Empire of Dunces


Critical Times

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It has been a long time since my last update, on account of our regularly scheduled meetings. But I need to drop you a quick note in light of current developments. A lot has happened these last few months. The cartel for the suppression of the precious metals prices has essentially come out into the open, and nobody in their right mind can still doubt their existence. Our speculative portfolio also took a hit from all of this. Your best insurance, as always, remains to hold physical silver and gold. And not to hold it within the banking system either! Private storage! As far as speculation in paper silver and gold goes – this is an extremely risky proposition. The upside potential is enormous certainly, but so is the downside potential. Allow me to worry about that.

The reason for this current missive, however, is a different one. The Greek debt crisis is taking on systemic threatening proportions. Right now, a number of indicators are flashing warning signs. We are due for a correction anyhow. If you combine that with the upcoming end of QE2 (however temporary it will be) and the very real threat of a Greek default, which is appearing ever more certain these last few days, then we are talking about a crash of epic proportions within the next few weeks, possibly days. The dollar is rising strongly. Treasuries will also rise in this environment. Pretty much everything else will be sold off hard. Precious metals, commodities in general. Stock markets, emerging markets, you name it.

To name just a few red-flashing indicators – the Euro is dropping heavily and close to inflection points that might indicate a drop all the way to 1.25 to the USD. The Russell 2000 has fallen through every support level already, and now is just waiting for that final nudge, before a precipitous fall that looks to go all the way to 700, possibly more. Agriculturals (RJA) are also on the edge of their 200 day moving averages, and once they cross that have a ways to fall further still.

Step very carefully in the markets right now. Cash is not a bad place to be in. And you really want to have some cash on hand for all the buying opportunities, especially in the mining sector, once this crash has really gone through. Now obviously, I cannot look into the future. My analysis might be wrong. But the probabilities are strongly pointing in this direction. In the end, we are just dealing with probabilities after all. So – prepare. But do not yet get out of dodge and hide in the bunker. However, things could start to move very quickly very soon. Be ready.


Written by gloege

June 16, 2011 at 11:41

Posted in Uncategorized

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