The Domino Depression or Crash of 2008
Tuesday's stock market crash was not the beginning of the Crash of 2008. Nor was it the end. It was, however, the end of the beginning.
This depression had its origins perhaps in late June of 2007 when two Bear Sterns hedge funds suddenly and with no warning went teats up. But we cannot fail to give full credit to the Axis of Weasels centered in the White House, led by a C.I. Vice President, ably assisted by his hand puppet, the Smirking Chimp. We must give full credit to the folly of waging two simultaneous wars of aggression to guarantee the security of Israel. The twin wars may well result in the financial destruction of both Israel and her vassal state, the United States of America.
We should acknowledge the 20-year Yen carry trade that provided free cash to every scheme not worth considering by any rational investor but well worth tossing money into by 7800 hedge fund managers with lots of dollars and no cents.
I was recently in Vancouver speaking at Joe Martin's Vancouver gold show. The title I used was "The connection between $516 trillion dollars in derivatives and the crash of 2008." The timing was pretty good. Asia and Europe had already crashed. I had a meeting with a fund manager who got caught offside in the Dow. The overnight crash generated a margin call for him. It wasn't a big deal, he had the money. It was in a New York bank as Americans celebrated Martin Luther King Day. So he got sold out.
Have I mentioned that we are in a crash bigger than any in world history? Have I failed to suggest that you should hunker down and be cautious, this is not the time to be holding real estate or CDs? Maybe I should have said that holding a long Dow position over a holiday weekend could get expensive.
I hate public speaking. Everyone else can blather on for hours about boring crap that no one wants to hear anyway. I'm not in the business of stroking people's fantasies. That's how you get popular as a newsletter writer. Tell people what they want to hear. You'll soon grow rich and famous and be asked to speak at all the conferences. If your recommendations don't work, blame it on manipulation or conspiracy; those are always popular with the mob.
I would far rather learn than teach so I always open my talks up for questions. The first few people to ask a question are hesitant but soon you go off into some really interesting areas that people are actually interested in.
Someone asked me what the Fed would do. My response was that I wasn't sure but we could count on them doing something stupid like dropping interest rates half a point or more in panic. Whatever it takes to destroy the dollar, that's what they will do.
You can make more money by sitting on your hands than anything else. I know one self-elected Guru who has said for years that if the general stock market crashed, resource stocks wouldn't be affected. You can look at your portfolio value as of last week and as of this week and figure out just how accurate that suggestion was. I caution against margin but I also caution against trying to day trade every blip in the price of gold. When investors dump the bath water, often they dump the baby.
Sit on your hands once you are in the right stocks. The market will go up and it will go down but if you pick correctly, you'll do fine even if a few days can cause sleepless nights. Remember, those who don't come to this website are in far worse condition than you are.
We have entered the Domino Depression; it's not a recession. There also is no way of preventing it. Every day some bank or a couple of hedge funds will be announcing more massive losses until 516.4 trillion dollars worth of fraud has been accounted for. It will be one domino, then another until you think it has gone on for a century.
The Axis of Weasels in Washington is going to pour more fuel on the fire in a futile attempt to prevent people from knowing what is going on but Friday's action in the general market suggests people do get it. When you have created a problem by having too cheap credit, you cannot solve the problem by dumping cash out of helicopters.
I know of only one safe haven and that is in the safety of gold, silver and resource stocks. I like energy. When the government pours more worthless paper into the marketplace, real commodities are the only place to be.
On December 20th I said it was time to get back into the pool. In general most advisors were skeptical. I didn't hem and haw, I just said it like I saw it. I was right.
Things got a little frothy and last week we had a short brutal correction. That's now over and according to my favorite chart, we are about to embark on an exciting time for resource stocks. Back in the pool, the minor correction is over. Gold and gold stocks are about to go up in a big way. There are no other safe alternatives and once the public figures that out, things are going to get real interesting.
I've been scratching my head, trying to determine the best way to play this and I think I've found something interesting. Toronto has an ETF called the Horizons BetaPro S&P/TSX Global Gold Bull Plus ETF (HGU:TSX).
If you are uncomfortable with specific resource stocks, you may want to consider an ETF. The HGU.TO offers an interesting play.