Monday, April 19, 2010

How Do You Measure A Paradigm Shift?

For the record, this is not a recession.  This is not even a very harsh recession.

What we are currently smack, settled, and complacently in the middle of is a Depression.  A rare, multi-generatonal economic "phenomena" that takes the vast majority of the population by surprise.

A depression is not the type of situation where supply has outpaced demand growth (due to minor levels of malinvestment, generally due to the meddling of money supply and interest rates), where the heat needs to settle in and the shelves need to clear some space before growth can resume.

A depression is where capital has gotten so out of whack with natural market forces that much of it needs to be put on fire-sale and fast. This isn't a run-of-the-mill recession where the government puts on the appearance of "fighting" it, and "providing jobs" that seems to work enough for the non-economically educated to give them some credence.  A depression is where generations of "help" from the government and easy money and credit have finally misallocated such a vast amount of resources and capital that the whole thing just sort of gives.

It would stand to reason that since this literal era of misallocation and malinvestment we have concluded took more than a few years (decades, is more like it) to play out, it would take more than one or two years to even partially correct itself.  Especially since it involves something humans seem to fight against tooth and nail.  Change - lots of it.

This massive misallocation of resources happens to include, in part, the attitude and ownership of financial assets in general.  Therefore, the following might be a hint of the future.

One thing I have been forecasting for several years is that the overall allocation of resources into financial assets will decrease sharply in years to come, especially measured against actual capital and tangible production.  There are still swaths of debt instruments that will be declared worthless or "unmarketable" as time progresses, and many other assets worth far more than their real value.  Migrating cash from these sketchier plays (where everyone seems to be going, to get the "yield" compared with high-quality debt) into something safer is certainly one of the smarter things that an investor could do.

Things are lining up for a major market top within the next few months and the coming downturn should put a more realistic perspective on a lot of things that everyone is "hoping" have somehow worked themselves out.

Have a great week!



  1. Is that NYSE chart not carving out a perfect head and shoulders pattern? A roll over from here would suggest a move below the neckline. Obviously there are many ways to react to your post. Short term you could buy here and enjoy the ride up as the GS dream team demolishes the inept SEC. And the market rallies big.

    Then, this summer in anticipation of drop off of the right shoulder completes-(this fall?) take long term short positions options and etfs, need time for this to play out.

    Long term, have food stuffs, power off the grid, plenty of ammo, and I think silver and gold may be a good thing too.

    Derek how are you playing this? Would appreciate your short, medium, and long term thoughts of instruments to best exploit the scenario you see unfolding.

  2. Most likely GS will "win" and I believe the SEC realizes this and that the real purpose of bringing the suit is to garner support for over all regulation. We "grown ups" are really just older children and our candy is money. The Glass-Steagall Acts were implemented for this very reason as they exacerbated the pain pf our last Great Depression. Former President Clinton and the so-called "Republican" Congress are culpable in deregulation. This along side Greenspan's easy credit paradigm are the main reasons for our current sitiuation. If some regulation is brought back and commercial banks must once again act as they should (not as investment banks using leverage, etc.) I believe this will counter that bouancy in the markets you predict regardless GS wins the lawsuit.

  3. There has been much recent highlighting of China, particularly since the focus of the Beijing Olympics which drew world attention to that vast country that had dwelt in the shadows for at least a couple of centuries - that's a long time.

    It appeared the world had passed it by. For around almost the past century, it appeared as though the world revolved around the United States economy, and, to an extent, it did.

    All this is causing false perceptions about many things - particularly political, and economic. And this is understandable.

    China is not Russia, it is not even Communist, at least, not in a way Marx would acknowledge.

    China is far more advanced than even most Chinese realise. Certainly than when I lived amongst them, and tried to get some of them to see it.

    We have a saying passed from one of our great writers, Kipling, - 'What knows he of England, who only England knows'. I guess that could apply to any nation.

    No, I will not go on, except to say that we should not allow ourselves to be guided by prognosis based on anachronistic economic formula.

    Derek is correct when he highlights the fact we must be ready for huge change. Change is a word we are going to hear much of, and its significance is going to be felt.

    The power of China, and I am not talking militarily here, as the full strength of China even in that fast becoming outmoded measure of 'success', will not be known unless they were ever put to the test.

    They never had a propensity for displays of aggression. Even the gunpowder they invented was more for celebrations, and the 'marshal arts' is a defensive form of sport.

    China will apply the breaks to any signs of over heating. This will be seized on by US media as a negative heralding that nation's collapse. Take it all with a pinch of salt as the saying goes.

    Their financial markets will rise and fall, that is the nature of markets.

    If you are lucky enough to be driving a Ferrari and you find yourself exceeding the speed limit when approaching a school zone, if you are smart you apply the breaks, it does not mean your engine is incapable of leaving that Ford Focus
    you are trailing through the zone behind when it is deemed safe, and it is in your interest to press the metal.

    At present this is a terrific trading market, and, unless you are in your late teens, or very early twenties with a bit of money spare you've had willed, you don't want to be looking at long term investing. Why? The world is changing too dramatically.

    Even the latest electronic 'gizmo' that makes a fortune for its inventor and producer, is soon outdated and surpassed.

    There are tremendous opportunities in the markets RIGHT NOW! Fear and nervousness will hold you back. You have to teach yourself how to handle caution, and keep it in its place.

    As you will notice, we are now entering a period where we are not measured by colour, nationality, religion or sex. We are only measured by wealth, and how we use it.

    Seize the day!

  4. Very full of yourself and wrong all the time. S&P 1200 was reached, next dow 12,000, then gold 1300

  5. Derek, you won't be able to time this shift.

    Ray, manufacturing is not a very valuable activity (China driving towards 0 margins by trapping domestic savings for mis-allocation internally with no free market competition externally for capital).

    The technologists cross borders and hold the burgeoning power:




  7. Shelby
    We are suffering because we have now little or no manufacturing industry.

    Population helps to keep wages down.
    Why do you think the US and its side kick the UK have been allowing so many
    to enter across their borders with only a pretence to keep them out?

    No, the people do not like it, but employers do especially the ones who thrive on cheap 'slave labour'.

    Do you think China has no technology industry? I was with young Chinese some years ago now who could build their own computers, and did. They could build a computer blindfolded.
    All this when few Americans and Brits had one.

    Many smart brains have now returned to the Mainland from Taiwan and set up their own companies. They are all Chinese.

    But if you want to believe that media crap it is all about to collapse, and you are trying to engage in the markets
    you will be grossly mislead, and will suffer accordingly. Trust me.

    Software is one of China's fastest growing industries and has been for about a decade at least.

    I am not Chinese. I have far less identity with that nation than I have with the US or the UK and Europe, so I do not sing praises out of patriotic fervour.

    I merely impart this information, take it or leave it, to counteract the nonsense dished up by media analysts that will cloud us from seeing and sensing the changes taking place in our area of financial interest in particular, and our life in general.

    But, by all means, act on your own beliefs - it's your money.

  8. Yes, I agree (before someone says it) it may seem a lot of blah blah blah...

    But, it is 'blah blah blah' that highlights what is reshaping our world and cannot be ignored if we want to understand what is happening.

    MUCH is as yet under wraps, but it is there.

    Here are some snippets to give some idea of why China is becoming so important, whether individually we like it or not.

    ".....Unlike Japan and Korea, the originators of brands like Sony, Panasonic and Samsung, who were fiercely nationalistic and continue to be so to some extent, China has not embarked on the same strategy. Rather, Chinese technology companies have taken on a role which comprises both a partner and a competitor. They form partnerships with rival multinational companies and in doing so, learn a great deal from them........"

    "...... Chinese internet start-ups are abundant. Chinese consumers are generally satisfied with the products and services offered by local service providers, such as search engine
    Baidu. And they have a good reason to be, as the services offered often mimic those of American internet companies.

    Chinese companies pick up knowledge fast and deliver what consumer want in a way that is most comfortable for the consumers.........

    .....This brings us to the subject of China-born entrepreneurs, affectionately known in Chinese as “overseas returnees.......

    .....Overseas returnees have been exposed to the technological developments around the world, and they bring their knowledge back to China.

    Often, they also manage to secure funding from overseas venture capital firms, and are ready to unleash their power in China........"


    I believe these changes are going to present us great opportunities. Stay OPTIMISTIC and if you are not, then get so.

    I have never yet met, or read of, one successful ENTREPRENEUR who was pessimistic.

    As I have informed, writing it down keeps me on the ball. It is so easy to forget and get side tracked into old 'comfortable' but 'unprofitable' thinking.

  9. There is a most interesting and well informed article at about the reported dynamics of the Chinese economy written by a seasoned professional economist. I strongly recommend you read it if you want as an objective a picture as is possible.

  10. I see that the Elloitt Wave team - Prechter et. al. - are also hugely bearish and predicting that the fall off from the right shoulder could be due as soon as NOW....and latest 7th May.

    I am going SHORT using this view; but the heavens know what to do for the long term, given Keynes' dictum on the long term maybe just buy a coffin ? What do you think Derek ?

  11. Andrew, and anyone else thinking of going short. My simple advice from which I have learned from experience, mine and others, over the years - do not try to be the advance guard.

    Wait until it turns (pivotal point is breached). I do not feel there will be a crash as the small guy is not in except by proxy, Institutions et al.
    And it is when the masses are in that we have crashes. In fact, even in the 'crash of 29' the long slow fall came later. So, there is always time to catch the 'trend train' and make money.

    Going in too soon, Andrew, and with such a pessimistic view as to even mention 'coffins' could make it, for you, a self fulfilling prophecy.

  12. Dow has reached its immediate peak today. Expect Dow to correct to 10,850 (probably by next week) before moving higher to meets its target of 12,000 plus in May.

    The target level for S&P correction is 1150.



  13. Andrew, here is the correct link for crisismaven blog on china:

    Ray, if China is so good at making software, how come they have not produced any commercial success outside of China? Rather what you have is a captive audience, due to state censorship and the natural language barrier.

    China is competing with slave labor. This worked for the Southern USA for a while too. It has worked for the banana republics too. And just look how backward these turned out to be, when the big shift came (e.g. end of slavery in south, or the plunge in sugar prices).

    Ray the bottom line is that centralized economies NEVER outperform free market ones.

    China is doing relatively better primarily because the rest of the world is becoming more centrally managed.

    But the who world is headed into massive unemployment, because of factory automation. The future jobs are for the intellectual work. The designers, the engineers, etc. In short, the information revolution.

    The USA is not suffering because of losing manufacturing jobs. The USA is suffering because the people got binged on debt.

    Immigration is a good thing. It means a freer market. The most robust economy would be the one that has a completely open border.

    Free markets always win. Centralized control always loses.


  14. Shelby

    You have much to learn, and you are obviously destined to learn it the hard way. As I have said, it's YOUR money.

    I want you to think about something.

    China is sitting on one huge pile of cash, and it is growing by the second, faster than she can spend it. No other nation in the world has had this enviable position.

    Unlike the UK, and the US she is not hampered in decision making, and can take swift action when required, by not being saddled with a pseudo democracy. Yes, I said 'pseudo'.

    China is calling the shots without opening her mouth and that is what fools. The way she handles her natural disasters tells all that one needs to know, about her character.

    We in the West have much to learn about human relations, and 'family'. We are governed by 'aliens' (no not the flying saucer variety) inconsiderate to our national aspirations.

    The Chinese are run by 'family'. Hard for us to understand who are not weaned on Confucian values.

    It is Confucian values which bind the Chinese all over the world.It is Confucian, not Marx's policies which are behind China's growing success.

    It is not something they have to work at or think about. It is inbred into them over centuries, neh, millenniums.

    Learning their written language is a brain exercise they all have to go through from childhood.

    Unlike our language, they have to remember each character individually, there are little clues as to its sound or relationship one to another in the same way as ours.

    It all depends on memory. This is why they pick up something very quickly.

    Most are not aware of this themselves because they grow with it and do not know any other way as children.

    They have an aptitude, and capacity, for learning which is amazing to an outsider.

    Until recently they were held back by lack of opportunity and money backing.

    They were thought of as backward peasants by the outside world. Many saw them with pigtails and pulling rickshaws wearing cooly hats, or at best Chairman Mao uniforms.

    Now they have a growing opportunity and a growing money stash to finance them.

    If they wanted they could flood our markets with software, beautiful, technically advanced cars, civil aircraft that would hit Boeing, and Airbus, and many other items that would destroy our economy completely.

    We could not compete.

    So, why don't they? They are not stupid. Where would it get them?

    I am not going on. You will see how it plays out. You play it your way. I will play it mine. I have experienced both sides first hand.

    I know which system will win. And, if you haven't yet noticed, we are being moved more in their direction.

    We have no option but to focus on technology, we have nothing else, and no money to boot.

    They have both manufacturing and technology and vast amounts of CASH.

  15. "They have both manufacturing and technology and vast amounts of CASH." Once again add amazing learning power. Look at virtually all public high schools in this country, who is graduating at the top of the class? It ain't whites, It ain't blacks, its not even Hispanics. Its all Asian/Indian. Here's the kicker, people in this country dismiss this as "well its cultural for them and if we spent as much emphasis on school we would do just as well." It's genetic. Same as if white guys didn't have so many other opportunties for careers, they would still lead the NBA? Genetics baby.
    China's thing is brain power and its being unleashed with a lot of patience. We don't know what patience is in this country. Fool's rush, and that's what we always do here. Did we rush healthcare? or do you think we got it just right? China has no problem waiting 50 or 100 years because its not about any one individual whose life may come and go, its about the life of their country which will succeed.

  16. Ray,

    If China is so great at technology, why did it produce capacitors that explode:

    Also apparently you did not read the link I provided for crisismaven. It explained how China is rapidly wasting it's cash hoard. Essentially the capital moved from western debt addicts to China's central managers, and now wasted on increasing production beyond supply. The GDP numbers are lies (more like nominal GDP without the inflation adjustment).

    Ray you don't understand the basic concept of economics, which is that the free market always wins (meaning no interference by central managers against individual opportunity cost). China is prime example of state misallocation. As I said, they are forcing all private capital to stay within the country. This is causing a massive misallocation globally and internally.

    This will result in an epic global crash, and old world banksters have this planned out as a way to move the world to NWO.


  17. Ray,

    I will repeat again, that the loss of manufacturing is not what ails USA.

    It is the inordinate rise in debt, that enabled Americans refuse to adjust to the new opportunity costs of the information revolution.

    The highest value activity is not in making stone tools, plowing a farm, being a blacksmith, nor in a sweatshop. The current computer/information/software revolution is having effects similar to the labor replacing machines invented in the textile/industrial revolution. China's current centrally managed attempt to monopolize the dying industrial model, is the death throes of it's centralized communist political system!

    Empires die when they don't adjust to labor-saving technology, read about Roman empire's preference for slave labor over technology:

    Google for "ENTERING AN EPOCH OF SOCIAL REVOLUTION", then search for "
    Search for "Every schoolbook
    states that the industrial revolution brought down feudalism" in this document.

    The Luddites resisted the textile and industrial revolution, but ultimately these labor replacing machines actually created more prosperity and higher employment!


  18. We can see it with their censorship of Google. Their resistance of technology which enables individuals to make their own free market decisions. I can even argue that China is causing the debt binge in the west and causing the resistance of the globe to adjust to the new technology revolution. China is holding everything back. China is feeding the boomer debt/entitlement addictions.


  19. I forgot to add the title of the prior comment:

    China is resisting the computer revolution


  20. We can see now the effects spreading globally with the recent expose on the secret global ACTA treaty negotiations. The state legislates when they have no solution to technology shift. Technology (nature, increase of entropy/free market of diverse actors) always wins!


  21. Let me repeat what I have written in past, which is that manufacturing is becoming increasingly automated, and China is driving profit margins to near 0. This is the death throes of the industrial revolution. The profit is in the design/engineering of the products and machines to produce them.


  22. Shelby

    Before I address your posts, let me quote an example of your argument

    You start by saying -

    "...If China is so great at technology, why did it produce capacitors that explode...."

    That is like saying, if the US is so great at technology, why did it produce a rocket that exploded killing all on board.

    I could go on listing many analogies that make your comment too ridiculous for words

  23. Ray,

    The point is that China is operating at near 0 margins and this is why they used a faulty electrolyte in their capacitors.

    They cut costs by destroying their own environment (just west did in our industrial revolution).

    The problem is the industrial revolution was 100 years ago. China is too late, and the way they gain market share is by cutting costs and this is accomplished by trapping their capital inside the country and not letting it seek higher opportunity costs.

    The fact that China can not allow unlimited access to information is proof enough.

    Ray from your writings I can detect that you are not that knowledgeable, nor intelligent. What is your IQ? Mine is between 130 and 140, and it is off the charts (genuis) in "visualization of mathematical correlations" realm. My IQ is just average in the verbal or mastery of communication, which is perhaps why you may not be able to understand...


  24. Also please differentiate private sector manufacturing from public sector rocket programs. Public sector is always less efficient (more mistakes).

    The known risk of rocket technology is orders-of-magnitude greater than capacitor manufacture. Standard electrolytic capacitors are mature and easy technology.

    Everyone knows that China produces inferior quality products. This will improve over time as they learn that people will pay more for quality, but the point I am making is this was not the economic incentive given to them.

    The govt has basically given them free capital to produce at 0 profit margins, and so they careless about profit and care only about volume. It is all about pumping up their GDP and employment, as billions of people unemployed is main problem in China.

    I told you this is a huge liability for China and it is the death of the industrial revolution, as margins are driven to near 0.

    Just go think about it for a few weeks Ray. You will eventually get it.


  25. Ray,

    I know someone who does manufacturing in China. And he said (prior to 2007 crash) that manufacturers float on their suppliers' capital. They will refuse to pay for greater than 90 days. And they lie, cheat, and steal. I read an article yesterday, about how popular it is to work for state company, steal all their clients, then run your private company from your office at the public company. Then eventually leave the state company after some years, taking the clients with you.

    The entire system is one of connections, favoritism, etc.. This is a failure oriented economic model. Study entropy and the free market.

    Ray you are stooped in "mystical" dogma so deep, I don't know if you can smell how much it stinks. Go back to pure science. The entropy of the universe is always trending to maximum disorder (i.e. maximum independent actors/probabilities aka "disorder").


  26. The basic family values in China may be good, but there is one major thing missing. They do not demand freedom. Chinese have learned to co-exist with their lack of freedoms. But freedom is necessary for a free market and to prevent the massive misallocations that are happening now, which are going to drive China into the ground again.

    The basic problem boils done to the people placing too much trust in the government and the communist system. In fact, they are quite proud now of their system and its recent accomplishments. They think the system is working for them, because their middle class is expanding. They don't see the massive leverage in real estate and their savings being wasted on over production of high volume, low quality goods and other misallocations (e.g. brand new cities with no one living in them, etc).


  27. Shelby

    For your information, I attended one of the top, some say THE top faculties of economic learning in the world - the LSE (London school of economics).

    The most important lesson I learned during my stay within those hallowed halls was why Economists always get it wrong, at least in major issues, that really matter.

    Academia preaches theory which is based on a world where 'scoundrels' (and that is the lesser of the defamatory labels I could come up with) do not exist.

    According to Academia our world is only run by people with the highest of morals, and business ethics following the doctrine of He, of whom it is said, and believed by His followers, was nailed to a cross around 2000 years ago.

    The top movers and shakers of our world, to me, attend these Academies to learn how these pseudo economists will react and direct others from their programmed 'theory', so that they can then use this knowledge to confound them by 'real economics' based on their simple formula 'He who has the most gold ( money power) calls the shots.

    This works because this power, and only such power, puts them in positions where they can manipulate the system, and even create the system according to how it works best for them.

    Unlike physics, there are no 'laws; of economics. only 'theories'. Theories can be manipulated, and are continually where money and power are concerned - as in politics, and economics..

    That dear Shelby is probably way over your head, otherwise you would not ask me to refer to some economists that abound on that blog to which you subscribe and hold in such esteem.

    One quick glance at it was enough to tell me why your logic is so screwed.

    I am not wasting anymore time for me, and others, refuting your weak argument you use to support your view. It is one that weakens by the evidence as the days roll by.

    To me it is equivalent to arguing with someone who insists the world is flat, and quotes from 'the Flat Earth Society which sprung, I believe from passages in the bible ( which should appeal to you). Not even photos from space will move them from their belief.

    You stick to it, Shelby, and follow your beliefs while we still have much of this freedom left. Let all make up their own minds, if it works works for you, stick to it.

    As they say in X Files - 'The truth is out there. So far. to me. Napoleon's prophecy on China made just over 200 years ago, whether one likes it or not, is right on the ball.

  28. Ray,

    I have not subscribed to economic theory as taught in the institutions. Fortunately I was not a victim to that abuse of having to attend one of their indoctrination centers as you claim to. I am using fundamental theorems of physics, such as the 1856 law of thermodynamics, which states that the universe (a closed system by definition) is trending to maximum disorder.

    If you look at the equations for entropy in any discipline, what you understand mathematically is that increasing disorder is correlated with increasing diversity of actors (increasing possibilities).

    Thus any force which attempts to direct a mass of matter (e.g. a group of formerly independent decision makers being constricted by a central control), will fail eventually. These forces must act with exponential increase in order to counteract the opposing force of the direction of entropy in the universe. These exponential bursts of order, are local (closed systems) while the global system is acting upon them to break them down.

    TPTB (the elite) can operate only within trends of entropy. They are currently aligned with the human nature that aspires to debt and to be taken care of (order provided) by a government authority. But this trend is an exponential order that ultimately leads to widespread failure for the entire world. This mathematically inevitable outcome of human nature was predicted 2000 years ago, as it was written down in Revelation.

    China as an actor in this trend is already documented in Revelation as the red dragon. But I don't subscribe to the Biblical theories, rather just note when they correlate to physical science.

    Napoleon was also a victim of his own exponential push for order, and so will follow all those elite who attempt to defy the trend of the universe.

    China's elite know their system is failing. They don't care. They are milking it for maximum gain, and they have already sent all their children to Vancouver and will flee when the shit hits the fan.


  29. Ray,

    I suspect the top level of TPTB are purposely aligning to the human nature trends that drive misallocation of capital and failure (e.g. desire for debt, desire for insurance, desire for order/govt, desire for laws other than natural laws). I think TPTB have tried to maximize this push for failure. China and West have been played off as symbiotic elements of maximizing this failure.

    Out of this failure, will exist a huge belly of "useless eaters" and major problem for the world to feed them, because the misallocation of capital is going to drive massive shortages and widepread failure of economies.

    This is a trend of society towards a world government. The Bible talks about this trend of human nature and explains that man can only remain free by "not being surety to a friend", "not choosing to have a govt" (1 Samuel 8), "no idoling things of this earth" (e.g. laws, govt, order).

    At the same time this failure trend is occurring, there are zillion lights of new freedom occurring. Remember the exponential equation, "small things grow faster". A kid can double his net worth in an hour, buying a can of cold coke on a hot day, and selling it for double price at stop light.

    Those who have studied this math and see the correlations to the wisdom in the Bible, will always be free. We understand the limitations of TPTB. We understand their weaknesses.


  30. Chinese elite understand Ying and Yang, so they too understand very well that China can not rise up on the back of massive debt addiction in West. This was not a wise model of how to build a sustainable China. This was a model of how the elite could cash out and maximize the global failure necessary to bring about dependent class to drive the NWO.


  31. Shelby,

    Why do I persist, or should I say 'bother? (That is a self directed question so ignore.)

    The only entropy that comes across to me, is that which is enshrined in your explanations with which you desperately endeavour to make your point, and refute mine.

    You jump back and forth between social science. economics, physics, religion, including many branch areas to the point where you lose me completely, and I feel lose yourself.

    You provide an excellent example of one meaning of entropy for anyone requiring an understanding of the word as it applies in communication technology.

    I am getting the impression you have made yourself a victim of your stated high IQ. You are suffering from TMI. It is mish-mashing around your head and confusing the issues with which you are trying to come to terms. By that, I mean, what is going on in our world in general, and the markets in particular

    When I was at school, we had a saying, "when all else fails, blind 'em with science".

    I am getting that feeling now, but as an intended victim.

    My best wishes, sincerely, but for me now - back to the markets. It's money making time.

  32. Ray here is a simpler bubble factoid for you:

    "China certainly is well aware that 60% of their economic growth in recent years is construction related. Did you know that? If China is popping a huge construction bubble that is 60% of their economy then why is everyone talking about using basic commodities as an investment haven? There is a difference between a haven and a speculation. Commodity markets are speculation markets right now. That makes them subject to wild price swings."


  33. Ray Coarse's Theorem is there are no externalities, only transactions costs. Nature will also route around any artificial barriers to maximum efficiency, the same way as a river will always route around a dam given enough time.

    Coarse Theorem is just another way of stating the 1956 law of Thermodynamics that says the universe is always trending to maximum disorder.

    If you don't understand these concepts, then you won't understand me or what I am writing about.


  34. Shelby,

    I can find and post many links that decry China and many that point to its imminent economic collapse so I do not need you to provide them for me.

    I have heard all the reasons they give, and I would say that most of the writers have never even been to China.
    Not that would make much difference to most of them, if they had.

    They get a bee in their bonnet, and/or they know their readers love to hear anything negative about China, so they oblige. And the masses lap it up.

    But write that some place is doing better is a writer's suicide.

    In fact it is getting now that America loves to hear anything negative about anywhere but home. It makes then feel they are not alone, or even elated if they hear about someone else being worse.

    Believing that China's days in the sun are numbered gives great comfort. I mean, how dare another nation be better, especially with another system.

    I guarantee, and you know it, that if China could not hit back hard, American
    troops would not be messing around in that pitiful nation of Afghanistan, they would be going to the defence of Taiwan, Mongolia, or Tibet, any excuse
    to smash China and carve her into easily managed pieces.

    And the Brits would probably be reoccupying Hong Kong
    (no, they would never have handed it back)

    All I am concerned with is how the markets are affected, and will continue to be for a very long time by
    the Chinese economy, and the way they do business in all those areas of the world which are coming out of the dark ages, and which we exploited for centuries.

    China is forcing us to change our ways.
    To me, this is a plus.

    China has now the world's largest bank.
    It has a car market that is now surpassing that of the US which has been the largest ever since cars were invented.

    China just recently became the world's largest gold producer, and soon it will dominate the gold market from Shanghai.

    Of course there is heavy construction going on. It has the money, and it needs infrastructure and buildings to keep pace with its growth.

    China has trillions in currency reserves. It has to use them up. It needs vast super highways, and it will build them.

    But enough. As I said, Shelby, stick to your beliefs if they are working for you.

    Mine are working for me. If things change, so will I.

  35. Ray,

    You are a certified idiot. You speak of "largest" but you forget to divide by the population to get a "per capita" normalization.

    And you wrote nothing which refutes the hard facts and economic realities of bubbles.

    Where do you live? I've been living in Asia since 1994.

    Marc Faber lives in Asia (has a beachfront home in Vietnam) and visits China regularly:

    China Bubble?

    Is China headed for a bubble? “For sure,” said Faber. “The symptoms are there. It is a bubble when something goes substantially above the trend, when there is excessive credit gross and when there is excessive speculation. All these elements are in China,” said Faber who predicted the Japan and NASDAQ bubble collapse.

    “If everything is so great in China, why is the Chinese stock market lower today than it was in August in 2009?” he asked.


  36. Ray,

    I am not disagreeing with Asia being a large mass of population with improving standards of living (wealth). No one can deny that trend. It is obvious to anyone here in Asia.

    That is not the point! You are missing the point.

    The point is that this growth is being mismanaged in such a way that there is going to massive failure and setbacks along the way. Just study the data and this is obvious too.


  37. Shelny
    So you also pay homage to Fabor who believes bringing an action against Goldman Sachs is not because they have been found involved in fraud, but it is all down to an act of anti-Semitism'

    Because of this, he says, it will have no impact on the markets. Well he is probably right there. We can all forecast that, and have done, right here even, since we first heard of it..

    He is known as Mr Doom and Gloom, especially on China, and has been for years.
    Yes, Fabor has been calling a China bubble for years - years..

    China does not see 'bubbles', she sees 'balloons'. Balloons, unlike bubbles, can be let down gently when blown too big.

    As for his remark - 'If China is so great why is its stock market lower today than it was a year ago'. Now I see where you get your screwed reasoning from.

    That is as an illogical inferred assumption as the man who sees a Ferrari travelling behind that little compact family car in a school zone and says - if Ferrari's are supposed to be that good, why is it trailing behind that Ford Focus.

    How on earth did you get that so high IQ that you claim? Did you use a 'test yourself' kit?

  38. Ray,

    Why would you assume I have adopted Faber's logic about China's stock market? I can quote him and his reasons, without adopting his logic. Learn to not conflate, it is the enemy of rationality.

    Still you fail to refute factually any of the arguments I made on this page. You just continue to repeat an subjective assumption that China does not have to obey the laws of nature.

    Here is some data on flows:

    What we can clearly see is the the rich are routing 60% of global trade through tax havens specifically to skim all the profit off and leave the misallocation of the current global mess to society.


  39. Also your analogy of Ferrari to stock market pricing illustrates that you do not know the difference between a controlled action and an uncontrolled action.

    The stock market is priced by the laws of nature, the Ferrari is controlled by one foot.

    If you argue that China is holding back on their potential, I will agree, and due to the laws of nature, this means they are radically mispricing and mispricing has massive misallocation effects.

    Ray can you not get it in your thick skull, that there is no way the communist party can control every effect and action from the mispricing they create from their controls? Wikipedia "Butterfly effect".

    Ray you are ignorant.


  40. 1 oz of gold is worth the productive capacity of a man's life

    [quote="page 2 - 3"]...Thanks to cheap energy (that would have been men’s labor), over 80% of the known above ground reserves of Gold have been extracted from the earth just in the last 100 years...

    ...In ancient times, one ounce of Gold was valued at the amount of productive capacity of a man’s life...

    ...Yet even with the advances in how much has been mined by use of cheap energy, the ratio of Gold per capita has remained fairly constant...[/quote]

    There are roughly 160,000 tons x 31,000 oz = 5 billion oz. So yes still roughly an ounce of gold per person in world.

    So either the western world with it's [url=]OECD GDP per capita of $26,300[/url] and the global GDP per capita $9118 (source: World Bank) is over-valued and due to plunge, or the price an ounce of gold needs to rise to between ($9118 to $26,300) multiplied by global life expectancy of 69 years (source World Bank).

    So either we are going into a severe fiat monetary deflation (very unlikely) or the price of gold needs to rise to well over $100,000 per ounce.

    So if the value of gold of gold is headed north of $100,000, then this surely indicates that those who hold gold are going to be the masters of a multitudes of slaves.

    This is the future. I urge you read my recently expanded writings on China:

  41. P.S. I do not expect overly remote agricultural land to hold its relative value in this extreme upheaval coming. This is mostly a monetary mis-pricing and the reversion to mean will be mostly monetary (gold!). Because for one main reason, is that energy has to rise at about the same rate as gold, which is going to eliminate much of the profit on agriculture and is going to have the effect of constraining demand. Read the link above for more charts on end of cheap oil. I do think long-term, there is more than sufficient energy, if the price is high enough. It will take the world a while though to recover from all the mis-allocation caused by the artificially low energy prices driven by effects of artificially low global interest rates driven by Yuan peg and other mis-pricings (controls over) the free market.


  42. If I continue any futher trying to address your confused mental meanderings, I will consider myself ignorant of what can only result from trying to engage in well reasoned argument with someone who is mentally unstable.

    Let's see, you quote Faber to support your argument, yet you say I am not to
    assume you support his?

    Well, that is sound logic ( only if your balance of mind is unsound) (two opposite poles attract)

    Then you say ' The stock market is priced by the laws of nature'

    That's where we have all been going wrong eh?
    In our ignorance, we thought, or at least, I and so many did, that it was priced by such things as money flow, and supply and demand plus sentiment with a little suspected manipulation of these factors thrown in.

    But alas, it has nothing to do with human activity, it's all decided by Mother Nature. And did she also create the stock market?

    Have you ever thought of becoming a stand up commedian? No, I'm serious.

    If you can keep a straight face and focus your undeniable talent for fuzzy logic as humour on a 'Financial' theme, you could be a hit.

  43. TRUE monatary (which is what we are concerned with in the markets) value of anything, and that includes gold, is what you can get for it in goods or money in the market place.

    But we also have to consider time affecting value. Can you effect your trade right when you need it, or will there be a wait in order to get a better value, or because of lack of demand.

    Will holding out introduce a change that could lower the value.

    On the top of this we have that old basic yardstick of Economics known as 'supply and demand'.

    Can supply and demand be manipulated?
    Of course. And it is quite often.

    The market could be flooded with diamonds if De Beers did not control the supply. They could crash the price
    in seconds, and virtually destroy the jewellery trade.

    Lower down on the scale, farmers have been known to dump milk to keep the price from falling.

    The oil cartels turn off the spigots to keep up the oil price, or increase production to pull it down.

    Why would they do this? By pressure from the world's economies. A destroyed economy makes a poor customer.

    In whose economy are you effecting your trade.......

    And that is only a few of the variables.

    You see, there are many variables that require the 'value' assessment to be qualified before arriving at anything meaningful.

    I have bought gold retail in New York and sold it to a dealer in London hat a good profit, even larger than the 17 1/2% I saved on the VAT (value added tax)

    What point am I making. The amount of gold that is published as existing, even if correct, and the world population figure, does not give us a meaningful, by any stretch of the imagination, yardstick for any assessment of the value of gold.

    And this applies to most things.

    Never be blinded by those who throw science at you. Reality experienced is much more simple to assess.

  44. Wow! Shelby and Ray Show. See it first on Derek's Blog and find it next on Live AM Radio.

  45. "Let's see, you quote Faber to support your argument, yet you say I am not to
    assume you support his?"

    Correct. There can be many people adding the analysis and some people might find it to be in support of my analysis, but that says nothing about whether my analysis overlaps his. To not get that set theory correct, shows you don't have a high enough IQ. And that is why my concepts seem disjoint to you (they are not to those with higher IQ), because you don't have the IQ (nor the training and knowledge) to see the logical correlations in what I am writing about.

    "But alas, it has nothing to do with human activity, it's all decided by Mother Nature."

    Human activity conforms to the laws of nature. All activity in the universe is conforming to the laws of the universe.

    Meanwhile I have been doing something productive:


  46. "I have bought gold retail in New York and sold it to a dealer in London hat a good profit, even larger than the 17 1/2% I saved on the VAT (value added tax)"

    I sold over 10,000oz through from USA to Finland (another 5,000+oz in USA) at 10+% profit margins when silver price dived in 2008-2009. I bought the ETF, rode it up, then repurchased metal at lower spreads when the prices normalized, pocketing the spread.

    Ray, you write about the numerous variables that can affect pricing. This is the free market at work. The greater the number and granularity of the actors and variables, then the more smooth (less disjoint) the free market operates, but IN ANY CASE eventually the entropy anneals to the path of greatest disorder. Disorder is a mathematical term that means the greatest freedom for the greatest number of independent possibilities.

    This is the most fundamental law of nature. It was stated in 1856 as I said. But it is observed in every theorem and outcome in science and life.


  47. You see one human may be able to do something completely foolish and away from the trend of maximizing disorder (which is what nature is always doing on the big trend), but something which is an aggregate of a multitude of independent actors (humans, computers, processes, govts, etc) like a stock market is much less likely to move countertrend to nature's desired path, and in those cases where it is able to be so centrally controlled and manipulated, then you can be damn sure that nature is going to destroy it eventually. And this is what is going to happen to the centralizing efforts of the govt in China. And the Chinese people will benefit immensely from the demise of their central authority.



    "A correction in China will occur when there is more monetary tightening, said Saxena. When this will happen? Saxena does not know. “One thing working in favor of Chinese assets is that China doesn’t allow the Chinese to invest overseas – so the money is all contained within the economy,” he said."

  49. Shelby,

    The only disorder that should be of serious concern to you is that contained within your mind. And, the more you write, the more that disorder is evidenced.

    I will point out just one of the many

    You write:
    ".....Also your analogy of Ferrari to stock market pricing illustrates that you do not know the difference between a controlled action and an uncontrolled action.
    The stock market is priced by the laws of nature, the Ferrari is controlled by one foot."

    And when I point out the errors of your unreasoned explanation, you come back with

    "....Human activity conforms to the laws of nature. All activity in the universe is conforming to the laws of the universe........"

    Therefore, even by your fuzzy logic this means that the foot controlling the Ferrari is also conforming to what you claim are the laws of nature.

    Consequently,both actions described in my analogy correlate.

    There is a well reasoned saying that when you are digging yourself into a hole, stop digging. But I am sure you will dream up another spadeful of attempted -'blind Ray with science' .

  50. You write

    "..Disorder is a mathematical term that means the greatest freedom for the greatest number of independent possibilities...."

    If that is 'disorder'. Then what is 'order' - lack of freedom?

    Mathematics Disorder (Dyscalculia)

    What is mathematics disorder?
    Mathematics disorder is a learning disorder. Children with this disorder have math skills is much lower than average for their age, intelligence, and education. The disorder affects the child's success at school. About 1% of children have this disorder. It affects boys and girls equally. It is also caused dyscalculia.

    Now I can see that is where you slot in

    Therefore, I think the 'Disorder' you are attempting to explain is known in mathematics as 'Chaos' (Butterfly affect etc.)

    But then your explanation would fall short there.

  51. Tou say,
    ..."Ray, you write about the numerous variables that can affect pricing. This is the free market at work......"

    Who said it wasn't. Read the context to which I made that comment

    To refresh your memory it relates to your explanation of assessing value and nothing about questioning 'free markets'.

    That would be another story as to what constitutes a free market. 'Free' and 'freedom' are grossly misused terms that roll off politicians tongues as easily as 'love' does from a young guy trying to break down his date's resistance to his advances.

  52. 1) Ray wrote:
    "Therefore, even by your fuzzy logic this means that the foot controlling the Ferrari is also conforming to what you claim are the laws of nature."

    2) Apparently you failed to read what I wrote:

    Shelby wrote:
    " human may be able to do something completely foolish and away from the trend of maximizing disorder (which is what nature is always doing on the big trend), but something which is an aggregate of a multitude of independent actors (humans, computers, processes, govts, etc) like a stock market is much less likely to move countertrend to nature's desired path, and in those cases where it is able to be so centrally controlled and manipulated, then you can be damn sure that nature is going to destroy it eventually"

    3) Thus there is no "goof" nor "fuzziness" in the logic I have presented here. The fuzziness is apparently the inability of your mind to grok the concept on the whole. Let me explain #2 to you in terms of evolution. Nature puts all possibilities out into the wild, and only the strongest (i.e. the outcome most adaptable or compatible with the overall trend) survives. And a verifiable factor of nature (in all forms and sciences) is that entropy (aka disorder or randomness) is always increasing on the overriding (longest durational scale) trend. In the short-term, nature must allow exponential trends that are counter-trend to the ultimate outcomes. This failure is part of the free market.


  53. 4) Ray wrote:
    "'..Disorder is a mathematical term that means the greatest freedom for the greatest number of independent possibilities....'

    If that is 'disorder'. Then what is 'order' - lack of freedom?"

    5) 'order' is exactly a reduction in freedom, this is why NWO will be one of greatly reduced freedom. 'freedom' means a reduction in the number of possibilities available. This scientific truth is in the Bible in Revelation.

    6) Let's go deeper into #5, and I have often stated that 'insurance' is guaranteed failure. You see people want sureness against random outcomes. But random outcomes are precise the maximization of freedom (disorder). You see fundamentally humans are uncomfortable with adapting to change and to embracing all of the possible outcomes of the universe. Instead they want to force the universe to not change, but of course they can not force this and they can not stop the universe's march towards maximum possibilities (maximum disorder, i.e. maximum freedom). This scientific truth is in the Bible where it says "never be surety for another person".

    7) 'chaos' is synonymous with 'disorder', in fact one definition of it coincides with my theory of everything, which is that infinity (or the edge of the universe) is maximum disorder. The problem is that people misassociate 'chaos' with negative outcomes, because people love order (no change) versus disorder (random change). Because people love to put themselves in jails of order, instead of embrace the glory of the continual unknown. And this is why TPTB are aligned with the trend. Because it is a scientific fact that humans will chose order over disorder, and thus the guaranteed failure of the world in a NWO. But the Bible does say that a few people will understand, they will refuse the order and choose to be free instead. It all fits with the science and the theory of everything. In fact, infinite as maximum disorder is the only theory that can explain the singularity of the black hole as I pointed out:


  54. Correction: I meant 'order' or opposite of 'freedom' is the reduction in # of possibilities available.


  55. 8) Ray wrote:
    "Shelby wrote:
    ...'Ray, you write about the numerous variables that can affect pricing. This is the free market at work......'

    Who said it wasn't. Read the context to which I made that comment"

    9) Ray if you understand that freedom means maximizing disorder (i.e. the absence of centralized control or limitation of possibilities), then you will understand that freedom is a trend which over a long enough duration is independent of the variables of the free market. You were arguing in this blog that China's central planning is superior and that they are holding back on their potential (the slow Ferrari analogy). I am arguing that by interfering with the free market, they are sowing their own demise.


  56. Shelby,
    You write: 5) 'order' is exactly a reduction in freedom, this is why NWO will be one of greatly reduced freedom. 'freedom' means a reduction in the number of possibilities available.

    Here again you show your lack of understanding from a confused mind. You mind struggles with TMI.

    When we attempt to interpret an objective, we have to make clear from what, or whose, perspective.

    The New World Order gives the 'organisers' greater freedom, by subjecting (curtailing) ours.

    Like many words, order can mean different things to different people - one man's terrorist is another man's freedom fighter.

    Who is the 'terrorist' the one who establishes his order by taking it from others. Or the one who fights to maintain his order by resisting?

  57. Sorry Shelby but I have to leave you here, otherwise you may have me ending up as confused as you are.

    I think we have 'entertained' others without payment long enough. Oh, and it's a beautful day today in London
    Take care

  58. When is this mythic crash coming then?

    After listening to deflationists I have not only missed out on a rally I have also lost a LOT of my savings because I shorted. Prechter says dow 600. Those people are INSANE.

  59. 9) Ray wrote:
    "The New World Order gives the 'organisers' greater freedom, by subjecting (curtailing) ours."

    "Like many words, order can mean different things to different people"

    10) Mathematically wrong! The equation for entropy is independent of the observer (the observer is one of the elements of matter considered by the equation). That error demonstrates how ignorant you are of law of entropy (as are some of TPTB, the inner core realize their fate is doomed if they continue, but they choose to continue for the interim gains, to protect their birthright, because it is their culture trained since birth, and because if they did not, someone else would).

    The controller loses just as much freedom as the controlled. This is a very important wisdom repeated throughout the Bible. And now I am going to explain it to in scientific terms. Pay attention.

    First example of a facet of what I will next explain more generally below. What happens to the Ebola virus when it gains complete victory over it's host? The Ebola virus dies too, because it hasn't had enough time to spread to a new host. And even if it did give itself sufficient time to spread to a new host, if it was successful in spreading to all hosts, then it would kill itself.

    Fact is that when you control any matter, it also impacts (and thus controls) you. This is a fundamental finding of the equation of entropy. Do you need for me to discuss the equations?

    For example, aggregating great wealth, reduces your freedom. You are no longer able to spend your days following any whim, because you have to manage and protect your wealth. If you stop paying attention to your wealth, it "grows wings and flys away" in time (quotation from the Bible). All the people with wealth who have their money "safely" stored in bonds, precious metal "accounts", with Bernie Madoff, etc.. are all losing their wealth in time.

    The Bible also agrees with this scientific fact, and explains (in Revelation) that TPTB will be holed up on a hill near Israel with all their gold at the end, and they will be destroyed by the nations who will rebel against their NWO and their gold supremacy.

    11) Ray wrote:
    "Who is the 'terrorist' the one who establishes his order by taking it from others. Or the one who fights to maintain his order by resisting?"

    (...continued in next post...)

  60. (...continued from prior post...)

    12) #11 is a very interesting and intellectual statement, but it is mathematically wrong. Relativity does not apply to order, because order is dimensionless. In it's purest consideration, disorder only counts the # of possibilities. If a centralizing force takes away more possibilities for multitudes then he/she adds to his own perspective, the total disorder is declining and the total order in increasing. And the universe will not let that trend continue for too long. In fact, such a counter-trend must grow exponentially, for as soon as it stops growing exponentially, it implodes. In short, it is an exponential mis-allocation trend.

    This is what Revelation explains. And now I have tied it into human nature and explained the science and math.

    Now in the short-term (and given the globe is such a big mass, this could mean decades, maybe even centuries more, but I doubt centuries because exponentially changing is accelerating), TPTB and the NWO trend can continue before it finally implodes. And when it does implode, it is going to be essentially a total wipeout of humanity. This is why TPTB that can not succeed, they will destroy their Host. It is mathematically certain. The only randomness is who and what will escape their control in the interim time before final peak of NWO and implosion (and I am not referring to the peak of the dollar system, as that is not NWO yet).

    13) The reason I have scolded you, is because you posted in these blogs with a condescending and elitist attitude. If you are going to talk down to people, then at least make sure you are correct first.

    14) Ray wrote:
    "I think we have 'entertained' others without payment long enough."

    We have paid way too much with our valuable time, in order to inform others.


  61. Anonymous wrote:
    "When is this mythic crash coming then?"

    Just when you go long and decide it is not coming, that is about when it will come.

    The point is stop trying to make short-term bets. Understand entropy and make long-term bets based on what MUST HAPPEN eventually.

    What must happen is that gold must go to the moon. What happens to other assets and speculations may make you jealous at times and other times make you feel very smug. But in the end, I can say for sure that any one who buys gold for the long-term, is going to be the winner.


  62. However there is a very big caveat about gold. Given there is only 1 ounce of gold per person in the world, and given most of this gold is already held by TPTB, then it is basically going to be most of society + TPTB against those private people who own gold. This is why the Bible says we will throw our gold into the streets. It will become too dangerous to use it for anything. I am not sure if that comes in this cycle or if that is something for a worse time some decades from now. I do not have enough data yet to know that timing.

    What I plan to do, is to spend my gold and re-distribute it back out into society. This is a great increase in disorder (many more people deciding what to do with that gold, than just me).

    I am not saving up gold for my offspring or for afterlife. I am saving it up, in order to go to war against TPTB, by spending my gold back into society, precisely when they drive society into a massive poverty with a very high gold price. I hope to do my part, to turn society away from "lets help steal the gold for the govt and taxes" and towards "lets invest and work hard and create more possibilities".


  63. Ray,

    I finally figured out your psychology. The reason you were constantly talking down (whining) about the masses, is you feel the control of TPTB is inevitable and I think deep inside you do not feel good about this. This discomfort is coming out subconsciously as condescending tone. You've placed your false hope with the Chinese being able to do some great things and the order to come from that being good.

    As Jesus said, "I came not to bring peace, but with a sword", I have an inspirational message for you!

    I come here with a sword! I am giving you the equation you need to understand that we are not doomed. It is a matter of individual choice. If you choose to join the aims of TPTB, you will have taken the 666 mark and you will be doomed. But there is another choice. Choose freedom. Keep fighting for more diversity, for more possibilities.

    I am not fighting with words, but with actions. I have already identitied a major weakness in Facebook that the can not fix (for valuation reasons):

    And I am planning to take on the top social networking sites within about a month. I already have a clever domain name, and it will apparent to you in a few months.

    I was the creator of, a product for making webpages, that had million users (on free hosting at GeoCities Yahoo) back in 2000/2001, before friendster (the first social network) was even created!

    I will be doing action. I have a plan to defeat TPTB's plans with ACTA, which throw a major monkey wrench in their plans to control the internet. My plan is to basically turn the entire internet into Peer-to-Peer, then TPTB and nations will lose all control over it. Massive disorder coming.

    The fight has just begun, and you are already throwing in the surrender towel.

    Come on! Grow a penis! Learn to fight for freedom!


  64. Ray, which action is creating greater order (and less disorder), foot lightly on the Ferrari or TPTB manipulating the global interest rates by selling 100 times more paper gold & silver than physical?

    This is why it is much more possible for the slow Ferrari to happen indefinitely, and much less possible for NWO to be sustainable. Then again, the implosion of the NWO may not happen in our lifetime.

    But what are you living for? For the comfort of your time here? So you will align yourself with the trend towards more order, but then at what psychological cost?

    Do not be jealous that my mind is free. Stop using your psychological BS control categories on me. I have chosen less order and more freedom. This time here on earth is nothing but a blip of time.

    Being part Cherokee native American, I relish the opportunity to die fighting, versus live my life in a jail of order and control. And this includes the freedom of my mind.


  65. Ray,

    I remember you wrote earlier that you are a psychiatrist. It is a corrupt profession, designed to work with TPTB to control people. You may have been so indoctrinated, that you may not even realize it or even be in control of your own mind any more:

    TPTB believe that abuse is normal:

  66. When the globalists such as Rockefeller said "The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the national auto-determination practiced in past centuries":

    What they mean is that they want to decrease the diversity of social order, i.e. increase social order and decrease diversity.

    They claim certain benefits, such as the ability for large corporations to operate a higher economies-of-scale.

    But what happens in nature when diversity is decreased? For example, what happens when you make your siblings or cousins pregnant? Birth defects and failure.

    In fact, the elite are very inbred. And their ethics is hopelessly twisted. For example, David Rockefeller apparently sees himself as a "kind" person, and while he is giving a little bit, he sucking the life blood out of you:

    "I do not owe any personal income tax. But nevertheless, I send a small check, now and then, to the Internal Revenue Service out of the kindness of my heart."

    "I do not like to be unkind."

    "My grandfather, along with Carnegie, was a pioneer in philanthropy, which my father then practiced on a very large scale."

    "Only once in my life was I on the edge of incivility."

    "Populists and isolationists ignore the tangible benefits that have resulted from our active international role during the past half-century. Not only was the very real threat posed by Soviet Communism overcome..."

    1974. In his book, Wall Street and the Bolshevik Revolution, Anthony Sutton "documented the fact that Rockefeller and Morgan banks provided the Bolsheviks with loans, while American industry provided them with the plants and the technology thy needed.


    The globalists see themselves as doing a better job of managing the world, but in fact they create problems, that they then claim to fix.

    Why is it today that people are not free to move from country to country? It is because of crap the Rockefellers and their ilk have done. Back in the 1800s, people were free to go to any country they wanted to. There was no concept of citizenship or border patrol.

    Mostly what you find coming from the mouth of all these elitists is pure BS!


  67. Shelby,
    You are obviously sincere (At least that is what comes across) in your beliefs. Unfortunately sincerity in one's beliefs does not necessarily means those beliefs are right.

    But I cannot honestly judge other's beliefs, only my own.

    You say: "...I will be doing action. I have a plan to defeat TPTB's plans with ACTA, which throw a major monkey wrench in their plans to control the internet.

    My plan is to basically turn the entire internet into Peer-to-Peer, then TPTB and nations will lose all control over it. Massive disorder coming...."

    Then I will pray for you mon ami, and wish you well.

    For me, the one bible story that sticks in my mind is about what happened to the first man that tried to end their practices by turning the tables on them. (He was executed as a 'terrorist' (no that was not a label then, so was not used) a mere two weeks after)

    And I also remember who He claimed His father was, and how He 'forsook' Him at the end.

    No one has succeeded in the 2000 years since, though many have tried.

    Maybe you will be more fortunate. If not may you rest in eternal peace.

    I assure you of my moral support (Unless some men in black trench coats and dark shades, knock on my door and ask me to sign anything to that effect. Then, before even the first cock crow has ended, I will deny thee.

    (No one can accuse me of not being honest)

    There may be an after life, but I do not want a life built on promissory notes. So far, I am happy with my lot, and I thank all who had a hand in providing my opportunity of life.

    I will hold on to it, until the bitter end, come what may.

    Once again, mon ami - BON CHANCE!

  68. A THOUGHT FOR TODAY (and every day that follows)

    "The problems that exist in the world today cannot be solved by the level of thinking that created them."
    - Albert Einstein (1879-1955)

    Yet, at every opportunity, we expect. and elect, those who cause them, to rectify them.
    - Ray Newton

  69. Derek says (Along with a few other analysts I have read)

    "....Things are lining up for a major market top within the next few months and the coming downturn should put a more realistic perspective on a lot of things that everyone is "hoping" have somehow worked themselves out.

    He could very well be right. If he is, then eventually, that downturn will eventually begin to show.

    There are three options open to us, and one of them is 'options' (puts). There are short ones, and leaps (very long ones.

    On the latter, you just sit back and let it play itself out until you feel it has gone far enough, then cash in your chips.

    Then there is 'to short' (borrow the stock, sell it, and buy back when you have hit a lower price that you feel
    is sufficient reward.

    Or you can get out, if you are in, and stay out if you are not.

    So where is the problem?

    The problem is in identifying the pivotal point of change, by giving any change time to establish itself, then jumping aboard at a point in the 'over bought' over sold indicator when it is clearly showing 'overbought' ( if the trend is down).

    If you are in the trend, you should gain eventually even if you have mistimed your jumping on point.

    Have fun - up or down, and even a 'side winder', there is money to be made. And with interest rates so low keeping it in the bank pays nothing.

  70. Ray, thank you very much for that kind message. I am humbled by your graciousness, and I hope you understand that what you witnessed here was just my fighting spirit and it is not negativity towards you deep in my heart.

    I agree with you that if I were to try to accomplish anything significant against the current TPTB (and society's desire for more order) tren, that depended on me, I will be executed. However, my plan is to simply supply the natural demand for a P2P internet structure. Once this structure is put in place, then by definition (of "peer to peer"), then it won't depend on me. It will have a life of its own and can not be controlled by law or by any central action. By definition, P2P means the billions of computers out there will talking to each other, without relying on some central server and they will be doing so with patterns that look indistinquishable (in terms of what society will allow to be blocked) from computers that are talking to centralized servers. There are simply too many speed and free downloading benefits that come from P2P and this is why the govt (and music companies) have been unable to stop it. Once something finally perfects it (Wikipedia "MUTE file sharing") and gets the structure into the browsers, then ACTA will be a useless treaty. Any way, it doesn't depend just on me, I am confident others are working on similar things.

    BTW, I launched my new social network site last night. But I don't want to reveal the name here. It starts with "Asia" and has a spanish word in the rest of the name. You will recognize it later if I am successful.,0,3213754,full.story

    [quote]In China, real estate fever is rising

    The country is treading dangerously close to a full-blown property bubble, economists say, and the industrial outpost of Hefei represents China’s embrace of housing to fuel economic growth...

    ...China's real estate rush, once confined to a handful of leading cities, has spilled into the hinterlands with a ferocity reminiscent of American expansion into exurbs...

    ..."Prices in second- and third-tier cities are increasing more dramatically than in the first tier. It's very dangerous, and it puts local banks at risk."...

    ...The average annual income here is $2,000. The local economy centers on home-appliance manufacturing. There are few tourists...

    ...Huang Qingyuan, a sales agent for one of Hefei's most expensive housing estates — they go for about $120,000 per apartment.

    While pricey by local standards, that's still a fraction of what homes cost in the capital. That's why buyers continue to pour in from across the region, accumulating apartments as a hedge against inflation in a nation where there are few investment alternatives. More residential units were sold here the first three months of 2010 than in Beijing or Shanghai — cities four times the size of Hefei...[/quote]


  71. I think this cycle can not move entirely to one world govt, because there are still too many people living in farms. These people are not accustomed to following rules and they have not been raised on Television. However, this is rapidly changing. The priority has been to put electricity and TV on every mountain top in developing countries.

    So I do think there is a chance that technology could swing us away from the NWO trend for a while, before more of humanity adopts the western culture (praying to insurance and govt and perfection and accumulating material things and not being friendly to your neighbor "privacy and your own space being important").

    I think it is very important what kind of media these developing youth will consume. That is why my focus is here in Asia.

    The upside that Ray sees in China in terms of the qualities of the people (the way americans used to be in 1800s), is what I want to nurture, but I disagree this is some power of the govts (e.g. China), but rather it is the power of the people who are still relatively free of imposing order on themselves, as compared to the westerners who are already dead (in Biblical terms, they already whorEshipped insurance, govt, protections, social safety nets, etc).

    In Philippines, I pay only $2 to see a doctor, because there is no medical insurance here to drive up the prices. I explained in prior post above, why insurance is guaranteed failure. Jason Hommel at and does a lot of writing about the evil of futures contracts (aka 'insurance').


  72. TPTB have already failed on numerous initiatives recently:

    * Global warming is a scam as proven by climate-gate hackers

    * H1N1 scam failed, Poland even refused the vaccine

    * NAU target date keeps getting pushed back

    * Rise of alternative information on internet

    * Most people realize 9/11 was a false-flag scam

    * Major resistance to socialized health care in USA.


  73. I think the next really big crash is not until 2011 at the earliest. We have to first see all the effects of inflation and rising long-rates from all the stimulost pumped into the system in 2008 and 2009. This will take more than months to play out.

    We may get a -10 to -15% haircut/correction sometime this year, before pushing much higher.

    And when that next huge crash comes, you want to cash out your short positions soon enough, because I think that could be the one where the capital controls are put in to place, and you will no longer control the money you have in the paper markets.


  74. The -10% correction may have already occurred.

    Also due to exponential function and the logarithm in the equation for entropy, then everything is accelerating in time, thus it is plausible the next big crash comes sooner than the 6 years (2001-2007) for the prior reflation.


  75. Derek,

    Important data for you:

    "COMMODITY ONLINE in a recent online poll of a sample size of 21,600 respondents selected from across the globe, found that 93% or 20,100 of the total sample size had indicated that there would be a fall in the gold price due to the recent upbeat mood in the global equity markets, while only 1,400 respondents contradicted the stand, and 105 did not comment on either side. This showed that most of the respondents believed that there would be a fall in gold prices in the near future due to a recovery in global equity markets.

    This is good news! Contrarians love it when 93% of traders take a position that they can trade against!

    Meanwhile Elliott Wave (EW) enthusiasts continue to stubbornly insist that the gold price is headed lower. The people who follow these advisors are losing out on the greatest gold bull market in history. After all if you don't buy gold or silver while it is cheap, when will you buy?"


  76. Very insightful and agrees with my logic:


  77. Some charts that gold did not dip when Japan's Nikki went into it's severe double-dip:

  78. Shelby and I do not agree on China. However there is one thing we do agree on on.

    I support his (quote)

    "...Meanwhile Elliott Wave (EW) enthusiasts continue to stubbornly insist that the gold price is headed lower. The people who follow these advisors are losing out on the greatest gold bull market in history. After all if you don't buy gold or silver while it is cheap, when will you buy?...."

    But my reasoning is based on different inluencing factors.

    I detail them in the following post

  79. I make no apologies for going on about China, especially in relation to the gold market. So, those of you who do not see the significance, scream at me all you like. I write to make it sink in to myself as much as anyone else.

    China did not suddenly out of the blue become the world's largest gold producer by chance - they worked hard at it.. There is good reasoning behind it, as there is always behind what they do.

    I am pleased that more others - professional analysts, are now beginning to see what I have done for some time. I quote from one below who's full commentary is at Kitco.

    ".....The gold picture in China has turned powerfully positive for the Gold price, in the view of Rickards. China needs about 4000 tonnes of gold for a proper reserves ratio, but only has 1000 tonnes today in possession. China cannot fulfil this goal even by taking all of its domestic production for the next 10 years.

    They wish to take the IMF gold from pledges, but political resistance is clear. They wish not to push up the Gold price from open market accumulation in gigantic volumes. He overlooks that official Chinese gold ownership extends far beyond the Peoples Bank of China and Sovereign Wealth Funds.

    My sources tell of the Chinese owning 3x to 5x more gold than 'Officially' proclaimed, something either overlooked or ignored by Rickards.

    The Chinese people are showing a strong preference to hold gold personally, not as part of lunatic funds managed and corrupted by fund managers as in the West. Their public purchase investment is mammoth, a major element of global gold demand, outlined in the Hat Trick Letter.

    The Chinese do not favor or manage Exchange Traded Funds, the greatest single device in the last ten years to control, corrupt, and negate the public demand factor. The ETFunds lately are accused of being price control devices.........."

    It is these ETF's a very clever introduction along with the vast derivative market (trillions of dollars) that makes manipulation so easy. It deals in absolute virtual reality.

    We therefore cannot apply economic theories - any of them, or even any Academia inspired rationale to the market to make an even part sound judgement.

    It has to unwind, that is fact. And the process is now being forced but it can't happen overnight, it would collapse the world as we know it - and that is putting it mildly.

    China is forcing the hand but even China knows that the pressure must be applied gently. When we are all in the same boat, no matter what more comfortable seat we may have than an other, if it sinks we are all plunged in the water

    I am not concerned whether actual numbers are correct, even to the nearest million or so. When the numbers are so high that when you quarter them, or even half them they are alarming then they have to be considered in any market prognosis.

    Here is the simple truth. Considerably more gold is being traded, as in 'on the books' than is available to fulfil the obligations already transacted.

    It is akin to someone issuing IOU's. You can issue as many as you like, the only time there is a problem is when people start presenting them.

    Eventually, the supply of scrap gold will dry up. There has been, so far, vast quantities turned in which has helped to hold the gold price.

    The masses, even the ones who still have some spare money have still not caught 'gold fever'. That will come later. But this time it will include all those millions of Chinese and Indian
    masses who are getting richer by the day.

    The man listed by Forbes as the richest man in the UK is Indian born Mittal, Lakshmi

    China does not have 'bubbles', it has 'balloons'.
    There is a huge difference. Balloon inflation can be controlled, and can be let down gently. (As it did, and still doing, to its stockmarket.)

    If you do not see the significance of that - too bad.

  80. A link to the most insightful article I have read in a long time is contained within the comments at the following link:

    Ray, please read the above link and the article that is linked within it.

    China's govt is not acting against the western trend, but rather is working with the banksters.

    China doesn't even have 1/20oz of gold in reserves for each citizen. This no where near the nearly 10 oz per citizen the the USA once had.

    The fact is that the banksters are mopping all the gold. The people and govts have very little per capita. There should be 1 oz per person on earth. Where is it?


  81. Shelby,

    Of course China works with the West, including the banking fraternity. There would be open warfare at some point if it didn't.

    It would also still be labelled a 'Rogue Nation', and have sanctions against it because it would never have been allowed to get as economically strong as it has, so could not hold its own..

    You need to read what I write with a little more understanding as I make these points very clear.

    I do not want to get into 'nationalism' and politics here, unless some comment is necessary to bring the relationship of my point to the markets.

    When some 'emissary' from the US 'establishment' (note I do not say 'government') goes to 'ask' (pressure) China to take some particular course of action - Yuan revaluation whatever, the Chinese smile
    and give some form of indication of possible agreement. Then go about things there own sweet way, and in there own sweet time.

    The 'emissary' goes back feeling he/she
    has won. So everyone is happy.

    Confrontation is not the Chinese way. It has nothing to do with Government dictate, it is inbred into them, they know no other way. But if you push physically, they will push back. In other words, they are not 'pushovers'.

    How much gold there is for each person
    in the world is not really important from an economics point of view. Gold is not something an individual has to have, particularly since it does not back any nations currency.

    So today it does not even have to be enough to equal the amount of fiat (people's money) there is in the world, never mind people.

    However, what is important is that there has to be enough, and that applies to anything, to meet what has been bought and paid, or contracted for, either in ETF's or futures or however.

    If there isn't then that becomes criminal.

    It is also important for settling deals in 'macro economics' It is the Elite's currency, and the only one they trust.

    When they say 'In God we trust' It is their subtle way of saying 'In Gold we trust'. Because Gold is the Financial Elite's God.

    Are you getting the picture?

  82. Ray,

    First I want you to understand more deeply why I say the profit (or value) is not in manufacturing but in the intricate level of design that the Chinese can not do. I have seen the Chinese cell phones (e.g. "Cherry" here in Philippines) and there is no way they are close to mastering this critical point that makes the iPod the most profitable cell phone ever:

    China as a nation are no where near the level of the upper 0.01% of designers in the world. The global best and brightest go to a few select companies in the world (e.g. Apple, Google, etc), irregardless of national borders.

    And you are missing the point about gold. As gold is no longer being used as a currency, when the people have less and less per capita, this enables the elite to hide their monetary inflation theft (aka "mis-allocation" of the economy).

    China is symbiotic with this theft. Thus China is helping to drive the world towards this theft system called "NWO". Of course, the poorest in China can see some individual gains, but I am talking about the aggregate result of increasing socialism/centralization which is enabled/symbiotic with a reduction in gold per capita held by the masses globally. As the gold is brought into centralized holdings (even held by the govt), the entropy is declining and we are moving ever close to the 7 tribulations which is the horrible rise and then finally failure of the NWO (the elite will kill the host and die with it).


  83. I meant "7 year tribulations". That will be the peaking period of the NWO and the last hurrah of the elite.

    The reason that iPod 60 fps is so important is, can you tolerate a cell phone that pauses for 3 seconds between some button presses?!

    People don't understand the intricate design that goes into making something that works well, versus some piece of crap from China.


  84. In short, China is just a pawn of the banksters, and the elite in China are selling their own people into slavery for their own personal gains as elite always do.

    Your notion that the Chinese elite are somehow positioning to the advantage of their people is entirely wrong. Elite are elite every where. Human nature is human nature every where (cultural differences do not alter this).


  85. I say, you have very much to learn. And I say this not out of cynicism.

    I do not go into things too deeply for good reason. What you lack is what so many 'mathematicians' and scientists lack is imagination. The few who have it are truly exceptional.

    The man who built the first computer could not envision its eventual uses.
    The ones who saw its uses and wider applications probably knew nothing about computer technology.

    The ones who built the first plane could not envision it would become a most deadly weapon of war. The one who first did probably knew nothing about aero dynamics. And was probably a poor mathematician.

    And when the plane was first used in war it was only seen as a tool for observation.

    You lack the imagination to see beyond
    a few old meaningless yardsticks picked up from others with lack of imagination.

    Japan was thought by Americans, even one's who were occupying that nation at the war's end, never to be able to build a car industry to knock many US manufacturer's out of business.

    At the end of the war, the British rebuilt the German VW factory. In return, the Germans offered the VW and factory to the British. The British Government turned it down because we did not believe it had a future.

    The Swiss never believed the Japanese could make a watch as good as a Rolex.
    And no one thought the Japanese could build a camera that would rival the best.

    Boeing was knocked back at the speed with which the Chinese adapted to build their aircraft - oh yes, they have a factory in China and have had a relationship with China for 35 years.

    A few years ago, would South Africa, or big Mining Investors ever have thought China would have a gold mining industry greater that would lead the world.

    You need that rare quality IMAGINATION to see outside the box, and look into potential and future. What little you have is locked into a very narrow focus connected to physics.

    However, a true scientist could not accept any particular religious dogma, verbatim, as you do. Though I agree, a scientist does not have to be an atheist.

    China is going to rock you off your feet, but you will be far from alone.

    China never claims that it is out for world domination. Unlike the US, or Britain, and some other nations in the past, that has never been her ambition.

    In fact, something you keep ignoring is the fact that its slogan unlike the US because it doesn't want to surrender 'Top Dog' status, is 'ONE WORLD, ONE DREAM ' .

    And in that world it sees itself as a part of the whole, where the whole is greater than the sum of its parts and there will be no need for wasteful wars between nations.

    As I have said, I am not Chinese. But, if I am going to to treat specualtion as a business, I have to face reality and see things as they are, and as they
    are trending.

  86. Ray indeed I agree that China will play a very big role in the NWO of great socialism "ONE WORLD, ONE DREAM". That is my point, they are a key force that is driving the globe that direction. I explained how they are doing it, by enslaving their own people, and then exporting this slavery in the form of very low prices, by trapping their citizens' savings inside the country. This has driven global interest rates low, because instead of their own citizens being to be a billion beacons of light investing diversely outside their country, what we have is the Chinese institution investing the money in US treasury bonds (driving interest rates lower).

    The whole world is being told that the opportunity cost is much lower, because the capital is being focused on those bonds, versus the private sector seeking the maximum returns.

    So I agree it will not be a total wipeout for China (their influence will grow, as rightly so as their population is 1/6 of the is just simple mathematics).

    But China is exporting their past mistakes. They are exporting their decades of socialism which impoverished their people.

    It is up to the west to reject that export, but the west can not, because the people no longer use gold as currency.

    So the failure will be shared worldwide. And this is very dangerous to private gold owners, as the world will look to tax your gains (not in ounces of gain, but in an arbitrary theft of fiat value of your gold).


  87. That is BS about China not being aggressive. They are passive aggressive (similar to quotes I gave above from David Rockefeller). China is stealing stealing from world, as they claim to be virtuous or in harmony. They are shrinking the pie, while taking a bigger slice of the pie. It is not a fruitful direction for the world. And quality will decline as a whole, even while China's quality will come up. What I mean is they their centralized control will kill new innovation, while they get better at copying past innovation. Their censorship of the internet is proof enough. They will not stop until the rest of the world has enacted the ACTA treaty and is censored as well.

    As previously stated, I am hoping for (and working towards) a technological solution that makes enforcing ACTA not feasible.


  88. The Financial Elite drive this world, not any nation. All economies are totally dependent on the International Banking Brotherhood. PERIOD! No ifs and buts.

    They have claimed they can make, or break, any nation. And they are right. They have done it, time and again.

    If they wanted they could make Zimbabwe
    as rock solid economically as Switzerland, and Switzerland as big a basket case as Zimbabwe if that fit in their plans.

    I am quite sure every political leader in the world knows that even if their people don't.

    Every national leader the world over knows, even though some may appear to defy them. Many times this rhetoric is for their own people, and it also covers up the reality and helps to confound the raised internet voices of the 'netizens', who more and more are becoming aware that all is not as it appears.

    Use your imagination.

    Observe how you can get even in a nation's military where they are all on the same side, you get what appears infighting between the different services.

    Even within one service you get the egos of the various commanders, and even among the lower ranks. You have this in the US forces, even in time of war..

    Each nation has embedded within it somewhere, if only in 'advisory' positions key elements that belong to the International Banking Fraternity. They adjust to whatever political system operates. Or, in our so called 'democracies' which ever political party they want elected, will be elected.

    Obama know whose the boss. Kennedy did, but he had a lapse of memory and paid the price.

    The Chinese leaders know, Russia knows,Germany knows, even North Korea knows, and Iran. THEY ALL KNOW.

    The Taliban know, they just don't accept. But then there are two Talibans one we have created do things to discredit the 'Fundamentals' who are revisiting fiercely.

    Don't try to figure it all out. I don't need to know all about Earthquakes, and Hurricanes etc., to be able to live my life happily.

    I know they exist, and I also know they can now be triggered by man, as well as nature.

    What I am concerned with how all this plays out on the markets, especially in the GOLD MARKET.

    And China there is a big player and will remain so for a long time and gaining more power as the months roll by.

  89. 'revisiting' fiercely.

    That should read 'resisting' don't know what happened there.

  90. "R.N said...
    So you also pay homage to Fabor who believes bringing an action against Goldman Sachs is not because they have been found involved in fraud, but it is all down to an act of anti-Semitism'..."

    Ray, I'm sorry, but you have now lost some credibility with me. I know what Faber actually said, and it was not as you wrote. He said there was an anti-Semitic element to it -- that's all. Perhaps you are grasping at anything to make an argument, but you need to be more careful.

  91. check this out from the Goldman Sachs Yahoo MB.

    All 5 Members of the Federal Reserve Board are Jewish. And 9 of 12 of the regional reserve banks are run by jews? interesting.

  92. The importance of the point I was making was in the fact that he even mentioned anti-Semitism.

    It is all semantics. To even infer the possibility/probability of anti-Semitism could possibly be involved achieved his objective in making it - SMEAR and shift focus. Especially when it had followed the remark earlier inferring it was political.

    Anti- Semitism is always far more political than religious by those who indulge in it. That is why anti-Zionism and Israel is more widly used.

    I have never met anyone who says they do not like Judaism. I have many Jewish friends some of whom are anti Israel, and anti-Zionist, even between mother and daughter in the same family. Most American Jews are Reform Jews, and many Jews are not religious.

    My father's mother was Jewish, and I never met her, but my mother is not. And I do not follow any of the religions.

    So, if you want to hold that against me and think it affects my credibility, so be it

  93. Yes. that was the humorous and ironic part, the fact that the SEC are mostly if not all Jewish. I was going to mention it at the time, but thought I would let it go. Otherwise these sort of comments can lead things away from the main thread of the discussion

  94. The person who wrote what is linked to above thinks that Timothy Geithner is Jewish. He is not. I also doubt that James Bullard is Jewish. What is this penchant some have for implying Jews are conspiring against everyone? It seems we are in the stupid cycle again which goes with economic downturns.

  95. RN,
    I think you are a good debater, but I see a large degree of sophistry in your arguments and, humbly, you would be better served purging yourself of any trace of it.


  97. E D

    Thank you for your response. However I could hardly meet both your comments as they would oppose each other, surely.

    I mean a 'good' debater would not use sophisms, especially to 'a large degree' as you describe

    Could you please cite me one example of the many sophisms of which I am accused as perhaps you have a different meaning of the word of which I am unaware.

    I will be pleased, or should I say humbled, to apologise if it is obvious I have erred deliberately, or inadvertently.

  98. Anonymous: The one with the foul mouthed illiterate attempt at the English language stop your fascist, racial slurs and making decisions for others.
    You are an embarrassment to other Americans assuming you are a fellow countryman.
    Go crawl back in the slime pond where you obviously crawled out of, and will be more at home.

  99. Well said G D


  100. Ray, your latest posts are very lucid and I agree with them.

    Let's not forget the Gambler's Fallacy:

    What you need to know about gold is that the standard deviation of mean of private holdings per individual (i.e. the aspect ratio of the Bell Curve) is accelerating exponentially upwards, as the mean is accelerating exponentially downwards.

    Thus although gold will rise immensely in value, it will become increasingly dangerous for the private investor to hold. I explained that the elite have synergized (even help cause and direct) the failure of the nations and the gold-less masses will be suck the tit of "increase tax collection" to fund their "survival" (further failure!). I expect gold to be taxed at its ever inflating fiat value, thus private gold investors can expect to lose 90+% of their ounces to society.

    This is predicted in the Bible where it says we will throw our gold into the streets.

    P.S. I am trying to do something about this.

    P.S.S. Ray TPTB have power to destroy a nation arbitrarily, but they dare not use it, as if it is not in harmony with the mass trends, they will lose power due to the "Butterfly Effect"s. Wikipedia it. Their power is actually a jail. They are simply feeding (fullfilling the demand) the evil that society has. I enumerated those evils in prior post, i.e. the demand for more order and govt and insurance and debt. Buddhism explains this as the evil of "craving".


  101. For me, politics is less relevant than picking my nose. I have 0 interest, as it impacts nothing in long-term.

    What matters is what people are doing economically. That determines the politics.

    TPTB merely serve the economic desires of the masses. They also try to influence and direct these desires. That is why they are big into mass media.


  102. "..What matters is what people are doing economically. That determines the politics....."

    IT DOES???

  103. This is way more than a Depression, we have BEEN in a full blown Depression, and most people are not savvy enough to have noticed.

    Too many listen to the Talking not do their own homework.

    IMHO, and from a Biblical perspective, and the Politics being played before our eyes, and the failing of basically every nation on earth's systems of Gv't, I can see( as the IMF is already talking up a global Banking system, and a MUST devaluation of Western cuurencies).

    We are already very close to the point of IF you own Gold & PM's, WHAT do you do with it?.

    Whose paper currency, even if more stable than ours, and the rest of the Western world.........would YOU play your cards?.

    If the collapse that is happening as we type plays out( I see no way to stop it), then the Gv't in whatever form will SEIZE your PM's..maybe pay a pittance, and the TBTF's, and the new Globalist system will revalue it/them, to prices unheard /dreamt of.( like FDR, except on a MASSIVE SCALE).

    OF course when they have snagged all they can find/steal.

    The brevity of the world situation, COULD make way for the ONE that comes as the angel of light, has all the answers..........with signs and wonders.

    As prophesied in scriptures,,,,,,,,,the ANTICHRIST.

    The conditions we are in, are basically totally out of mans control at this point.

    And, the timing, and events are more aligned than any time in the History of man.

    WAR is inevitable, I suggest having items for pure survival, and barter goods........

    Like me, many of you live in large ,or close to huge urban areas,make sure you have the ability to last, and the ability to defend yourselves and families.

    I personally pray I am wrong, but the SIGNS are everywhere.............

    At the very least any MAJOR transformation of any FREE nation, has always ended very badly, and fiat currencies, we all know that story.

  104. Derek big changes, metals could explode or implode, can you weigh in quickly with your thoughts? Interesting that Gold and Silver went in opposite directions today. Could this GS testimony be the catalyst that gets us a correction in stocks or will it just be a small ripple in the continued melt upwards?


  106. New name for this site! LAVATORIA!
    I think the name explains itself. It would take
    a ' Derrick' to clean this site up!

  107. Derek,

    I remember reading your blog a couple of months ago when you were predicting with confidence that gold would be trading in the 600.00 dollar range. I wrote to you then that your logic was flawed and what would it take for you to admit you were wrong. My friend, we will see $2000.oo per ounce gold. Your $600.00 prediction was DEAD WRONG!! Come on Derek, you blew it BIG Time just as I warned you. Start looking a macro trends instead of "technical short term charts", In the long you will be far more sucessful. No hard feelings but please take your licks.

  108. Ray and Shelby are the same person! Yes, in fact Derrick is another pseudonym for the same-three- in-one knuckle headed advice and drivel they continually post. OMG. Ray and Shelby need to get a room...

  109. Every time an ounce of gold is bought in the markets, one is sold, well at least. that is was the foolish naively believe

    Therefore, they can't understand why the price does not react to the dictates of the state of the economy, in the way it should react if what they had been told was the state of the economy were true.

    The paradox is. if they really knew the truth, it is considerably worse.

    This sad condition is brought about by
    them never really understanding the meaning of one simple, funamental. word - 'Drivative', and that it is pronounced 'deceit'.

  110. Yes, I know, and the word is also spelled 'Derivative'. It was a typo.


    Gary Dorsch wrote:
    "For European banks, Greece is too-big to fail, but it remains to be seen whether the Greek populace would choose to live under the yoke of EU-IMF austerity for the next several years. In the event of the un-thinkable, a Greek exit from the Euro, or debt restructuring, a Lehman style shake-out would ensue, rocking global markets. The odds of that happening are higher than most believe, about a 50-50% chance."


  112. Ray replied:
    "Shelby wrote:
    'What matters is what people are doing economically. That determines the politics...'"

    IT DOES???"

    Of course. Very simple. If the people were all buying *PHYSICAL* gold and silver right now, then it would be impossible to sell any CDS derivatives. If the banksters (elite or TPTB) can not sell fractional reserve paper gold certificates, they are powerless.

    Thus the Chinese communist party would also be powerless.

    Instead only 1 out of every million people in the world are buying more than there 1oz per capita (total above ground supply per capital). Thus politics and derivatives are running amok and are in the back pocket of the banksters.

    Slam dunk.


  113. Be assured, Greece will NOT leave the EU. It is not even a considered option by Greece or the EU (management)

    The EU will not disintegrate, and China will not implode, or crash, whatever. The Euro will remain a strong currency. It was never intended for it to stray far from the dollar parity.

    Back to GOLD! The mass have not even dipped their two in the gold market yet, not here, not anywhere - East or West

    When they do, it will send the mines shooting up, especially the juniors.

    The mining market is so small. Most mines are too small to permit institutions to get involved even in a, for them, small way.

    Go to Big Charts and observe the market volumes today as opposed to the 80's. And that is all segments. There is no comparison.

    In the mining sector there are even less mines today. But there is one 'hell-uva-lot' more money out there.

    We ain't seen nothing yet. Those who are not in will be left behind - far behind.

    As they say, there are those in our world who spend their time wondering what is going to happen. There are those who wonder what is happening. And there are those who will finish up wondering 'what happened'.

  114. CORRECTION: 'dipped their toe' into the market.

    I broke my glasses, and if I mistype
    a word and I don't spot it. my computer
    decides a word for it.

    Yes, I know there is a cure - STOP POSTING. There, Anon, I said it for you.

  115. Shelby,

    I still stick to my 'IT DOES ???

    Your explanation is so full of holes I would not know where to start.

  116. 'Start looking a macro trends instead of "technical short term charts", In the long you will be far more sucessful. No hard feelings but please take your licks.'

    I agree completely, don't be a tool - look around at what is happening...

  117. Greece is GONE !!! So are the rest of the PIGS! Bye bye europe! and also UK ray!

  118. I wanted to correct my prior post within about 1 min of posting it, but we had a brownout here that lasted entire night here. Here is the correction:

    Shelby wrote:
    "I don't know if it is 1 in every 1,000 or 10,000 or 100,000, but the point is that without at least 1 in 10, we private gold investors stand no political chance against the banksters."

    So indeed the masses are setting the economic outcome. This enables the politics to be what it is.

    If the masses were instead refusing to use fractional reserve "money" (actually fiat is always born as a debt), then of course the politics would be different. The masses fail to understand that voting is done by individual economic choices, not in the voting booth. The voting booth is a mirage.

    TPTB only exist because the masses demand that they exist, by their individual economic actions.

    So enumerate the holes Ray? There are none. That is why you can not.


  119. Ray prays to (idolizes) TPTB too much.

    Also you have mental myopia...

    It makes no difference whether Greece leaves the EU, as the outcome is the same. EU is bankrupt. Even Germany's exports were financed by the overspending of the rest of the world.


  120. Again Ray lacks insight into what is different now as compared to 1980s.

    The juniors have an extreme beta, and the majors provide no more leverage than physical silver.

    The problem with investing in stocks (as compared to 1980s), is that western civilization is bankrupt, and so it is very very likely that there will be a complete disrupt of the paper markets.

    This epoch is not about "making money with speculations" but about preserving capital, and "making money by capturing the growth of developing markets" with real income businesses.


  121. It is very important to understand that the Euro was never money and never will be. It was a promise backed by nothing.

    Of course the Euro won't "fail" because the westerners also won't "fail".

    The word "fail" in this context is similar to the universal health care provided by Weimer Germany as Hilter came to power. The "universal health care" never failed, because the Germans were too perfect to fail. Instead, they just genocided the "weak races" that were "causing the problem in the health care system":

    So the point is that refusal of the society to admit failure, gives the power to TPTB. Society refuses to buy gold and admit failure. They rather give everything to the paper elite instead of admitting and dealing with the reality of failure.

    =====More on Euro======

    "If Europe bails out Greece, it will be a victory for the paper aristocracies of the countries of Europe, and a defeat for the ordinary people. The ECB will have to print money at a faster rate, and this will be bullish for gold."


  122. The point is that TPTB will give us our paper illusions. No we won't "fail"! Paper won't "fail"! Never. Just keep up your illusions Ray.


  123. I am not saying that someone might not get their timing perfect and cash out a "10 bagger" mining investment into physical gold from a mining investment.

    Go re-read my post about "Gambler's Fallacy".

    TPTB will give you your illusions. You create the demand for TPTB with such illusions.


  124. Ray and Shelby,

    It's been an awesome run. It really has. However, since this particular post has well over 100 comments and I'm sure the vast majority of them are the two of yours, I have got to draw the line at the triple-digits of argumentation.

    I will kindly request that you set up some sort of eternal debate section on your own forum that you have going, where this conversation and both your future carpal tunnel treatments can be determined at the behest of your own readership.

    That being said, I appreciate that you both have extremely differing points of view on many topics, and I am not trying to challenge your ability to speak (type) - I'm just asking kindly that you find another space to do it in, one that belongs to one of you. As opposed to the one that belongs to me.

    - - -

    To the readers emailing me about Greece and the future of the EU, I will state my own position clearly:

    Greece is only a symptom of a much greater problem with the EU (one of those problems including that no single government actually backs the currencly - while gold bugs might find this a laughable excuse for a reason, the rest of the paper world sees having a defined "backer" pretty important).

    The European Union will most likely be dissolved within the next 1-2 decades as the more economically healthy countries flee to their own currencies leaving the more sickly countries to fend for themselves. Whether this is also in coincidence with a shift towards gold or commodity backed money, who can say.

    However the odds that some form of money (actual money) emerges by the end of this bear market or shortly after are far higher than in recent times, and one of the more positive possibilities to look forward to.

    Derek Blain.

  125. Derek it is important to understand that by the time the masses realize that they want and need real money, they won't have any.

    And it is more likely than not, they will accept a form of gold, which allows them the illusion of having some.

    And thus I re-iterate gold will be a very socially dangerous asset to hold for a private investor.

    There is very little positive to look forward to (on the aggregate). The masses worldwide are fleeing from reality to big government. China included.

    However, the true libertarian realizes it doesn't matter what the rest of the world does, he can choose his own freedom. Just walk away from the world and its games.

    Also, there will be many business opportunities as the world continues to march towards total government (slavery). Eventually it will become impossible to do business without being tagged and tracked, but one can find people to be the tags for them.


  126. Shelby, what a hollow sad existence of a life you must have to be so pessimistic and in need of attention and constant self praise. It is blatantly obvious that A) you are all alone B) you have no children or wife C) nobody loves you.
    D) you are on a path of self destruction as you preach preservation. Everything is not that bad, please get yourself a life and get off the computer!