to determine the number of ounces required based on your monthly expenditures.  The tables are approximately in the middle of the article, entitled, "Ounces of Gold Needed and Ounces of Silver Needed."