muses of the moment

May 31, 2010

Latest Letter from Martin Armstrong dated May 27, 2010

For immediate release, latest letter from Martin Armstrong dated May 27, 2010 entitled The Two Phases of the Great Depression, click here.

Read the acknowledgments, Martin sums up his predictions for world economic powers.

Martin answers the question that groovygirl (and apparently others) have been asking, will we (especially in the US) have a depression?

I think this is a very important paper to read and then reread.

I think this letter makes it clear, Martin says that we will not have a 1930’s style depression. Certain investments will deflate, others will inflate, basically because we have the same contraction in sovereign debt and a currency crisis as the 1930’s and NO tie to gold. This is the key to the changes, the global fiat currency system untethered to gold.

Conclusion 1: gold will breakout, fall back to new support, starting a new up-trend (page 4-5).

Conclusion 2: The monthly cycles are producing the same turning points as in the 1930’s only in relation to dates….time. They are producing the opposite effects in movement in the DOW price.

It appears that whatever we see going into June in the DOW, we will see the opposite effect in August. Short term, Martin sees June as a key at 10,040 (page 7), with declines in August. He says there is no indication of new lows, especially as European crisis continues. There seems to be flight to safety to the USDollar, bonds and stocks.

groovygirl side musing: even though we have reached a low in the DOW that will hold, it doesn’t mean we will have no more volatility in the markets. Groovygirl stills likes gold before stocks, and definitely before bonds and currencies. I don’t know that Martin answered the hyperinflation question. Actually, I don’t know that we can answer the hyperinflationary question yet, as the printed money is still sopping up deflating debt (now in Europe). One thing is clear, governments will print whatever is necessary to avoid deflation. And secondly, they have no intention of paying back any of their debt. But the key to market timing…..when will investors clue into these to facts and what investment will they pile into.

As Martin says in his letter, it is not boring.

Side-side musing: “When something gets said, don’t worry about analyzing and agreeing or disagreeing: just let the information sit, a building block of experience to be assimilated.” These are wise words in these times. There is too much coming at us too fast, lots of opinions. Let it sit with us for a little while. It is just information with no emotion or judgment tied to it for the moment. Click here for more from W E Pollock.

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May 30, 2010

Audio from Steve Meyers

Filed under: 401K and IRAs, The Banking Crisis, The Dollar Crisis, The Financial Crisis — totallygroovygirlfriday @ 11:31 am

Click here for the latest information from Steve Meyers.

Usually videos, but an audio update this time with Steve Meyers.Steve Meyers really nails the current situation. Groovygirl thinks his advice to stay out of stocks for now is a good idea.

Side musings: 5 banks down last Friday.

May 28, 2010

Gold at $1700 per ounce?

That’s what it is selling for in Greece right now (40% higher than market price!!). Higher on the black market. This is what happens when people lose confidence in their currency. This will happen in the US, it is just a matter of time.

Click here for the whole story via zerohedge.com.

Side musing: gold teacup right on schedule. Click here.

May 27, 2010

Ok, I have my investments in order, what’s next?

Filed under: Economic Crisis, Fiat Currency, Odds 'n ends, Peak Energy, Permaculture, The Financial Crisis — totallygroovygirlfriday @ 1:47 am

Those of you that read this blog regularly realize that there is a paradigm shift happening now. It is permeating all levels of society in every country and effects all aspects of one’s life, including, of course, finances, the main focus of this blog.

You may be getting to the point that your own personal house is in order and be ready to help others or join organizations that are facilitating positive moves forward on a local, state, or national level. It can get overwhelming looking at all the groups that have “solutions” out there.

Groovygirl thought Chris Martenson did a great job outlining the qualities he looks for in an organization before he expends his hard-earned money and energy.

I have been slow to throw my hat into the ring with organizations dedicated to bringing intelligent responses to our predicament. The reason is that I have a list of requirements that have to be met:

  • The proposed actions have to address the real challenges that we face.
  • The organization has to be strictly non-partisan and neutral or silent on a wide range of belief-centered positions.

I know that doesn’t seem like a very long list of requirements, but it turns out that it eliminates an enormous number of organizations and individuals from consideration as affiliate partners.

Click here for the full post. (The point of this post is not to point you to Slow Money, but to get you thinking about what qualities an organization needs to have before you would want commit to them. You want to join a team that will ride the wave with you, not drag you down.)

May 26, 2010

Excellent video from Sprott

Groovygirl gives three cheers for this excellent video!! This video has it all, why we should care about Europe crisis, the coming impact of sovereign debt, and why you should own gold. Excellent….(2 videos at 10 min. each). Click here. Listen to this video twice, three times. All the information you need is there to understand what is happening and will be happening in the next 5-10 years.

groovygirl says: you do not have to be a financial economist to understand what is going on, it is common sense. What you do have to understand: what we have been taught about how economies work will be blown away. How you have been taught to invest (by the financial industry) in the last 30 years will not work in the next 20 years.  A major paradigm shift is happening now.

Side musing: As always, Max Keiser articulates our anger for us : Jim Richards makes an appearance to talk about fraud. Click here.

May 25, 2010

Short term outlook from Bob Janjuah

Filed under: Economic Crisis, Fiat Currency, Stock Market, The Dollar Crisis, The Federal Reserve — totallygroovygirlfriday @ 1:29 am

Another great post from Bob via zerohedge.com. Click here.

Basically we are looking at deflationary pressures in the next few months from all global markets. Then if these markets really start to spiral, major printing of money and market pumping late this year/early next year. With possible inflationary repercussions from that process afterwards.

Groovygirl expects more of the same, government/corporate intervention in the markets to prevent outright deflation. Do not trade in this environment unless you know what you are doing or you are completely crazy.

There are a couple of other economists sounding the alarm of deflationary pressures based on the numbers they are looking at and the rate spreads in Europe. This looks like and ongoing deflationary, up and down battle through the end of the year at least.

Groovygirl has said before that it will be clear to everyone that we are still in real economic trouble by the end of 2010. We will be in full fear mode by December.

Update: euro is falling….now around 1.21, 1.20 is a key support. They are trying to move it up as I write. All global markets fell last night. Italy says no more than 5000 euro in cash, this is a form of currency control (they are having a run on their banks). Spain merges 4 banks, trying to create a “too big to fail”? European crisis is NOT contained, bailout not working. Expect more money to be thrown at this problem with little result.

May 24, 2010

How do I prepare for this financial crisis?

For those that read this blog regularly, you know how to prepare and have been actively involved in doing it for a while. But for those who are just now realizing that something is rotten in Denmark and we are not in a recovery, you may be confused as to where to start. Groovygirl has some suggestions. This is what I have been doing and am continuing to do to protect my family and investments in the face of this Kondatieff Winter cycle.

I will list some basic things that anyone can start doing now. Then I will focus on some more conservative investment suggestions to do ONLY after you have secured your core investments and you have the extra money to do so. The majority of people don’t have extra savings, so part one is for them. These are things to do at any age for any investment income. These are the basics. If you want something more advanced and individual, contact a competent financial adviser.

Rearrange your income to save at least 10% per month. With that 10% plus, do the following:

  • Set aside some cash. Between one month and 6 months worth of monthly expenses. This is for you to live on if you should lose your job or have a major emergency like medical, housing, needing to move quickly, car repairs, additional emergency supplies in a disaster. Have some cash at home and some cash at 2-3 different banks.
  • Next step, buy some extra food and daily household items. You can really go wild with this, or just have enough saved for your family for a few months. There are lots of websites about storing food, look them up. Basically make sure you have at least 1-6 months worth of food, toiletries, and medicine for your family. This is the preparation for some possibly scenarios: you lose your job, you have to move and you don’t have a new job yet, a local disaster (such as hurricane, earthquake, oil spill, pandemic), national supply chains are slow or stopped, you have the essentials to tide you over. In an extended time of no supplies, you can trade what you have for things you need. Note: you can really go crazy with this survival mode and move into solar panels, generators, water filters, bug-out bags, guns and ammo. Save that for after you have secured the next few steps.
  • Third step: purchase some physical gold and silver coins. This can range from a few American Eagles purchased from your local pawn shop to gold bars stored in a vault overseas, depending on the amount of money you have to invest. The main reason to have physical gold and silver is to protect your core savings from hyperinflation or the coming currency crisis in the next few years. This is so you will have some real purchasing power for the next 5-10 years to purchase items you and your family might need to live or to buy an investment very cheap with no debt attached to it.
  • Fourth step: living quarters. Decide if you are going to stay where you are for the next 5-10 years or possibly move to another location. Whether you are renting or buying, make this decision based on the best information you have now. If there is the possibility that you will not be able to pay your mortgage, have a back-up plan of where you could go for 6 months to a year. Downsize what you own. Sell the extras and purchase items listed in steps 1-3. Now start back at step one until you have at least 6 mos of saved cash for expenses, stored food and medicine.

Advanced steps and long-term focus: after you have secured the steps above or you have more resources to protect, start researching these types of investments: physical gold and silver bars in several vaults in several countries, gold and silver mining stocks, and agricultural land. After the threat of deflation is gone, commodities, currencies of countries with natural resources and commodities. After the BRIC’s depression crisis, stocks in those economies.

We will have deflationary and inflationary pressures going forward and moving around the globe, gold and silver are excellent investments during both periods. The advanced steps are very dependent on whether there is an inflationary or deflationary environment. Stay away from all debt-related investments and invest in currencies carefully. This will be fast changing times. If you don’t want to expend energy trying to keep up, buy physical gold and silver.

At this time groovygirl is suggesting not to buy, sell, or update your home, except for preventative maintenance. Only make these moves if you know you will be in the same place for the next 10 years. The focus here is to preserve your purchasing power, have emergency supplies, and be as liquid and mobile as possible.

This is a normal investment cycle in which debt contracts. These are the investments and preparations that groovygirl herself (and her family) is engaging in for this winter cycle.

Research, learn, make a plan, work that plan.

Another important thing to prepare for: your mental attitude. Decide how you would pass the time if you couldn’t go to work for some reason or had no work to go to. What things could you and your family do to be healthy and occupy your mind that cost no money? Make a list of these things. Would you study? Would you jog? Would you plant a garden? Would you build things? Could you make some extra money at these things? Money is not as important as keeping your attitude positive. What would the kids do? Could you get your neighbors involved in a community activity/project?

This a winter cycle and it will pass into the spring cycle. But first we must get through the winter.

May 23, 2010

Latest letter from Martin Armstrong May 20, 2010

Click here (new link) for the latest letter dated May 20, 2010 from Martin Armstrong entitled Immoral, not Illegal, A Crisis in Ethics Repeating the 1930’s (15 pages).

Short summary: Mr. Armstrong talks about separating commercial banks and investment banks. That would be a start. This is a crisis in public confidence. Martin says that the banking model we use will always result in a crisis because of its very nature. Banks take deposits in the short-term and lend long-term to earn money on the difference between those two numbers. This works well until an economic downturn that happens every 8 years or so, when long-term depositors want their money back and it’s not there. Therefore….liquidity crisis. Constant booms and busts.

May 21, 2010

Gold/DOW ratio

Click here  for an updated Gold/Dow ratio chart from chartoftheday.com.

As you can see, it is continuing to fall in the current channel trend. This is the chart to watch, not the price of gold or the price of the DOW. In a hyperinflationary situation, this ratio will be the same (although probably lower), while the price in USDollars for the DOW and gold could be 4 or 5xs its current price. This chart tells you which is the better investment for a long-term business cycle. That would be gold, not stocks, since 2001.

If you want to get really creative, you could price gold and DOW after taxes (28% and 15% at the moment) and see the ratio then. The lower the ratio, the less large taxes on gold will not matter. It will still be a better investment (depending on your individual financial situation).

Here is another excellent post by smartknowledgeu that has 10 charts of gold vs. any investment. Gold has been the best investment over every global index expect India in the last 10 years. Very enlightening, but groovygirl wonders why you have not heard this info or seen these charts on F-TV? Ummm.

Answer: because the big investment houses (GS) can’t collect fees on gold expect through one or two ETFs. They make money by shorting the gold market and fleecing those ignorant enough to sell their gold in a panic.

Please buy and hold some physical gold, or silver, if you have not already. Even with the gold manipulation going on, it has still outperformed almost all markets. The economic environment that has driven this gold market for the past 10 years is still here. In fact, it is worse and continuing to get worse. There is no fundamental reason NOT to have some gold (or silver). In groovy girl’s humble opinion, it is dangerous not to.

From Jesse at his Cafe Americain, he says we have a possible tea-cup formation in the gold price. That means gold price down to $1150 is still OK. Don’t panic. We will see if he is correct. Click here. (Groovygirl posts these short-term price possibilities so that you can buy on dips for long-term holding, not trade.)

Side musing: we have another major liquidity crisis going on that the media/government is not talking about. A run on money markets from the European crisis. Click here.

Side-side musing: important information on Wikileaks founder. Click here.

Update: they totally gunned the DOW 150 points in the last 15 minutes. They are so much more obvious now….and, I guess, desparate. Anyone can observe the clear manipulation of these markets.

May 20, 2010

Could there be an Oil spill cover up?

Filed under: Credit Derivatives, Good Debt Bad Debt, Odds 'n ends, The Financial Crisis — totallygroovygirlfriday @ 1:32 am

Zerohedge.com is reporting that the White House is covering up the frozen oil blob at 3000 ft. that is about to hit warmer water.

We will soon find out, won’t we?

Click here.

Doesn’t matter who is in office, they all manage to f-up and then blame and cover up.

Sorry, groovygirl is just a little pissed off today. She is sick of media being asleep at the wheel and governments trying to cover up their mistakes. If they spend half the money and energy in their cover-ups, they could fix the original problems cheaper and faster. Oh, but that would make sense. It’s all just silliness to gg.

What are they going to say when oil is all over the shores of the east coast or farther? (Right now they are denying that the oil that is washing up on the shore of Key West is from this spill. Where is that oil coming from, another Gulf oil spill? This is ridiculous.)

They haven’t even managed to stop the leak for God’s sake.

Anyway, it’s clear to groovygirl that this is the worst oil spill in the history of the world and the impact will be global. Figure out what your personal risk might be and prepare. It is clear that the government will not help you.

Update: BP finally admits the leak was really 210,000 per day. The tube is now capturing about 5,000, but there is still “a little” leaking. (Groovygirl doesn’t trust anything these clowns say now.) BP says that 5000 barrels per day was always just an estimate. I mean, it must be so hard for them to estimate such a thing since they have only been in the oil business for 100 YEARS. Please. 

Click here. 

Ok, so 4 weeks at 210,000 per day, let’s see now, carry the 2, that’s…..5,880,000 million barrels of oil slowly moving towards the coast and major currents. Let the lawsuits commence.

Update: now BP is policing the waters. Interesting. Click here.

Side musing: Warren Pollock has a very good video explaining the recent German move to ban naked short selling of certain investment instruments. Click here. The bottom line is total chaos until everyone gets together and restructures the global debt system. That means someone holding debt will lose money. This is not the environment to trade in.

Groovygirl also really liked this video about monetization of people. Click here. This sounds like a 21st century feudal system to groovygirl.

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