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cowboycarl04
18th February 2010, 15:37
Discount rate was raised to 0.75%. Someone is starting to worry about inflation....

http://www.marketwatch.com/story/fed-hikes-discount-rate-says-not-tightening-2010-02-18

By Greg Robb WASHINGTON (MarketWatch) -- The Federal Reserve announced late Thursday that it was raising its discount rate in order to push banks to borrow from the private market for short-term credit. In a statement, the Fed said it would raise its discount, or primary credit rate, to 0.75% from 0.50% effective on Friday. Fed chairman Ben Bernanke signaled last week that the Fed was mulling the move. Fed watchers had expected the move to come at the next Fed meeting in March. Today's action shows a sense of urgency on the part of the Fed officials. The Fed said the move is intended to "normalize" their operations as the financial crisis winds down. The change is not a tightening and does not signal any change in monetary policy, the Fed said.

cowboycarl04
18th February 2010, 15:38
I like how it was slipped in under the radar while news of the plane hitting the IRS building in Austin is shaping.

Read his long rant. Much of what he says is how we feel, but he simply lost it.

DaBrownsRPhat
18th February 2010, 15:48
http://www.liveleak.com/view?i=5a1_1266517351

If you’re reading this, you’re no doubt asking yourself, “Why did this have to happen?” The simple truth is that it is complicated and has been coming for a long time. The writing process, started many months ago, was intended to be therapy in the face of the looming realization that there isn’t enough therapy in the world that can fix what is really broken. Needless to say, this rant More.. could fill volumes with example after example if I would let it. I find the process of writing it frustrating, tedious, and probably pointless… especially given my gross inability to gracefully articulate my thoughts in light of the storm raging in my head. Exactly what is therapeutic about that I’m not sure, but desperate times call for desperate measures.

We are all taught as children that without laws there would be no society, only anarchy. Sadly, starting at early ages we in this country have been brainwashed to believe that, in return for our dedication and service, our government stands for justice for all. We are further brainwashed to believe that there is freedom in this place, and that we should be ready to lay our lives down for the noble principals represented by its founding fathers. Remember? One of these was “no taxation without representation”. I have spent the total years of my adulthood unlearning that crap from only a few years of my childhood. These days anyone who really stands up for that principal is promptly labeled a “crackpot”, traitor and worse.

While very few working people would say they haven’t had their fair share of taxes (as can I), in my lifetime I can say with a great degree of certainty that there has never been a politician cast a vote on any matter with the likes of me or my interests in mind. Nor, for that matter, are they the least bit interested in me or anything I have to say.

Why is it that a handful of thugs and plunderers can commit unthinkable atrocities (and in the case of the GM executives, for scores of years) and when it’s time for their gravy train to crash under the weight of their gluttony and overwhelming stupidity, the force of the full federal government has no difficulty coming to their aid within days if not hours? Yet at the same time, the joke we call the American medical system, including the drug and insurance companies, are murdering tens of thousands of people a year and stealing from the corpses and victims they cripple, and this country’s leaders don’t see this as important as bailing out a few of their vile, rich cronies. Yet, the political “representatives” (thieves, liars, and self-serving scumbags is far more accurate) have endless time to sit around for year after year and debate the state of the “terrible health care problem”. It’s clear they see no crisis as long as the dead people don’t get in the way of their corporate profits rolling in.

And justice? You’ve got to be kidding!

How can any rational individual explain that white elephant conundrum in the middle of our tax system and, indeed, our entire legal system? Here we have a system that is, by far, too complicated for the brightest of the master scholars to understand. Yet, it mercilessly “holds accountable” its victims, claiming that they’re responsible for fully complying with laws not even the experts understand. The law “requires” a signature on the bottom of a tax filing; yet no one can say truthfully that they understand what they are signing; if that’s not “duress” than what is. If this is not the measure of a totalitarian regime, nothing is.

How did I get here?

My introduction to the real American nightmare starts back in the early ‘80s. Unfortunately after more than 16 years of school, somewhere along the line I picked up the absurd, pompous notion that I could read and understand plain English. Some friends introduced me to a group of people who were having ‘tax code’ readings and discussions. In particular, zeroed in on a section relating to the wonderful “exemptions” that make institutions like the vulgar, corrupt Catholic Church so incredibly wealthy. We carefully studied the law (with the help of some of the “best”, high-paid, experienced tax lawyers in the business), and then began to do exactly what the “big boys” were doing (except that we weren’t steeling from our congregation or lying to the government about our massive profits in the name of God). We took a great deal of care to make it all visible, following all of the rules, exactly the way the law said it was to be done.

The intent of this exercise and our efforts was to bring about a much-needed re-evaluation of the laws that allow the monsters of organized religion to make such a mockery of people who earn an honest living. However, this is where I learned that there are two “interpretations” for every law; one for the very rich, and one for the rest of us… Oh, and the monsters are the very ones making and enforcing the laws; the inquisition is still alive and well today in this country.

That little lesson in patriotism cost me $40,000+, 10 years of my life, and set my retirement plans back to 0. It made me realize for the first time that I live in a country with an ideology that is based on a total and complete lie. It also made me realize, not only how naive I had been, but also the incredible stupidity of the American public; that they buy, hook, line, and sinker, the crap about their “freedom”… and that they continue to do so with eyes closed in the face of overwhelming evidence and all that keeps happening in front of them.

Before even having to make a shaky recovery from the sting of the first lesson on what justice really means in this country (around 1984 after making my way through engineering school and still another five years of “paying my dues”), I felt I finally had to take a chance of launching my dream of becoming an independent engineer.

On the subjects of engineers and dreams of independence, I should digress somewhat to say that I’m sure that I inherited the fascination for creative problem solving from my father. I realized this at a very young age.

The significance of independence, however, came much later during my early years of college; at the age of 18 or 19 when I was living on my own as student in an apartment in Harrisburg, Pennsylvania. My neighbor was an elderly retired woman (80+ seemed ancient to me at that age) who was the widowed wife of a retired steel worker. Her husband had worked all his life in the steel mills of central Pennsylvania with promises from big business and the union that, for his 30 years of service, he would have a pension and medical care to look forward to in his retirement. Instead he was one of the thousands who got nothing because the incompetent mill management and corrupt union (not to mention the government) raided their pension funds and stole their retirement. All she had was social security to live on.

In retrospect, the situation was laughable because here I was living on peanut butter and bread (or Ritz crackers when I could afford to splurge) for months at a time. When I got to know this poor figure and heard her story I felt worse for her plight than for my own (I, after all, I thought I had everything to in front of me). I was genuinely appalled at one point, as we exchanged stories and commiserated with each other over our situations, when she in her grandmotherly fashion tried to convince me that I would be “healthier” eating cat food (like her) rather than trying to get all my substance from peanut butter and bread. I couldn’t quite go there, but the impression was made. I decided that I didn’t trust big business to take care of me, and that I would take responsibility for my own future and myself.

Return to the early ‘80s, and here I was off to a terrifying start as a ‘wet-behind-the-ears’ contract software engineer... and two years later, thanks to the fine backroom, midnight effort by the sleazy executives of Arthur Andersen (the very same folks who later brought us Enron and other such calamities) and an equally sleazy New York Senator (Patrick Moynihan), we saw the passage of 1986 tax reform act with its section 1706.

For you who are unfamiliar, here is the core text of the IRS Section 1706, defining the treatment of workers (such as contract engineers) for tax purposes. Visit this link for a conference committee report (http://www.synergistech.com/1706.shtml#ConferenceCommitteeReport) regarding the intended interpretation of Section 1706 and the relevant parts of Section 530, as amended. For information on how these laws affect technical services workers and their clients, read our discussion here (http://www.synergistech.com/ic-taxlaw.shtml).


SEC. 1706. TREATMENT OF CERTAIN TECHNICAL PERSONNEL.

(a) IN GENERAL - Section 530 of the Revenue Act of 1978 is amended by adding at the end thereof the following new subsection:

(d) EXCEPTION. - This section shall not apply in the case of an individual who pursuant to an arrangement between the taxpayer and another person, provides services for such other person as an engineer, designer, drafter, computer programmer, systems analyst, or other similarly skilled worker engaged in a similar line of work.

(b) EFFECTIVE DATE. - The amendment made by this section shall apply to remuneration paid and services rendered after December 31, 1986.

Note:

· "another person" is the client in the traditional job-shop relationship.

· "taxpayer" is the recruiter, broker, agency, or job shop.

· "individual", "employee", or "worker" is you.



(continued next post .....)

DaBrownsRPhat
18th February 2010, 15:49
(continued from above post ....)

Admittedly, you need to read the treatment to understand what it is saying but it’s not very complicated. The bottom line is that they may as well have put my name right in the text of section (d). Moreover, they could only have been more blunt if they would have came out and directly declared me a criminal and non-citizen slave. Twenty years later, I still can’t believe my eyes.

During 1987, I spent close to $5000 of my ‘pocket change’, and at least 1000 hours of my time writing, printing, and mailing to any senator, congressman, governor, or slug that might listen; none did, and they universally treated me as if I was wasting their time. I spent countless hours on the L.A. freeways driving to meetings and any and all of the disorganized professional groups who were attempting to mount a campaign against this atrocity. This, only to discover that our efforts were being easily derailed by a few moles from the brokers who were just beginning to enjoy the windfall from the new declaration of their “freedom”. Oh, and don’t forget, for all of the time I was spending on this, I was loosing income that I couldn’t bill clients.

After months of struggling it had clearly gotten to be a futile exercise. The best we could get for all of our trouble is a pronouncement from an IRS mouthpiece that they weren’t going to enforce that provision (read harass engineers and scientists). This immediately proved to be a lie, and the mere existence of the regulation began to have its impact on my bottom line; this, of course, was the intended effect.

Again, rewind my retirement plans back to 0 and shift them into idle. If I had any sense, I clearly should have left abandoned engineering and never looked back.

Instead I got busy working 100-hour workweeks. Then came the L.A. depression of the early 1990s. Our leaders decided that they didn’t need the all of those extra Air Force bases they had in Southern California, so they were closed; just like that. The result was economic devastation in the region that rivaled the widely publicized Texas S&L fiasco. However, because the government caused it, no one gave a **** about all of the young families who lost their homes or street after street of boarded up houses abandoned to the wealthy loan companies who received government funds to “shore up” their windfall. Again, I lost my retirement.

Years later, after weathering a divorce and the constant struggle trying to build some momentum with my business, I find myself once again beginning to finally pick up some speed. Then came the .COM bust and the 911 nightmare. Our leaders decided that all aircraft were grounded for what seemed like an eternity; and long after that, ‘special’ facilities like San Francisco were on security alert for months. This made access to my customers prohibitively expensive. Ironically, after what they had done the Government came to the aid of the airlines with billions of our tax dollars … as usual they left me to rot and die while they bailed out their rich, incompetent cronies WITH MY MONEY! After these events, there went my business but not quite yet all of my retirement and savings.

By this time, I’m thinking that it might be good for a change. Bye to California, I’ll try Austin for a while. So I moved, only to find out that this is a place with a highly inflated sense of self-importance and where damn little real engineering work is done. I’ve never experienced such a hard time finding work. The rates are 1/3 of what I was earning before the crash, because pay rates here are fixed by the three or four large companies in the area who are in collusion to drive down prices and wages… and this happens because the justice department is all on the take and doesn’t give a **** about serving anyone or anything but themselves and their rich buddies.

To survive, I was forced to cannibalize my savings and retirement, the last of which was a small IRA. This came in a year with mammoth expenses and not a single dollar of income. I filed no return that year thinking that because I didn’t have any income there was no need. The sleazy government decided that they disagreed. But they didn’t notify me in time for me to launch a legal objection so when I attempted to get a protest filed with the court I was told I was no longer entitled to due process because the time to file ran out. Bend over for another $10,000 helping of justice.

So now we come to the present. After my experience with the CPA world, following the business crash I swore that I’d never enter another accountant’s office again. But here I am with a new marriage and a boatload of undocumented income, not to mention an expensive new business asset, a piano, which I had no idea how to handle. After considerable thought I decided that it would be irresponsible NOT to get professional help; a very big mistake.

When we received the forms back I was very optimistic that they were in order. I had taken all of the years information to Bill Ross, and he came back with results very similar to what I was expecting. Except that he had neglected to include the contents of Sheryl’s unreported income; $12,700 worth of it. To make matters worse, Ross knew all along this was missing and I didn’t have a clue until he pointed it out in the middle of the audit. By that time it had become brutally evident that he was representing himself and not me.

This left me stuck in the middle of this disaster trying to defend transactions that have no relationship to anything tax-related (at least the tax-related transactions were poorly documented). Things I never knew anything about and things my wife had no clue would ever matter to anyone. The end result is… well, just look around.

I remember reading about the stock market crash before the “great” depression and how there were wealthy bankers and businessmen jumping out of windows when they realized they screwed up and lost everything. Isn’t it ironic how far we’ve come in 60 years in this country that they now know how to fix that little economic problem; they just steal from the middle class (who doesn’t have any say in it, elections are a joke) to cover their asses and it’s “business-as-usual”. Now when the wealthy **** up, the poor get to die for the mistakes… isn’t that a clever, tidy solution.

As government agencies go, the FAA is often justifiably referred to as a tombstone agency, though they are hardly alone. The recent presidential puppet GW Bush and his cronies in their eight years certainly reinforced for all of us that this criticism rings equally true for all of the government. Nothing changes unless there is a body count (unless it is in the interest of the wealthy sows at the government trough). In a government full of hypocrites from top to bottom, life is as cheap as their lies and their self-serving laws.

I know I’m hardly the first one to decide I have had all I can stand. It has always been a myth that people have stopped dying for their freedom in this country, and it isn’t limited to the blacks, and poor immigrants. I know there have been countless before me and there are sure to be as many after. But I also know that by not adding my body to the count, I insure nothing will change. I choose to not keep looking over my shoulder at “big brother” while he strips my carcass, I choose not to ignore what is going on all around me, I choose not to pretend that business as usual won’t continue; I have just had enough.

I can only hope that the numbers quickly get too big to be white washed and ignored that the American zombies wake up and revolt; it will take nothing less. I would only hope that by striking a nerve that stimulates the inevitable double standard, knee-jerk government reaction that results in more stupid draconian restrictions people wake up and begin to see the pompous political thugs and their mindless minions for what they are. Sadly, though I spent my entire life trying to believe it wasn’t so, but violence not only is the answer, it is the only answer. The cruel joke is that the really big chunks of **** at the top have known this all along and have been laughing, at and using this awareness against, fools like me all along.

I saw it written once that the definition of insanity is repeating the same process over and over and expecting the outcome to suddenly be different. I am finally ready to stop this insanity. Well, Mr. Big Brother IRS man, let’s try something different; take my pound of flesh and sleep well.



The communist creed: From each according to his ability, to each according to his need.

The capitalist creed: From each according to his gullibility, to each according to his greed.



Joe Stack (1956-2010)

02/18/2010

realmoney
18th February 2010, 15:59
Discount rate was raised to 0.75%. Someone is starting to worry about inflation....


Just a sign of things to come (more tightening from the Fed). This is of course bullish for the dollar at least short term and equities/PMs will probably not like the news much. Will be interesting to see how well gold holds up to this announcement over the next few weeks. I'm still stacking bills until I can turn them in for something real on the (real)cheap.

RM

akak
18th February 2010, 16:00
This rate hike is going to have about as much effect on the prices of gold and silver as the loudly-trumpeted "threat" of another IMF gold sale (which had already been announced last year, wasn't it?): squat. Both amount to little more than a fart in the wind, with similar lasting effects.

Talk about the mouse that roared --- both the Fed and the IMF are more like the lions that squeaked!

Sakata
18th February 2010, 16:10
I got back from a meeting and saw the sharp drop in PM a little after 4pm so I came here looking for new. I did not expect this news. This combined with the thread about COMEX silver make me glad I am into silver for the long haul.

Barack Obama
18th February 2010, 16:27
I'm glad the Fed did this, if there are two things the American people don't pay enough of its interest and taxes. The Fed and I will change that ;)

DaBrownsRPhat
18th February 2010, 16:32
I'm glad the Fed did this, if there are two things the American people don't pay enough of its interest and taxes. The Fed and I will change that ;)

CHANGE!

YES WE CAN!

HOPE!

akak
18th February 2010, 16:49
CHANGE!

YES WE CAN!

HOPE!

Chains we can believe in!

http://eurorus4en.files.wordpress.com/2009/02/chained-prisoner-source-reuters-c.jpg

Jake
18th February 2010, 17:11
Just a sign of things to come (more tightening from the Fed). This is of course bullish for the dollar at least short term and equities/PMs will probably not like the news much. Will be interesting to see how well gold holds up to this announcement over the next few weeks. I'm still stacking bills until I can turn them in for something real on the (real)cheap.

RM

It's going to be very difficult to raise fed funds rates as it will increase the cost of servicing our debt enormously. Additionally. the strong dollar will cause us to add more to out trade deficit and make doing biz overseas more expensive. Raising fed funds rates will hit the equities hard. AND---This will do nothing to improve the economy or joblessness.

akak
18th February 2010, 17:14
It's going to be very difficult to raise fed funds rates as it will increase the cost of servicing our debt enormously. Additionally. the strong dollar will cause us to add more to out trade deficit and make doing biz overseas more expensive. Raising fed funds rates will hit the equities hard. AND---This will do nothing to improve the economy or joblessness.

Indeed, I simply gloat at how the Fed and US government have painted themselves into a corner with their artificial punching-down of interest rates and simultaneous, unprecedented, unsustainable and utterly reckless program of borrow-and-spend. I will relish every second of watching their insanity blow up in their faces --- maybe, just MAYBE the sheeple will then finally wake up to the enormity of the fraud and scam that the entire last 40 years of pure fiat currency and "financial engineering" has truly been.

But, given how watching our nation being raped and pillaged by a small group of political and financial oligarchs has elicited little more than a giant yawn so far, maybe I am being a bit too optimistic.

realmoney
18th February 2010, 17:23
It's going to be very difficult to raise fed funds rates as it will increase the cost of servicing our debt enormously. Additionally. the strong dollar will cause us to add more to out trade deficit and make doing biz overseas more expensive. Raising fed funds rates will hit the equities hard. AND---This will do nothing to improve the economy or joblessness.

I agree. The average American will continue to get screwed.

Jake
18th February 2010, 17:40
I agree. The average American will continue to get screwed.


Now...taking this conversation further, If fed funds were to rise as a result of FOLLOWING the lead of treasury rates, (remember, I was looking at the 10-year note to rise above 4% to signal a beginning of front-page inflation talk), the fed will have to increase money printing rates to keep up with debt service rates.

Money Printing causes High Debt Service Rates causes More Money Printing causes Discount Rate Increases causes Treasury Rate Increases causes Fed Funds Rate Increases causes Higher Debt Service Interest Rates causes More Money Printing

RINCE AND REPEAT (Dollar Index Rises Briefly)

Eventually, Gold and Silver Decouple From The Dollar, International Countries Stop Buying Treasuries---We Monetize More Debt and Print More Money.
http://www.schillerinstitute.org/graphics/economics/triple_curve.jpg
More and More Money Printing causes More and More Money Printing causes The Exponential Curve Between Debt and Tax Revenues Gets Wider and Wider causes Hyperinflation causes collapse.

akak
18th February 2010, 17:45
Eventually, Gold and Silver Decouple From The Dollar, International Countries Stop Buying Treasuries---We Monetize More Debt and Print More Money.
http://www.schillerinstitute.org/graphics/economics/triple_curve.jpg
More and More Money Printing causes More and More Money Printing causes The Exponential Curve Between Debt and Tax Revenues Gets Wider and Wider causes Hyperinflation causes collapse.


Cool graph --- never saw this one before.

Too bad we are soon going to be living it.

Jake
18th February 2010, 18:00
Cool graph --- never saw this one before.

Too bad we are soon going to be living it.

Here's a Vid On It
THE TRIPLE CURVE
The Collapse Function
It's Larouche...Overlook him if you think he's a little wacky and focus on the curve section after the first minute of the vid:
http://i3.ytimg.com/vi/Jcb0IBnzCvg/default.jpg
http://www.youtube.com/watch?v=Jcb0IBnzCvg

coctailer
18th February 2010, 19:43
I'm glad the Fed did this, if there are two things the American people don't pay enough of its interest and taxes. The Fed and I will change that ;)

http://i186.photobucket.com/albums/x115/coctailer/1245012700283-1.jpg

Jake
18th February 2010, 19:52
I agree. The average American will continue to get screwed.

Dow Futures are down 73 at this time 5:45 PST.
It'll be Pretty Ugly Tomorrow in the Equities Markets.
It's also possible, the weekly unemployment numbers may surprise upwards meaning more unemployed than expected---leading to speculation the monthly number coming out on March 5 will be worse than expected.

They know tomorrow's number in advance and like to announce bad news together to get it out of the way. Also, remember Rahm Emanuel's, (A.K.A. -Al Capone's) Statement: "never let a good crisis go to waste". They will use this crisis of "deficits" to sell the tax hike Propaganda.

Relayer
18th February 2010, 22:15
Dear Extended Family,
http://jsmineset.com/wp-content/uploads/2010/02/Sinclair16_thumb.jpg (http://jsmineset.com/wp-content/uploads/2010/02/Sinclair16.jpg)
The final Pillar in the gold bull market is a bear market in US Treasuries.
The increase in the discount rate to 0.75% is driven by market realities and a desire to be able to sell US Treasuries as foreign demand falls off.

The bull market in gold moved from $400 to $887.50 in the 1970s as interest rates rose from 3% to 14 7.8% on Ten Year money.

Once again the knee jerk reaction is to sell gold and buy the dollar. Be assured this must happen.

Because the final Pillar is falling while Gold is over $1000, you can look at Armstrong’s $5000 prediction as a realistic possibility.

Stay the course.

Respectfully,
Jim

akak
18th February 2010, 22:26
Dear Extended Family,
http://jsmineset.com/wp-content/uploads/2010/02/Sinclair16_thumb.jpg (http://jsmineset.com/wp-content/uploads/2010/02/Sinclair16.jpg)
The final Pillar in the gold bull market is a bear market in US Treasuries.
The increase in the discount rate to 0.75% is driven by market realities and a desire to be able to sell US Treasuries as foreign demand falls off.

The bull market in gold moved from $400 to $887.50 in the 1970s as interest rates rose from 3% to 14 7.8% on Ten Year money.

Once again the knee jerk reaction is to sell gold and buy the dollar. Be assured this must happen.

Because the final Pillar is falling while Gold is over $1000, you can look at Armstrong’s $5000 prediction as a realistic possibility.

Stay the course.

Respectfully,
Jim

I agree, and yet I cannot shake the thought of a quote from Antal Fekete from a year or two ago: "$1000 gold will be just a milestone ... on the road to Hell." And $1650 gold will just be another such milestone on the same road. We should remember that as much as our precious metal holdings may appreciate in price and even in real value, they will most likely only do so as a reflection of the simultaneous decline in our economy, our living standards and our freedoms. Yes, we may preserve our savings with gold and silver, but things are still going to suck for EVERYONE down the road, precious metals or not.

Sakata
18th February 2010, 22:35
I agree, and yet I cannot shake the thought of a quote from Antal Fekete from a year or two ago: "$1000 gold will be just a milestone ... on the road to Hell." And $1650 gold will just be another such milestone on the same road. We should remember that as much as our precious metal holdings may appreciate in price and even in real value, they will most likely only do so as a reflection of the simultaneous decline in our economy, our living standards and our freedoms. Yes, we may preserve our savings with gold and silver, but things are still going to suck for EVERYONE down the road, precious metals or not.

A very wise sentiment.

aequitas
19th February 2010, 00:11
The Fed is just trying to manipulate investors into buying the dollar by showing that they are willing to raise rates. I doubt they will meaningfully raise rates in 2010 because it would explode interest payments on federal debt and deal a blow to the housing market.

GV_silvergold
19th February 2010, 00:53
I believe they *must* raise rates in order to attract buyers of gov't bonds. This is referred to as the "Crowding Out Effect" and I'm surprised it's taken this long.

aequitas
19th February 2010, 02:01
I believe they *must* raise rates in order to attract buyers of gov't bonds. This is referred to as the "Crowding Out Effect" and I'm surprised it's taken this long.

This normally would be true, but the Fed has found ways around the inconvinient free market, such as loaning money to central banks mostly in Europe and Asia so that they will use the borrowed money to buy treasury bonds and bills. A temporary and dangerous solution to a serious problem. Any you are right, interest rates on bonds should have risen long ago considering the deficit and everything else going on.

Jake
19th February 2010, 11:49
Wow... this is important news. According to my Chicken Flock Theory, this news is classified as strongly Intense, highly relevant, highly contagious, strongly negatively biased, broad scope, and with moderate to long duration.

Such factors point to strong bearish signals for both Gold and Silver. I predict there will be about a 60-80% chance we have a 5% correction and a 90% chance we have a 3% correction. The Asian market is already starting to move.

In the spirit of sharing (and to make Jake Happy) I am publicly announcing that I have increased my stake with ZSL. I came in at around $5. I expect it to hit at least $6 by tommorrow. That may be my exit point depending on what other news comes out tommorrow.

Thanks for posting your intentions and thank you for sharing your price and target. You didn't post a stop, but your post here is miles ahead of these idiot TA-Masters Main and Q. See Q/Main, there are people in here who understand that you two are just little jerks who want to babble on and on about your nonsense but have no accountability for your predictions and announcements.

Now--JOJO---as of this response, silver is up to $16.46, the market didn't show much downside except for that -41 dow futures at the open. I hope you didn't get stopped out or decided to bail early as this news was just another attempt by "them" to manipulate. As such, it's generally very difficult to take advantage of these insane moves.

Jake
19th February 2010, 11:52
We should remember that as much as our precious metal holdings may appreciate in price and even in real value, they will most likely only do so as a reflection of the simultaneous decline in our economy, our living standards and our freedoms. Yes, we may preserve our savings with gold and silver, but things are still going to suck for EVERYONE down the road, precious metals or not.

WELL SAID AS USUAL AKAK. THANK YOU.

Jake
19th February 2010, 12:02
I believe they *must* raise rates in order to attract buyers of gov't bonds. This is referred to as the "Crowding Out Effect" and I'm surprised it's taken this long.

Bingo...Now, how is this accomplished?
By signaling the discount rate hike, as was done yesterday, and forcing the market to do its job for them by allowing the 10-year note to drop in price and rise in yield, the Fed is accomplishing what it wants to do short term.

I believe 4% is a psychological barrier that should trigger some additional inflation fears. They can't raise fed funds too much as this will increase debt service costs, but they will eventually raise them against their will as inflation will accelerate out of control. This time, I believe it will be worse than 1980. In the meantime, China gets higher interest but reduces their purchases forcing the Fed to increase monetization. Money Printing hasn't even begun to accelerate. Get silver and gold while you can!

Steadfast
19th February 2010, 12:04
yesterday a dramatically bearish economic event happened which should have cause silver to plummet, and yet the market went sideways instead.

You see, yesterday around 4:30pm, the fed raised their rates .5%... A huge bearish event!

This should have sent silver and gold into a week long tail spin… NOPE!
And I even said as much late yesterday to a co-worker.

The Silver prices crashed for about 30 minutes, dropped 60 cents and hit the very solid NEW silver price floor of $15.60 and like a ball bouncing and rolling out, the price stopped falling and went sideways the remaining around $15.60…

The Chinese woke up that morning and said “HAY, those idiot Americans dropped the price for us again! What a deal”
and BOING silver shot back up to $16.10 so far today.

That’s why I say,
In these bazaar times “Sideways is the same as UP”!

Jake
19th February 2010, 13:17
"... but some other news came out after that that changed the bias of the market. Does anyone have any idea what that news is?"

The difficult part is how to keep on top of the news so that you are not blind sighted.

This time, I am not basing it on my theory. Just my gut feeling. I'm guessing we will hit low 15's.

Again, Condensed for your reading pleasure:
Do you understand how this sounds?...Your theory requires you to not only keep on top of the news 24 hours a day, but MAKES you interpret it exactly right! Now---it looks like something happened...the move happens...and we find out why after the fact, just like the discount rate news. The move was already in. The only way to act on it was to not only to be IN FRONT OF THE COMPUTER AS IT HAPPENED, but to GUESS THE RIGHT WAY WITHOUT THE KNOWLEDGE OF WHAT THE NEWS WAS. INSANITY!

THIS TIME, you're trading based on "guessing or guts"?...So it didn't take you long to either modify or discount or justify your trade or your feelings in the middle of a trade regarding your theory?...I Must Point Out---This Theory of yours either needs infinite tweeking or your account will be emptied in short order.

Jake
19th February 2010, 13:59
]"One Axiom in my thoery describes a class of news called "fundamental" news. I have not encountered fundamental news yet. If I do, I can bet my house that I will interpret the direction correctly."[/B]

To my knowledge, there is no news that isn't "fundamental" if you place it in the context of being "other than technical". News can run the range of no effect to cataclysmic, but acting on it requires the same diligence regardless of the magnitude of its effect.

"So far, in my last two predictions, it has correctly predicted the major move, but not the direction. Then of course, there is manipulation as you very well know. My theory will definitely fail in the presence of such obvious manipulation."

I submit to you that manipulation will always be present and will trip you up all the time. This is why gurus like Main and Q are always wrong. I have seen nothing from you yet that compels me to buy your book that outlines your theory. However, you are confirming my premise that trading markets is equivalent to pissing into a fan set on high speed.

"While the theory is subjective - subject to the correct interpretation of the news bias, it is nonetheless very predictive of impending major moves. If nothing else, the theory is useful in telling you that **** is about to happen well ahead of **** actually happening."

Then, your only "trading" vehicle would be the straddle. But you know that by adding the extra commission and spread associated with it, you'll be doubling your losses when you're wrong. Thus, you must double your wins when your guesses turn out to be right.

Additionally, you must resist the temptation that you've already exhibited, which is the tendency to second-guess, bail early, tweek, or throw-out your original assumptions during a trade. Very Bad. Never change your theories while you still have a trade on. Tweek between trades.

Of course, this has little meaning as "trading" is just as meaningless and, as such, is a fool's game. Please don't take that last statement like Main or Q did personally, I'm just pointing out facts that can not be disputed.

akak
19th February 2010, 14:15
Without getting into the argument between you two, I have noticed a subtle but distinctive trend over the years in which "trading", which WAS in my simplistic view buying and selling based on fundamental knowledge of a particular market, has morphed into GAMBLING based on little more than superficial analysis and herd behavior. I am not and never have been knowledgeable enough about any market to engage in the former, nor ever willing or reckless enough to engage in the latter. That is why I am a "buy and hold" type, at least when it comes to the precious metals. I have never entertained any desire to chase the "quick buck", and watching a multitude of better-informed individuals having lost their shirts doing so does not incline me to try it now.

Jake
19th February 2010, 14:50
Without getting into the argument between you two, I have noticed a subtle but distinctive trend over the years in which "trading", which WAS in my simplistic view buying and selling based on fundamental knowledge of a particular market, has morphed into GAMBLING based on little more than superficial analysis and herd behavior. I am not and never have been knowledgeable enough about any market to engage in the former, nor ever willing or reckless enough to engage in the latter. That is why I am a "buy and hold" type, at least when it comes to the precious metals. I have never entertained any desire to chase the "quick buck", and watching a multitude of better-informed individuals having lost their shirts doing so does not incline me to try it now.

I would not characterize our discussion as an argument and hope that JoJo doesn't get that impression. After having lived the "trading chase" to uncover the "Holy Grail" for more than a decade and discovering the insanity and the fallacy of this endeavour the hard way by "blowing out my account" on two occasions, I feel an obligation to contribute as much of my insights about this subject as I can to any one who will listen---Even Main and Q.

This is as insideous as gambling in Las Vegas. There will always be those newcomers to the game who think they've got something no one else has ever thought of to "beat the system". Comparatively, there will always be brokers and advisors ready with their "proprietary charts" poised to swoop down upon new minds full of mush in a never-ending attempt to drain trading accounts of their equity.

The trouble is that it's part of human nature to "beat the system" and to try to get something for nothing. This is why so few people who are old are traders or gamblers unless they've developed an addiction.

DaleFromCalgary
19th February 2010, 15:02
Apropos to the Fed rate hike, the Bank of Canada has been coyly tiptoeing around the Canadian housing bubble currently underway (details at www.greaterfool.ca). The BoC has said they will hold the overnight rate at 0.25% until June, so stupid young couples across the country are maxing out on McMansion mortgages without thinking about what will happen five years from now.

The Minister of Finance made a few changes earlier this week to the Canadian Mortgage and Housing Corporation rules for insuring lenders that might shrink the bubble slightly. However, the Minister didn't have the guts to tighten the rules to 10% down payment and not more than 30-year amortization. To be fair to him, the problem is that as much as the Tories would like to clamp down hard, they are a minority government and must be careful the Liberals and NDP don't force an election.

Canada is repeating every mistake that the USA made in housing. Politics takes precedence over everything else in a minority government.

paranormalg35
19th February 2010, 15:18
check out this guys take on how it went down

http://www.youtube.com/watch?v=ApvPnEoghvg

Jake
19th February 2010, 15:40
Canada is repeating every mistake that the USA made in housing. Politics takes precedence over everything else in a minority government.

This is the dilemma all governments are in. If citizens don't buy things that really impact the economy with consumption, such as appliances, cars, furnature, home insurance plans, home burglar alarms, landscaping materials and plants, paint and services like cleaning, and cement for driveway repairs, roofing tiles, pool heaters, solar panels, floor tiles, wall paneling, outdoor sheds, extra pets, lawn mowers, tree trimmers, etc., the economy will never recover. What preceeds these purchases?
HOMES

What preceeds the purchases of homes?
JOBS.

What stimulates Jobs?
Lower taxes and less regulation on business.

What is the Idiot President doing to encourage the expansion of business?
He's proposing higher taxes and additional regulations such as Cap and Trade and Universal Healthcare in the Medical Insurance Industry, And Environmental BS in the Car Industry...and Countless other bureaucratic nonsense while throwing tax-payer money away on useless stimuli packages designed to go to lobbiests and campaign doaners.

So to address your statement: They must stimulate housing in the very same way they did it the first time that resulted in the first bubble. Artificially allow those who can't afford it take on new debt so that, short term, they'll consume. And---Short term, if everything goes as planned, which it won't, because there is no jobs recovery, consume more so that the politicians can say they know how to fix things. It would be very amusing if it wasn't very sad.

Jake
20th February 2010, 14:40
http://i2.ytimg.com/vi/uyVu0DGET6Q/default.jpg
http://www.youtube.com/watch?v=uyVu0DGET6Q

DaleFromCalgary
20th February 2010, 14:46
"And Environmental BS in the Car Industry"

Which, however, bodes well for platinum and palladium, especially the latter. Pd has more room to move price-wise as demand for catalytic convertors and emmission controls increases.

Jake
20th February 2010, 15:34
"And Environmental BS in the Car Industry"

Which, however, bodes well for platinum and palladium, especially the latter. Pd has more room to move price-wise as demand for catalytic convertors and emmission controls increases.

I'd be very wary about the environmental premiums that are in the price of platinum,palladium and even rhodium right now.
This Idiot we call "president" is not only a one-termer, but both houses of congress will flip to the republicans in November 2010 and all this liberal BS Cap and trade garbage will be thrown under the bus.
Platinum and palladium should drop in anticipation of this over the summer.
Spreads between Platinum and gold should narrow based on this fundamental.
Remember when platinum and gold were almost the same price in Oct 2008?