The China Button

So now more than ever, China and it’s relations with the US are an often talked about subject. I hear alot of talk that is ingorant of the true underlying relations the two countries share.

The first myth is that China has stole our jobs. Not true. China simply has a large skilled workforce and let me emphasize work! There is no other place in the world that has endless factories with employees who will willingly work 16 hour shifts to get the job done on time, and on budget, no where. America’s factories simply have too many wage disadvantages, labor laws, and unskilled workers. We have been out of manufacturing too long now to have been exposed to the new technologies. The factories we have left rely heavily on machines and automation to keep up with Chinas quick pace. Without China, there would be alot fewer products, and far more expensive products.

China is buying up America is another myth. The truth is that China is buying our debt. To the tune of 3 trillion dollars. Who loans anybody 3 trillion dollars? What kind of collateral backs up that loan? This is the reason behind Golds recent bull run. This will surely drive gold past the $1600 mark. China is fed up with Washingtons reckless printing and spending scheme. The world is watching as the dysfunctional politics play out on the center stage and everyone takes a spin at how to curb out of control debt crisis from pulling us back deeper than the great recession.

Watch your stocks and your dollars, this could be the big one. This could be a long, slow, steady downward economic trench we are heading to. The rising inflation, interest rates, gas prices, etc. will make the last recession look tame. I understand why S and P gave the US a poor credit rating. Our best option is to default China or simply print 3 trillion dollars and monetize the debt. We are not going to not pay them. So what will Washington scramble to do, once their plan to lower spending fails? They will turn on the printing presses and create enough money to pay China. That will send a signal around the world that the dollar is bad paper, and the markets will crash, the dollar will crash, and our economy, which is based on the dollar, will crash too.

Now more than ever, Gold looks like it could eventually surpass the $2000 mark. Stay tuned to the latest business and world news as it is critical to understand what is going on if you hope to survive this round of economic turmoil.

We really need to start looking at monetizing the debt and getting it over with as a viable option, in my opinion. We have to put limits on the federal governments spending, and limits on local governments expectations too. Our taxes will increase signifigantly, and you can bet entitlement programs will be on the chopping block. At some point, the phrase “it’s not what your country can do, but what you can do for your country” is going to be reborn in Washington. We are going to pay.

It is our own fault, for wanting everything. We need to be more reserved and less materialistic. We will have to pay this off and learn the lesson. We vote for them, we elect them, we direct them. We need to find balance, we have to stop the free ride mentality. We have to stop paying people to not work and sit on their asses all day.

Bottom line is, we have to swallow our own pill. No more stimulus games from the fed, no more increasing the debt ceiling. We need to get back to work. Everyone in America should share this burden equally. This one here is a game changer. This is going to be the beginning of the Change america voted for in 2008. I guess in the end, even though it was not brought on in a way intended, Obama did bring America change. By not doing all of the things he promised, he pushed us over the edge. We are currently in 3 wars, aiding several other countries in their recovery from natural disasters, paying a large portion of our society to not work or be productive, and footing the bill for most healthcare, to name just a few.

An economy, to remain successful, must have realistic expectations and practices. I think that we will be forced to change and hopefully, we will do so swiftly and confidently, so that we can get back to being a country that is realistic and constantly moving forward.

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All Rise

So the overnight markets show a steady incline in all precious metals markets. It looks as though April will be a memorable month for gold and silver. It is a long overdue position that is hinged on rising prices in gas and a 3rd war with seemingly no end.

Speaking of war, is the mideast conflict 1, 2, and now 3, at the point where it can be bundled into a new world war? Can it be looked upon as a world movement where ways of corrupt regimes with guns pointed at 3rd world social media starved populations are being pushed into a more democratic system?

All of the above lead to inflation. All of the above lead to higher oil prices, which leads to higher prices of everything. Conflict is expensive. Conflict is what lead us into recession. Conflict is going to send us back into another round of recession.

We all know what is said about not learning from past mistakes. It seems as though the stakes are much higher, but very blurry at that. We have taken the position that sitting idly by while mass crimes against humanity are undertaken by terrorist regimes, is not acceptable and must be stopped at all costs. Well, at least as far as Libya goes. We hope that by helping the rebel opposition militia’s that they will be exposed to us and accept the ways of the west and keep us out of their sights in the future.

hmmmm………

I hate to throw the Afghanistan card into the deck, but the pictures in the headlines look a lot like the Russian Afghanistan conflict where we supplied the rebels (Al Qaeda) with weapons, training, and money and that did wonders for the relationship between the west and middle east.

We all know how that story goes. We all know what Iraq and Afghanistan have cost us. We all know that these types of war have no end. I often question if it is even war? When there is no clear goals in victory, the fighting is never going to end. At what point do we exit? When the ruling regime is overthrown? When the successor regime is in power? When the population is satisfied and tired of occupation and outsiders meddling with its system?

On a refreshing note, the government may shut down as there is no budget. I hate to be the one to say it, but can we try this out for a few months? Maybe the government should shut down every year from June till late August, just like public schools. We can pull out of Afghanistan, Iraq, and Libya, and everyone can go about their lives. Come August, they can slowly get back into the game and start bickering amongst themselves and resume meeting with lobbyists to pass new legislation that alters all of our lives………….

Oh, I remind you to be on the lookout for radioactive Tuna, and pass on the nuke sushi….. I hear there is a large pool of freshwater in the north atlantic that may cause northern europe to freeze over and could disrupt marine life in the atlantic??? Also, there is a rapidly depleting ozone in the northern most hemisphere of our planet and has depleted at a rate far exceeding anything ever recorded in history. About 40% of the ozone has vanished into thin, well, atmosphere?? Time to put away the aqua net and aerosol spray cans again……….Maybe we can convert some old nuclear plants into ozone generators?

So with global wide disaster seemingly widespread and with cause, I want to briefly mention that Toyota is in the running for worst year ever. After being sabotaged by recall after recall, they now have a corolla that comes with a lifetime supply of potassium iodide included free. Seems as though they went from #1 to #cantcatchabreak.

Lets hope that gold will be propelled past $1500, and I am hopeful for some hyper growth in Silver, I’d like to see $55 by end of next week, while it is an unlikely gain, I am very short on patience. Sell your toyota shares and put it into silver. I am putting gold at $1480 by end of next week………..time will tell.

Spring Thaw

So with the dollar advancing, oil declining, and unemployment declining, gold & silver move forward on inflation fears. Obviously, with emerging economies creating more demand for commodities and other basic necessities of any given society, we face rising prices.

The government still bickering over a budget or facing a shutdown does not seem to faze much of anything. Would it make any huge difference if anyone was at the wheel anyway? I think the recent increase in economic indicators is a reflection of a more hands off policy and the economy working its own way out of recession. Too many people in the kitchen causes disarray in our system, much like the radioactive seawater pouring into the surrounding ecosystem in the pacific ocean, it is disruptive and chaotic, causing adverse reaction to any non ordinary action.

As for jobs, they may be at a barebones level, but that will remain. America no longer has qualified manufacturing or service. It is not that we cannot compete, it is that we choose not to. It has to come from the individual. Our education system is perhaps the single most important thing we neglect. Obama should have made his mark by reforming education, not healthcare. We really do not need more healthy people, no disregard for the unhealthy, but we really do need more intelligent people.

I think that Washington as a whole is a better scene now than 6 months ago. I think the economy is that much better too. I am hoping the republican party will back down more slightly and the democrats can reach out just a bit more, and come to a point of reconciliation. The public sector deserves a more functional system. For the average US Citizen, things are looking up. Jobs are beginning to recover. Health care is just around the corner, maybe. It is spring.

We still have to watch out for Oil & Food prices. Those two could cause a disruption in the recovery. We are not out of the woods yet. If inflation gets out of control, it can be the tipping point for many households. We are hearing less and less about mortgage woes and that is the best sign of recovery yet. Households are adjusting to joblessness and rising costs.

I think if I were at the wheel, I would be looking closely at alternative energy and looking at how we can begin the painful process of finding alternative ways to heat homes and provide electricity. The change should not always be focused on the automotive sector and lightbulbs. I think that getting homes off of oil and gas, and moving over to using sunlight, wind, and highly efficient pellet burning furnaces will provide a solid shift in our energy dependence. Maybe enough to keep oil prices within a tolerable range.

The second thing I would do perhaps is to try to regain some jobs by offering free training in what I see as attainable jobs. What I mean by this are jobs that people can be trained to do quickly and with a high rate of  success. Jobs such as website developers, factory workers, and clean energy products installation. If local colleges were to offer free courses for adults, then we can maybe expect to take some jobs back from overseas, and see a jump in homeowners using smaller wind turbines for electricity, solar panels, heating alternatives, etc. As for factory jobs, we need factories that are capable of producing smaller runs of various products. Versatile factories that can produce a variety of goods are better than ones that produce a single category of goods. I would attempt to reallocate funds that are normally given to the needy, and put them into an environment where they produce low-cost, high quality goods. It is better an option than our companies here going abroad to get an order completed within a budget. We are giving the money away anyhow. It just makes sense to me that it will encourage people to contribute.

With all that said, I think it just takes some creativity and some minor adjustment to get things back on track. I still see gold peaking at $1640. India demand is expected to remain significant despite the rising prices so if that is the case, we are good into next year. Sell every bit of gold you have at $1625, buy silver with your profits. Silver is long so hang in there.

I expect silver to be in the early stages of a long overdue bull run at market realized adjustment so look past 100 USD per ounce. With its many uses and short supply, it will be filling many safety deposit boxes for years to come, while industrial applications will depend on it for its versatile applications. Look at the relationship between platinum and palladium. While platinum backed off of its above 2000 USD highs, palladium slowly made its way to 800 USD as an alternative handy man metal special. Silver will do the same, and with renewed interest as an investment vehicle, it will give the $15o levels some testing, in my opinion. It is the alt metal for gold as a conductor, ornamental, and investment metal, so as gold is backing off, silver will continue to rise as demand peaks.

Enjoy the break in weather and for those heading off to vacation, R E L A X!!!