Blog for December 9, 2009 [See POST-CLOSE REPORT]

I will be out of the office so to speak, doctors appointment, and hopefully will check back in later. Also, I want to finish (starting it) my Attitude survey with Mark Douglas and think this may be very beneficial. Time, so much to do and so little T in our present reality to accomplish things meaningful, but I have hope that we can make a dent if we work for it.

Bill,

What you so clearly illustrate in today's commentary relating to the markets and the global economy can, I believe, be taken one step further. The problems in these two important aspects of our lives seem to me to be due to the same factors present in our government and government agencies.

"...insiders are compensated much more for making money than protecting it..."

This fits the Congressional-lobbyist-corporate financial connections perfectly.

These "public servants" and "protectors of stockholders' interests" have become our biggest risk.

Until we set about managing them — we are not going to rest easy or trust any system under their influence or control. You have called for investigations and removal in market agencies. We need the same in those who appoint and are supposed to oversee them.

If we do not manage this primary area of risk we will continue to have wars for profit, repetitive massive fraud and ultimately loss of our rights and freedom.

Something to keep an eye on . . . agriculture. DOYDD.

Bad recipe for corn: A late, wet harvest

http://www.jsonline.com/business/78832132.html

Rice: Si02 had a report at his site yesterday about the global rice situation.

http://tinyurl.com/y9utha2

Something to keep an eye on . . .

http://www.totalprosports.com/more/tigers-face-if-...... Hey, maybe I'll buy some Nike today... the club held up pretty well...!!

KO - Caylon Securities Initiates Coverage with a Buy. PT = $71

Bill,

Is there any chance they will nationalize the entire banking system?

Britain is a century ahead of the US and Canada in the push for government controls over the lives of citizens. Seems like a possibility to me, but then I see freedom evaporating everywhere I look these days.

We now have de facto gov/private banking here which is not too far removed.

Do they have a Goldman equivalent?

Grym -

"Do they have a Goldman equivalent?"

GS invented the credit default swap in a London office.

"Is there any chance they will nationalize the entire banking system?"

If the majority of your company's debt and stock are owned by the state, is that not a de facto nationalization? If so, the UK banks are now nationalized just like the insurance, auto manufacture, housing credit, gold and silver trade, NASDAQ, NYSE, COMEX, and, soon, healthcare have been or are about to be in the U.S.

Protecting profits here ... stopped out on that swing up to 1094 on the S&P. That may very well be a strong resistance level. We'll see.

I'm now looking for us to put in a lower high and for the momentum to reset on the 60 min charts.

???
You lost me here. I'm well aware of the dow/gold ratio but clueless about divisor. Would you care to explain?

Just wondering who is NEXT to FALL??? Any body's Guess??

http://english.aljazeera.net/news/middleeast/2009/...

http://www.marketwatch.com/story/dubai-stocks-off-...

From the Times on 6 December:
The great RBS exodus: 1,000 bankers quit over bonus row

http://tinyurl.com/yf53rrk

I dont think the UK government wanted to Nationalise the banks, I think they felt they had no choice or at least were advised by HB&B that they did not have a choice(emergency advice they paid for,I mean we paid for).

Re: "GS invented the credit default swap in a London office."

That is incorrect. The person credited with developing the credit default swap was Blythe Masters, a Brit, but she was working for J.P. Morgan. To my knowledge she never worked for Goldman. I think she was working out of Morgan's New York office when the CDS work was done.

I think I saw an article that stated she is currently working on development of carbon trading derivatives. With strong proponents like (formerly) Enron, and currently Goldman Sachs and J.P. Morgan I suspect the carbon trading system will be an effective replacement for debt securitization for wealth transfer from the middle class to the money masters.

http://www.guardian.co.uk/business/2008/sep/20/wal...

That is an interesting coincidence F57, "Carbon derivatives, the next CDS Scheme?": http://shockedinvestor.blogspot.com/2009/12/carbon... Some people are a little concerned with the use of derivatives for that purpose (it's a just a matter of who will fail with them, and be bailed out).

Re: coincidence

Yes,indeed! It looks like many of the news organizations are picking up on Blythe Masters the past few days, tied in to reporting on the Copenhagen summit. Here's a link to the article I was referring to, originating from Bloomberg.

Edit: took out TinyUrl broken link, found original Bloomberg article. I think it was Soros talking about how the system could (read "would") be gamed that caught my attention the most.
http://www.bloomberg.com/apps/news?pid=20601086&si...

bought some GIGM at $3.66. Not a big position but the stock itself is pretty oversold. The risk is they haven't issued q2 or q3 financials so there is a lot of uncertainty surrounding the company. But they do have $120 Million in net cash and the market cap is $190 Million. So unless they're losing tons of money I don't see too much downside risk...

EDIT:
Sold at $3.64...waiting for a better entry point...I have a feeling they will flush this one out.

Freedom, you might also consider another aspect of wealth transfer. Since the pollution caused by the cheap fossil fuels used today have a long term negative effect on the enviroment, won't the unborn be required to 'pay for' that effect. Isn't this a wealth transfer from the unborn to those of us living today? Or do you believe that fossil fuels are priced in a way that places their true costs on the current user? On the subject of wealth transfer, isn't it inherent in a capitalist system? If so, wouldn't we expect the 'money masters' or any business for that matter to try to earn a profit when it puts forth a product? Did the 'money masters' pay off all of the scientists in advance of their plan to steal money in this way? I hate greed, but isn't business there to take another person's money? The hope is that the buyer gets value. We have arrived at the legitimate question on climate change: will the buyer get value.

"With strong proponents like (formerly) Enron, and currently Goldman Sachs and J.P. Morgan I suspect the carbon trading system will be an effective replacement for debt securitization for wealth transfer from the middle class to the money masters."

VEM.V, one of Otto's favorites - market cap C$24M - just signed an exploration deal with Goldfields. For some reason, its already-deflated stock slid 6% on the news:

TORONTO, ONTARIO--(Marketwire - Dec. 9, 2009) - Vena Resources Inc. ("Vena" or the "Company") (TSX:VEM)(LIMA:VEM)(FRANKFURT:V1R) is pleased to announce that it has signed a definitive Joint venture agreement with Gold Fields, the third largest gold producer in the world, to create a new Peruvian company "NewCo" to jointly explore the Esquilache regional project 100% owned by Vena in southern Peru. "NewCo" rights will not include the historical San Antonio de Esquilache gold/silver mine that is currently undergoing a 3,000 meter drill program.

Under the terms of the joint venture, Gold Fields can earn an initial 51% interest in "NewCo" by spending US$1.5 million on exploration and maintenance within three years of the effective date of the joint venture agreement. Gold Fields can earn an additional 19% interest in "NewCo" by spending an additional US$3 million on exploration and maintenance within the subsequent three year period to bring its total interest to 70%. If Gold Fields does not complete the additional investment of US$3 million, its interest in "NewCo" will remain at 51%.

Further development of the project would be subject to normal straight line dilution clauses. Should either party dilute to below 15%, then it would exit with a 1% NSR. The "NewCo" owner would have the right to purchase one-half (or 0.5%) of this NSR interest for US$2 million.

FD: a larger than "chihuahua" position, DYODD

Check out this photo from Waimea Bay on the North Shore yesterday as the waves were in the 25 to 45 foot range. With respect to the photo (see attachment) I would say one guy is getting a ride of his life, two surfer's barely saved their behind's and two ocean participants are about to be crushed. Awesome photo shot.

Here is the article if interested.

http://www.honoluluadvertiser.com/article/20091209...

P.S. Kind of reminds you of the market the last two years, something for us all.

You raise some interesting points. I have a background in renewable resources technology and may have a somewhat different outlook than many on this site.

"Since the pollution caused by the cheap fossil fuels used today have a long term negative effect on the enviroment, won't the unborn be required to 'pay for' that effect. Isn't this a wealth transfer from the unborn to those of us living today?" Pollution and resource depletion comes in many forms, not just the burning of fossil fuels. We all pay for the mistakes made by our ancestors, and also profit from the beneficial decisions.

"Or do you believe that fossil fuels are priced in a way that places their true costs on the current user?" Absolutely not! Particularly in North America we have treated our resources as if they are free, or worth only the price of extraction plus suitable mark-up, even the non-renewable types. I think the Spindletop oil field had an ERoEI (energy return on energy invested) of about 100:1. Oil was so cheap that the Railroad Commission of Texas had to be created to control supply, and thereby world price. OPEC was a copy of this concept. Oil ERoEI is nowhere near 100:1 now, closer to 10:1. Some people who study the issue feel that societal collapse will occur when ERoEI reaches 5:1 to 7:1; at that point the system spends so much on obtaining energy that there is no surplus for growth as we know it.

"On the subject of wealth transfer, isn't it inherent in a capitalist system?" I would suggest not. My concept of capitalism is that the working class should be able to prosper from their labour as well as the suppliers of capital; neither should exploit the other.

"I hate greed, but isn't business there to take another person's money?" No. A business is there to provide goods or services in exchange for another persons money. There is a difference.

I view the climate science data on CO2 as highly irrelevant in the big picture. What is relevant is allocation of limited resources to an world population growing exponentially. Here are three things that have high correlation: population growth, energy consumption, increase in GDP. I view the last one as an artificial metric, essentially a derivative of the second (energy consumption). Nothing happens without energy input. Money doesn't "make the world go 'round"; energy does. Money is just a claim on someone else's future energy input; debt is someone else's claim on the debtor's future energy input.

As energy costs rise all the CO2 hoopla will be put aside. People will use whatever energy they can get, and emissions will not be viewed as important. The consumption of coal, and then wood will accelerate. Cooking with dried animal dung will make a big comeback. At some point the human population will decline to much reduced numbers, and with much less energy consumption. This will occur through the time-tested methods of war, famine, and disease. CO2 emission problem solved.

Some researchers estimate the true ultimate carrying capacity of humans on this wonderful world is between 10% to 30% of the current population. All that is sustaining the current level is cheap energy, predominantly hydrocarbons.

From my perspective we are not suffering an economic recession. What we have is one of the first tremors of the reality of competition for limited energy and other resources. Economists model it in economic terms, and we trade the price fluctuations in the markets. But I doubt that one in thousand would model it as an energy supply/allocation issue. In North America many of our lifestyle choices over the past century have developed under a regime of cheap energy and plentiful resources of all types. As energy expenses rose, we never adjusted our lifestyles to that reality. We just borrowed more from the future. To misquote Wimpy, "I'll gladly pay you Tuesday for a McMansion in the desert today."

I, like everyone else, would like a cleaner planet. The reality is that it cannot be done without a serious reduction in lifestyle for the majority of mankind. And that is a non-starter everywhere. It's known as the tragedy of the commons.

This one is a freak of nature. Not only it's inverted Cup and handle - it's a cup with two handles. Makes it only better as additional retests of the break point only increase the "force" of the setup - think of it as more at-support-buyers to get stopped when support is broken.

Annotations on the chart should be self-explanatory but don't hesitate to ask if they are not. Initial stop is above 110.70, break of 110.50 is a trigger.

Thanks so much Vad for that example. Wouldn't have occurred to me to look for that pattern but it is easy to understand the way you explained it. Does the same apply for longer intervals, such as the 10 year VLO chart? Looks like the handle is in the ballpark of a 4th or 5th test...

A buy limit order on GLD was hit for me this morning at $110. If GLD drops another 3%, then I will start thinking about scaling into DGP.

knifecatcher,

overall, chart patterns apply to any reasonable time frame. By reasonable I mean within meaningful holding cycles, so that certain price levels meant something for those who bought and sold at those prices. 10 years - sure; 100 - I seriously doubt it, 400 - no way. Patterns are created by people and reflect their emotions, memories, hopes and frustrations.

This particular one - I wouldn't call it Cup and handle per se since bounce is way too small to be qualified as a handle. It's it a breakdown pattern though, kind of descending triangle consolidation with support to break around 15 (as far as I can tell from the chart) and lower highs on bounces. One concern though is, this consolidation happens so close to lows... kind of hard to count on much entering this short. Also notice, the very last bounce and drop occur on reversing volume - it's higher on bounce and lower on retest of the low, unlike all previous. Kind of putting bears on alert here, maybe it's a reversal time.

David - Nice purchase. I actually just starting shorting GLL. This is the move I was looking for out of Gold.

Freedom 57,

"From my perspective we are not suffering an economic recession. What we have is one of the first tremors of the reality of competition for limited energy and other resources."

I agree this is becoming increasing problematic. I has probably always been a problem. But for hundreds of year it was solved by either taking those lands which added the needed resources — Nazi Germany and Japan did this resulting in WW2. For those less willing to kill (or only willing to kill small numbers) they could "Go west young man," or the equivalent in other countries.

Today we have a two-edged issue not enough commodities and less need for human labor compounding the issue.

Clearly for most of us in our limited life spans, commodities are a good long term buy.

Also clearly within our lifetimes the "too many people" issue will be a difficult problem physically and ethically. I see government health care control and rationing coming to us all.

Aldous Huxley and George Orwell nailed it some time ago. I wonder how their investment insights worked for them.

Only want to make valuable comments. not my opinions or drivel.

Prices stuck in a range. Bid under financials today. Not fantastic volume.

Seem today was about the dollar action. nothing more nothing less.

Great stuff Telestar3d I was reading about the event last night and it made me wish I was there. The biggest waves I ever saw at Waimea Bay, Pipeline etc was in the mid '80s and the ocean came as high as the Kam Highway, closing the road for a few days from erosion. Witnessing the surf come over da Big Rock was incredible and the spray so thick it was actually cool!

I think oil has rolled down enough to start selling in the money puts on it (so as to buy it even cheaper or pocket the premium). I just sold a couple of January $36 put options on USO at $1.82.

bought a little back at $4.61. I see that China's hog prices keep going up while FEED keeps going down. Something has to give.

Here is a question for the community. If one now views C as a long-term option would you buy those shares now or wait until after the so-called proposed offering that seems imminent?

This would be for say 2 to 4 year hold, which will be difficult for me but that would be the plan. Thanks in advance.

P.S. yvrapx, I'm glad you enjoyed that, it seemed too special not to share. Back in the early 80's I would boogie board there in 8 to 12 waves. You needed a mentality of banzai and suicidal tendencies. I often wondered how I ever survived.

i've been playing around with the screeners on ADVFN, they are much better than the FINVIZ or (defunct) microsoft offering.

besides EV / EBITDA , what other fundy/technical screens have other's used? what parameters have they used for EV/EBITDA?

from the research i've been doing recently, the best areas look like tech and healthcare.

Stuck in a descending channel. boring action.

Daily
http://twitpic.com/su6i7

15min
http://twitpic.com/su7mt

I am sure the same can be said with it's peers.

15min
http://twitpic.com/suawp/full

Daily
http://twitpic.com/suasw/full

I agree, this is a sneaky selling expected from these crocks who caused the worst financial crisis in history. By the way, I am still short on Financials and I believe the bear day will come sooner than any body thinks. One has to notice the strength in the US dollar, when market was correcting last Oct/2008, USD index went up from 72 to 88 in 3 months then down to 79 and back to close to 90 around March 9, 2009 then the slide in the US$ started until recently close to 74. I see the down trend has broken now to the UP direction and I don't see a reason why the previous history of the US dollar move during market turmoil won't repeat here again. Lets face it, all of us were wondering why GOLD stocks and POG didn't go way way up when every thing was crashing around us before March 9? Why investors and interventionists heavily bought the US dollar as a safe heaven instead of Gold?? I am sure many of you were scratching their head over this one, I know I did. It seems the only way for GOLD to stay up and go higher from here if we have an international currency crisis on our hands, not just with the US$ currency. We are all witnessing how the US$ reversed the down trend when interventionists from JAPAN started selling the YEN and the EURO weakened recently due to high debt, Dubai exposure and several downgrades of several European countries. I could be wrong but I think we will see people rushing again buying the US$ as a safe heaven in the next market correction that is long, long overdue. Your opinion is welcome. Not sure if you and Bill agree with me here? I know Jim Sinclair doesn't :))

analyst65,

OK, I agree Dubai is a big deal and looks like many were suckered there. I recently read that Germany, which has been the strongest EU economy, is heavily involved.

Just on thing bothers me about the Maund article...

If foreign buyers are fed up with the US Treasury Bond, why would they be interested in buying the US dollar? Both are paper substitutes for real value. Both are declining as a safe haven.

Why not simply go for the gold?

I see no logic to his assertions, only unbridled enthusiasm and hyperbole.

AIG paid back part of their TARP obligation by:

1. Selling two subsidiaries to the FED.

2. The Fed paid them for the subsidiaries

3. They gave the money the Fed gave them, back to the Fed.

Am I crazy.

ALOHA !!

Well, I was wondering when I would be able to report this ...

So the "official" USA unemployment rate went down to 10% yet over at the US Treasury Daily Statement Tuesday, 12/8, was the very first day that the Unemployment Benefit outlays line item went over $1BIL USD per day. It has been hinting at it for a years or so going to $800MIL here and there and even $960MIL I recall, but $1BIL per day has now been breached. On Tuesday it went over at $1.082BIL USD.

Two other line items are now filling in at the $500MIL per day levels. They are:

- Food & Nutrition Programs
- Health & Human Services

So we are looking at potentials for these three line items to turn into bigger outlays than ever before. These line items along with Medicare and Social Security are "riot insurance" for the US Congress and the TWO PARTY MONOPOLY, but instead of paying for their own insurance they tax us for it, so that essentially we are paying to guarantee that we don;t riot against the status quo that is robbing us blind with the aid of the MONEY MONOPOLY.

Add in Unemployment and we have three "welfare" line items for the US VOTERS. Certainly I doubt that Hank Paulson or Jamie Dimon or Ben Bernanke or Barney Frank are standing in any shelter lines or filling our applications for Food Stamps. They should be but they aren't! Its the "Un-American Way"!!

"Perhaps it's just easier for my subconscious to blame GS for everything now..."

That's OK. If they didn't actually do it I'm sure they regret having someone else think of it first and by now have hired him — with a big bonus in his hiring contract:-)

I think it gets even crazier when you realize that the Fed owns, what, 80% of AIG? So, basically, they paid themselves for something they already owned and then turned around and used some of the money to pay back to themselves some of the previous loans made to AIG. So basically it was another TARP-like injection into AIG? What follows is probably more interesting. Do they spin them off as IPO's gaining maximum return for shareholders (i.e. taxpayers)? Or do they sell them off at a ridiculous discount to ... I dunno, your guess is as good as mine...

The bulk if not all of the losses in precious metals since Friday has occurred during the NY markets. Coincidence only to the sheople. The banksters are terrified of gold being seen as a safe haven because the value of all currencies would be seen to have decreased. Therefore, gold must be knocked heavily to show the opposite. Of course, since the USD is the ultimate currency, it would be hurt the most. Hence the fanatical defense of the USD and relentless attacks on gold during times of stress.

The last rise in the dollar was rumored to have been caused by a coordinated action by the FED sending foreign central banks $600Billion to buy dollars which paralleled the panic asset selling to raise dollars to satisfy dollar denominated debt. Although the Treasury says they believe in a strong dollar.... its just one more myth in Obamaworld.
IMO... any rise in the dollar will be subdued and shorter term than the previous rally.

Gold demand:

China has about 250 million folks with assets in the $100,000-500,000 range. If each of those desire one ounce of gold now allowed under the new Chinese policy to encourage savings in gold, that equals 31.4 times Barrick's
estimated total production for 2010 of 8 million oz.

I believe supply side issues could cause gold to increase to unimaginable
levels in the next few years when gold enters the third phase of the bull market as global investors seek safe havens
against falling global fiat currencies. This end of the year correction may be the last chance buy gold at $1000-1100.

Mercedes and other German manufacturers outsource a few thousand jobs and plant investment to the US
due to a weak dollar. When Mercedes workers were informed that C-Class production would be sent to the US
they immediately walked off the job. Weak dollar helps prop US economy. See article from Der Spiegel

http://tinyurl.com/ybp9aes

I like this website as another tool in the shed.

here is a hotlink to currency action 5min
http://bit.ly/4Yj2Vk

Kaimu, you didn't give your reasons as why US$ was chosen as a safe heaven instead of Gold during last market crashes/corrections. If people where not rushing to buy US$ by converting their assets to pay their debt during credit shortages as normzyx explained then what was the reason in your opinion for the dollar to go up during last crisis times?? We all do realize that the US is sinking in debt due to the stupid FED's policy in prolonging the inevitable and allowing bad banks and financials to survive even with billions of dollars in bad assets still hidden in their books, out from their balance sheets and will never go away plus using tax payers money to save the same bad banks that cause the crisis in the first place. We understand the impact that this has done to the dollar but frankly as long as the US dollar remains the world reserve currency then others will continue to prefer buying the dollar during financial crisis instead of Gold in market turmoil. Like I said, in my opinion, the only way I see Gold continuing to go up to 1600, 2000 or even 3000, as many GOLD newsletters talk about, is if the whole world had a collapse of their currencies including the US$ and Gold became the only currency people trust and believe in its survival and worth. This will not be allowed to happen as we know how the markets and currencies these days are being manipulated and will continue to do so. If we were in a FREE Market where buyers and sellers are making the rules based on fundamentals reasons and honest investing then I would say yes Gold can continue to go up for many logical and fundamental reasons, however, this is not the case here and allowing gold to rise to outrageous levels will very likely be prevented perhaps in a similar manner to what Green Span did when he crushed the Gold bubble in early 80's. Keep in mind, when people go hungry in a world food crisis, climate disasters, wars,..etc, they can’t eat Gold even if they have it and won’t be able to sell if every one is fighting for food to survive. They need to eat food to survive, not gold. This is my opinion and feels free to reply...

Mokat,

Excellent article from Der Spiegel.

I interpret this latest (probably temporary) rise in $USD as a sign that the FED is losing control of interest rates. Not only the US, but ALL export-based economies are in a race to devalue their currencies to prop up exports. Notably Japan has recently indicated it would intervene to lower the Yen by selling US treasuries, thereby soaking up $USD. This is a shot across the bow to the FED that foreigners won't stand idle as the US debt is monetized.

Bill - excellent write up. I didn't get a chance to read it in full until know and I liked reading it with post market synopsis. Well done...couldn't have thought it better myself.

As for GS/AAPL - I saw the same thing this morning, which is why I was in GS. I knew they were going to defend this one.

Got some wood chopped today...looks to be rough out there. I sure hope the guys/gals at HB&B are listening to more than their I-pod...this could get interesting, and who said "time to stand up and be counted"?

Nite all.

... to be continued

I think its simpler than that.

Our accounts are in U.S. dollars, and since they are automatically put into money market accounts anytime we sell stocks, a panic out of stocks results in an equal panic into short term treasuries, resulting in a rising dollar and the idiotic zero or negative rates we see on them during market panics, and a falling dollar when the market rises as we take the money back out and put our money back into the markets.

I don't think this will change until we get to the point we are afraid to be in U.S. dollar cash overnight for fear of declines in the dollar.

Does this also mean we are all speculators anymore? Ie we now just invest in paper assets, rather than investing in building real businesses that produce things? If so, how big can that bubble of paper get before it too bursts.

Dr. Strangelove, I agree with your comments and I don't claim at all to defend the US dollar here or believe in its survival for long term either. All I am saying is that it was shocking to see traders/investors/central banks, ..etc rushing to buy the US$ during previous market turmoil and crisis times instead of buying GOLD and I kept wondering why? My conclusion was and remain the same that market and currencies are being manipulated big time and will continue to be that way so fundamentals have very small room here.

I know and have read a lot in previous news about other countries, OPEC, IMF, ...etc meeting and discussing what currency they should use to replace the US$ as the world reserve currency for yrs now. This is not new news but it seems that other countries have a great stake in keeping the US$ up as the reserve currency too and continue to peg their currency to it, at least for now. Will this change in the next few months or yrs? perhaps but ultimately the FEDS who crushed the Gold bubble in early 80's could very well continue to manipulate fundamentals again and do it again here even if they had to raise interest rates as their last resort and keep the country in a long, long recession. So far it seems others are doing the job for them though by selling their currencies and buying US treasuries or buying the dollar period.

Like I said, Gold can go much higher from here if all world currencies collapsed or went into crisis mode and we ended up in a big world financial and currency crisis but I don't see this happening at least not in the short term. This is why I feel the OVERSOLD US$ is likely to be manipulated again by different multiple forces to rise at least in the next short time from a possible death again. JMO

IMO, to end an economic downturn caused by a debt or credit bubble, I think it is needed is for the debt to get to reasonable levels or be wiped clean. I would theorize that might be part of why depressions seem to take so long to end (see Japan). That is why I see it as so unhealthy for the government to be backing all the obviously bad private debt, instead of letting it go worthless, like much of it really is. They are just prolonging the pain, and putting it on the backs of taxpayers, who don't deserve eternal debt slavery, or a Japan-like result.

"It's a stealth stimulus," says Christopher Thornberg of Beacon Economics, a consulting firm specializing in real estate and the California economy. "The quicker these people shed their debts, the faster the economy is going to heal and move forward again."

"So was it wise to run with the herd into US Treasuries in 2008? I made 32% in gold and around 90% in silver, even with recent corrections. What did you guys sitting in US Treasuries(US Debt) make?"

Actually I did quite well in Treasuries (WHOSX) last year. It took me from a 15% loss to even between 10-20-08 and 1-1-09.

Like anything else, as Bill says, "We are dealing with prices and time."

Edit: Granted, this year it is my gold which has been the best YTD.