Happy talk about economy soaring to new highs

Well folks, consider me puzzled concerning the last few weeks.  Precious metals have been clobbered and the $SPX has been making all time new highs.  There is a lot of talk out there about this being the beginning of some new recovery, as if all our problems are over.  Could it be that a bubble is being created to give the illusion of prosperity?  I wouldn't try to call a top here anytime soon, this could get into strange new territory, but this rubber band is likely going to be stretched some more.

CBO - US Economy Set to Soar On Obamacare
Really?  Wow, just wow.  Higher taxes and more government spending must be good then!  Debt?  What debt...

Dollar soars, stocks gain amid talk of Fed QE exit
The fed is about to start scaling back on QE...because things are improving.  Really?  We must be saved then!

Something Is Starting To Smell In The Bond Market
Hmm, so who exactly is going to be buying those bonds that the fed will be unloading (assuming they do)

Obama budget to take aim at wealthy IRA accounts

Well, there has been quite a bit of discussion over the last year or two about the federal government getting access to your retirement accounts, namely the 401K plans.  So now, the Obama budget takes aim at wealthy IRA accounts.  Hmmm, I wonder how the definition of a "wealthy account" will change over time?  Ten million?  Ten thousand?  Should we brush this off if we are not among those that the government feels is "wealthy", or has a threshold been crossed now.  The example of what occurred in Cyprus over the last few weeks has set a new precedent, that when the financial system and the governments of the world get desperate, they will take funds from not only tax payers, but your bank accounts and retirement accounts as well.  Zerohedge ran a similar story - Obama Proposes Retirement Account Limit In First "Wealth Tax" Salvo.

Currency war simulation

So what happens as central banks around the world start printing more of their currency to keep up with what the federal reserve is doing?  This video lays out a worrisome set of possible scenarios that could play out in the near future.  It sounds as though the script was almost made for a Tom Clancy movie.

Jim Rickards has a book with the same title "Currency Wars" and discusses in more detail, the things mentioned in the video.

US Taps Pension Funds To Avoid Passing Debt Limit

Gee, and here I thought these sorts of things only happened in places like Argentina and Spain.  So, now is Americas turn, as the US Taps Pension Funds to keep the spending levels in place without default. Seems like things are getting kind of desperate?  Calm before the storm?  How far down the road will this trick get us, a few more weeks?  Buckle up, it's likely to be a bumpy ride.  Americans are already feeling the pain of the new payroll tax increase.  Now government pensions are at risk as well.  How can they get away with it?

What $60 Of Toilet Paper Looks Like

It doesn't take much when going to the grocery store to add up quick.  The "official" numbers on inflation seem to indicate that things are "ok", but these numbers typically do not include food and fuel, the very things that most people consume the most of.  It would seem outrageous to some of our ancestors to spend the kind of money on such trivial things as we do now.  On a recent run to a Sams club store, I decided to load up on toilet paper.

Looting Breaks Out In Argentina Again - A Sign of Things to Come?

Argentina has had a rocky economy for decades now.  In 2008 the leftist government confiscated pension funds in an effort to stay afloat and continue their existing spending levels.  Ever since the economic crisis of 1999-2002 they have gone from one set of troubles to another.  Recently though, its heating up...again, as Looting Breaks Out In Argentina.  Could these things ever happen in the US? Naaah, this is the United States of America, the best country int he world!  That could never happen here, right?

Why Goldman Sachs Thinks You should Dump Bonds Now - What To Make Of This?

The last few months has seen a rising tide of commentary about the imminent popping of the "bond bubble".  I typically take "recommendations" from Goldman Sachs with a grain of salt, so this article on Yahoo titled "Why Goldman Sachs Thinks You Should Dump Bonds Now" kind of surprised me, as I have been looking for signs that the bubble is getting ready to pop.  Where things go from there, who knows, but it will be hard to keep interest rates from rising when this starts.

Will Japan Spell Trouble For US Stocks?

The return of Shizno Abe has signaled trouble ahead for JGB's (Japanese Government Bonds).  Japan is about to embark on a massive new phase of stimulus (see Abenomics is Back).  That's just a fancy name for what others know simply as printing new money.  This is currency devaluation on warp drive, and the numbers that Japan is talking about are huge, even by federal reserve standards.  So as the Yen depreciates, it will likely put upward pressure on the US Dollar, which will in turn likely put downward pressure on US Stocks.  Clear as mud?  Of course once you start going down this road, you never really know what the next surprise might be, as the unexpected has a way of happening. This has all the makings of the trigger event for things that have been speculated about for the last 10 years or more.

Willfully Ignorant and the Normalcy Bias

If your reading this, you probably have at least some doubts about the present-day world around you.  Maybe its the uncertain economic situation, or the constant chaos in other parts of the world. Its also likely that you may have expressed concern to some of your friends or relatives, who promptly brushed you off and suggested you not "worry so much".  If you have encountered this, you might be surprised that there is actually a name for this type of reaction, even when they are presented with evidence of the situation you suggest as being possible.

Pressure Canning Basics

Do you recall your parents or grandparents talking about canning food? I do, and recently I decided it was time I try it for myself. Its pretty easy once you get the hang of it. There are tons of resources on the web to learn and discuss issues dealing with canning, but again, the basics are pretty simple.  What got me interested enough to actually purchase a canner was the desire to preserve meat.  After doing a bit of research online, reading reviews etc, I bought the one shown below.

Spain Plunders Its Social Security Funds To Finance Debt

Do you think social security will be available when you reach retirement age?  The funds are supposed to be off limits to our elected officials. Governments and central banks everywhere are getting desperate to find ways to finance their current spending levels.  Spain recently started plundering 90% of its social security funds to keep funding its ongoing debt-ridden economy.  Will the US and or other countries do this?  Some say that the US Social Security fund is already empty, having been spent years ago.

Max Keiser: 2013, Year of The Great Crash?

Below is an interview that Alex Jones gave recently with Max Keiser, discussing his views of what could possibly transpire in the VERY near future, as in an April-May time frame! It will be interesting to watch the timing on this. Peter Schiff called the 2008 financial crisis and real estate bubble, but his timing was off somewhat.

First let me say this. With any of the information or comments suggested here, please do your own research and decide for yourself whether any of this is accurate or not, and what you should or shouldn't do about it. If you think Alex Jones is a nut case and completely refuse to listen to anything he says, then you probably need to go back to watching cnn, fox news or dancing with the stars, because I can't help you.

Fed Members Question QE Future - Whats Next?

Stocks got off to a bang the fist few days of 2013, but yesterday members of the Federal Reserve raised questions about the current program of buying US Treasury bonds and whether the current QE program should end sooner than expected. See Fed becoming worried about stimulus side effects.  Yield on the 10yr surged higher.  Is the beginning of something or the end of something else, or both?  Long standing rumors of manipulation or not, precious metals took it on the chin.  Remember, as yields rise, so does the cost of the US Government debt payments.

Suggestions For 2013

Another year has started and the world as we know has not come to an end yet, as some may have been worried about with the Mayan calendar rumors.  For one, I tend to think in more "practical" terms than some, as there are things I can simply not do anything about.  However, an economy that continues to go from one crisis to the next, is something that if you don't make an effort to prepare for, will erode your standard of living until you have very little room to handle the "surprises" that come up.  So here are some things that I have mentioned before, and some I am still working on myself.

Will The US Collapse Quickly or Decay Slowly?

There is no shortage of doomsday type discussions involving various scenarios with the US economy collapsing in ruin, decay and chaos.  Just hit YouTube and search on "dollar crash" or "us collapse", and you will find plenty to keep you busy.  Some of those discussions you find will involve well known economists, as well as average folks sharing their thoughts (and predictions).  Along with the search results you find, will likely be episodes of "Doomsday Preppers" which has been airing on the National Geographic channel, along with others who call themselves "preppers".  One thing is certain, at least to me, is that not just the US, but the entire global economy is in "uncharted waters".  So what is coming next? Will it happen quickly or be drawn out over years or decades?  Are there things waiting out there that could spark a new bull market?

A Glimpse At The Derivatives Market

If  you read any of the financial news of the last year or two, sooner or later you will see the word derivatives being mentioned.  The numbers involved in this area of the global economy are staggering.  A recent article over on ZeroHedge.com points this out. See 1000x Systemic Leverage: $600 Trillion In Gross Derivatives "Backed" By $600 Billion In Collateral

Bill Gross Thinks Bonds Will Stay Afloat in 2013 - on hot air

I have been picking up on a lot of discussion over the last few months about bonds being in a bubble of epic proportions   Some have said that bond levels are at 200 and 300 year highs in just about all of the G7 countries.  Recently, Bill Gross was interviewed on Yahoo to discuss this.  In summary he comments that US Treasury bonds will probably stay afloat in 2013, but do so on nothing but hot air.  What I am wondering is what happens when a good sized chunk of money starts to look for another safe place to be parked?  I have my own ideas.  What are yours?

Year End Market Review

So where do things stand as we start to close out 2012?  Good question, I really don't know, and that's bugging me.  It's still a bit early to tell, but the recent bounce that stocks have enjoyed could come unglued in the coming weeks. The idiots in Washington don't seem to want to address the real issues instead of lining their own pockets and asking us to pay for it.  Things are very choppy right now and that's likely to continue until some sort of trend emerges.  Here is a quick summary of my view:
- Overbought conditions seem to be in place in many areas.  Lots of overhead resistance.
- Volatile, trend-less conditions likely to persist until fiscal cliff talks are over.
- Don't assume things will get resolved quickly.
- Lots of speculation about a bond bubble and when it might pop.

Have a Merry Christmas

Here is to hoping you and yours have a Merry Christmas this year.  In these times of uncertainty, its nice to reflect on times past as you gather with loved ones.  No amount of money in the world can buy the things that really matter in life. Stay safe.

Market Review 11/23/2012

Well, a lot has happened the last few weeks.  The previous post on the fragile nature of the rally confirmed my suspicions that things were topping out. Yes, I left open the possibility that we could break higher, but I didn't feel it very likely.  So where does that leave us?