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Friday, November 19, 2010

Americans Are Cattle

Ron Paul is one of the few people that Americans have on their side in government.  It's amazing he's still alive.

Here he comments on TSA's ridiculousness and the passive behavior of the citizenry.

If you're an American, you must know that history does not treat the passive well.  The direction things are going is not good.  You should fight it, but you should also have a backup plan in likely event that you are not successful in your fight. 

American is becoming Land of the Fat, Home of the Cattle.

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Thursday, November 18, 2010

Oh Sweet Irony of Democracy

In theory, the United States is a republic.  The purpose of a republic is to avoid being a democracy--which has never survived long--by ensuring that people cannot vote themselves entitlements from self-serving politicians.  However, once people realized they could vote in politicians that would promise bread and circuses, the game was over and democracy won.  Instead of minarchist form of government, the US now has tyranny of democracy.  The video below shows some simple, practical implications of this behavior.

In summary, most Americans want government to clean up their fiscal house--as long as it doesn't affect them personally.  Anyone capable of 2nd grade math can easily see that Social Security, Medicare, Medicade, and defense spending are the only areas where MAJOR cuts can be implemented to even possibly put the fiscal house in order.  However, most of the people polled, notably "conservatives" (if only they actually were), were not interested in actually cutting any of those programs.

Indeed, the lesson is clear.  There will be no end to bread and circuses until the system implodes.  This is not a uniquely American problem by any stretch of the imagination--the whole of the western world is cratering under a debt load because of the simple fact that people are self-serving first and foremost.  There's not much else that you need to know about people--they protect themselves first.  Politicians work to get re-elected, voters work to keep bread and circuses.  The world is quite simple.

Aside from Joe Kernan's ridiculous attempt to defend Republicans as fiscal conservatives while the data shows that that's more idealistic than realistic, it's quite interesting.  Now you know why we take our particular stance in so many matters.

 

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Wednesday, November 17, 2010

Wednesday Dollar Rally Update and Entertainment

Based on our best internal measurements, the dollar rally probably has a day or two left in it at most.  Though it didn't feel like a rally today, the dollar rose during US market trading hours after pulling back overnight.

From a daily cycle point of view, the euro has completed a 50% retracement from its August 24 lows and the dominant daily cycle has turned positive.  The USDX chart shows a similar cyclical downturn.  Unless the cycles invert, we're near the end of the up move for the dollar--at this stage, we're simply waiting on a confirmation.

Gold appears to have broken out of its trending move and appears due for further downside and a few weeks of consolidation.  We believe that the dollar/gold correlation will break down for 5-7 trading days as gold continues to move down toward 1280 and begins a consolidation process.  We may have a day or two of bounce as gold moves off of its 50 dma, but we're still under the belief that the downside move is not yet over.

Tonight's entertainment is not "family friendly," but is entertaining nonetheless.  It is a sarcastic, crude parody of Vince (of "SlapChop" and "Sham-WOW" infomercial fame) pimping a scanner for TSA to make people fill better about their naked scans.  Very entertaining.



P.S. The newsletter is still coming!  We're behind on getting everything done, but it will be out soon!  If you haven't signed up for it, you won't want to miss it!

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Sunday, November 14, 2010

Intermediate Term Dollar Rally / Gold Pullback Possible

In reviewing charts this weekend,there exists a good possibility that the dollar rally could end up stronger than originally anticipated. On the weekly GLD and UUP ETF charts, used because they show relevant volume information, there are both cyclical and fractal signs of a top in gold and a bottom in the USD. The upcoming week should confirm the move. Assuming it does, we're looking for a multi-week pullback and multi-month consolidation period.



We are particularly interested in the 1280-1300 range for gold at this time and will be looking for signs of a reversal at that stage.  If this is an intermediate term correction, it will be marked by a move below 1240 with a possible, worst case low in the 1050-1100 range.  We don't anticipate it being that much of a pullback at this stage,  but the possibility exists.  It is more likely that a move to 1240 would be a best case pullback for bulls looking to add to positions.  We probably won't be that lucky...

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The Dredd Market Report is a guide targeting new investors with education and techniques for protecting and growing their wealth in turbulent times.

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