My video for UncommonWisdomDaily.com today is an interview I did at the World Money Show with Bob Archer, CEO of Great Panther Silver (symbol GPR on the TSX). Here’s a weekly chart of Great Panther …
You can see that Great Panther has pulled back with the price of precious metals. It broke a recent uptrend, but I’ve indicated a longer-term uptrend that is still holding. Meanwhile, the good news at Great Panther is piling up like silver ingots.
My premium service subscribers know that I expect the correction in gold and silver to continue for at least another couple weeks. That should keep pressure on gold and silver mining stocks. I’d be glad to be wrong. But when the rebound comes, Great Panther should make the most of it.
Phil from HoweStreet.com called today and wanted to know all about my new report, “The Golden Age of Green Energy.” So, we talked about that and gold and commodities in general …
A Did you see what’s happening in the Mid-Atlantic. It is snowing and people are freaking out, including the weatherman …
Meanwhile, supermarkets are jammed as shoppers empty aisles of food — milk, break, whatever they can find. And snow shovels, LOL.
Man, if only they’d checked out my book, The Ultimate Suburban Survivalist Guide, and prepared ahead of time. But I guess that would take the fun out of it for some people.
Seriously, good luck to everyone caught in that storm.
Every now and then it’s good to look at the big picture in the S&P 500 with monthly charts.
First, here’s the chart that many Wall Street analysts watch to get an idea of the S&P 500’s big trend.It’s a monthly chart with the 5- and 15-period moving averages.
You can see that the 5-month moving average crossed above the 15-month moving average back in September.The last time this happened – back in June of 2003 – it signaled the start of a big bull market.The time it happened before that, in 1994, it signaled – you guessed it – a big bull market.
How can the market be so bullish when our economy has so many problems?Part of it is the decline of the U.S. dollar – when the dollar goes lower, assets like stocks inflate in relative terms.Also, the government throwing money at banks, which then use that money to play the markets, doesn’t hurt either.
But now the U.S. dollar is rallying.I’ve explained my targets on where I think the dollar could go in the short term (over the next couple weeks to as long as a couple months – it’s hard to predict exactly how long).This should weigh on commodities and stocks.We are seeing this reflected in momentum weakness in the S&P 500. The RSI oscillator is stalled out at the 50 level, indicating indecision.
And there is always the potential that this pullback could be the start of something bigger.Let’s look at another monthly chart of the S&P 500 …
I’ve removed the moving averages and magnified the chart so you can clearly see that January was a bullish outside reversal – the bearish candlestick engulfs the previous bullish candlestick. This can indicate consolidation, or even the start of a steeper correction.
We are playing this in Red-Hot Commodity ETFs with some bearish positions.But that doesn’t change my longer-term view, which is bullish on commodities.In this way, the dollar rally/market pullback is a gift.Why?Because it will give us great entry points into commodities and commodity stocks and ETFs of all types.
I’m leaving for Orlando today to speak at the World Money Show. If you’re attending the Money Show, please stop by the Weiss Research booth and say hello, or you can catch my seminar on Friday.
In the last two weeks, more than 100 mostly tiny earthquakes a day, on average, have rattled a remote area of Yellowstone National Park in Wyoming, putting scientists who monitor the park’s strange and volatile geology on alert.
Researchers say that for now, the earthquake cluster, or swarm — the second-largest ever recorded in the park — is more a cause for curiosity than alarm. The quake zone, about 10 miles northwest of the Old Faithful geyser, has shown little indication, they said, of building toward a larger event, like a volcanic eruption of the type that last ravaged the Yellowstone region tens of thousands of years ago.
This bears watching. Even if these tiny earthquakes aren’t a sign of something bigger, they’re a good reminder to be prepared. Earthquakes usually strike without warning.
If you want to read the earthquake history of your state, here’s another good link. Click on your individual state for a treasure trove of earthquake facts.
·DROP to the ground; take COVER by getting under a sturdy table or other piece of furniture; and HOLD ON on until the shaking stops. If there isn’t a table or desk near you, cover your face and head with your arms and crouch in an inside corner of the building.
·Stay away from glass, windows, outside doors and walls, and anything that could fall, such as lighting fixtures or furniture.
·Stay in bed if you are there when the earthquake strikes. Hold on and protect your head with a pillow, unless you are under a heavy light fixture that could fall. In that case, move to the nearest safe place.
·Use a doorway for shelter only if it is in close proximity to you and if you know it is a strongly supported, loadbearing doorway.
·Stay inside until shaking stops and it is safe to go outside. Research has shown that most injuries occur when people inside buildings attempt to move to a different location inside the building or try to leave
But the best time to prepare for an earthquake is BEFORE it strikes.For starters, check out this Natural Disaster Guide from Consumer Reports.
When John King stopped making payments on his home in Coral Gables, Florida, two years ago, he assumed the foreclosure ended his mortgage contract, he said. Last month, a Miami-Dade County court gave collectors permission to pursue him for $44,000 stemming from the default.
King is among a rising number of borrowers who are learning that they can be on the hook for years after losing their homes.
In states such as Florida, courts give mortgage holders as long as five years to seek a deficiency judgment and, if granted, up to 20 years to collect. Usually, they have the option of renewing the judgment if it’s not paid off within 20 years.
In the case of foreclosure, lenders can pursue deficiencies in more than 30 states, including Florida, New York and Texas, according to the U.S. Foreclosure Network, an organization of mortgage law firms.
Some states, such as California, are “non-recourse” and don’t allow deficiency judgments. But, even there, if the original loan was refinanced, some or all of it may be subject to claims.
This problem is only going to get worse.American homes have lost a whopping $6.4 trillion (28%) from the value of U.S. residential real estate since the 2006 peak. About 21% of American homeowners owe more on their mortgages than their properties are worth, according to Zillow.com, and that percentage is rising.According to the New York Times, the number of Americans who owe more than their homes are now projected to climb to a peak of 5.1 million by June — about 10%of all Americans with mortgages.
As I explained in an earlier post, the GDP number released on Friday — boasting 5.7% growth — was a joke. Energy demand in the U.S. is going down. If economic activity were really rising, energy demand would be going up.
The lack of real economic growth in the U.S., along with a rising U.S. dollar, should push oil prices lower in the short term.
So we can all relax about oil prices, right?Wrong!
What’s more, for the first time in China’s history, more than half, or 51.8% to be exact, of China’s oil needs came from foreign sources.Here’s a shocker:Saudi Arabia is now exporting more oil to China than it is to the U.S.The Chinese have replaced us as the Saudis’ best customers.
So, global demand should continue to increase.And yet, one group that isn’t worried is the International Energy Agency.The IEA claims that that oil production will be ramped up from its current level of 85 million barrels per day to 105 million barrel per day by 2030.
New oil fields, generally smaller, are less productive than old ones - note the virtual freefall in production rates from the North Sea fields, which reached peak output in 2000. Another reason for the decline is development pace, or lack thereof.
Professor Kjell Aleklett, president of the Association for the Study of Peak Oil and Gas, used the same data as the IEA, but interpreted it another way. His group’s findings:production in 2030 will be about 76 million barrels a day. That’s about one-third less than the IEA’s figure, and 10 million barrels per day less than current production.
So, sure, demand in the U.S. is falling … for now.That will put short-term downward pressure on prices.This will probably also slow down development of new sources of oil. And that will all come back to bite us when global demand overtakes supply and prices soar again.
Bottom line:You are probably going to face a serious energy shortage in your lifetime.Make your preparations and adjustments now, or you’ll wish you had.
On Friday, the U.S. Department of Commerce released its preliminary 4th Quarter GDP calculation, which came in at a whopping 5.7% growth.
It almost certainly will be revised lower.I’ll remind you that 3rd quarter GDP started at 3.5% growth in its first estimate, only to be revised downward twice, to eventually settle at a 2.2% growth rate.From 3.5 to 2.2 — that’s a haircut of 37%!
The GDP number can be affected by many factors.What does the government credit with the big jump in growth?From the BEA:
The increase in real GDP in the fourth quarter primarily reflected positive contributions from private inventory investment, exports, and personal consumption expenditures (PCE).
The effect of inventory building account for almost 60% of the 5.7% reported growth rate.And I believe REAL growth in the REAL economy was much lower, for a simple reason:Total use of all kinds of petroleum and natural gas products dropped from an average 19.2 million barrels per day equivalentin the fourth quarter of 2008 to an average 18.8 million barrels per day equivalent in the fourth quarter of 2009.
How do you get economic growth without fuel consumption? Unless Americans are buying a heck of a lot of electric cars – and factories are running on rainbows and unicorn farts – you don’t.Only some of this could have come from increased efficiency and use of alternative fuel.The rest, well … it could be that somebody’s fudging some numbers somewhere.
What’s more, the real economy is almost certainly continuing to slow down. How do I know that? Right now,Americans are burning less gasoline than they did a year ago, according to a report this week from the Energy Information Administration. The EIA says the country’s appetite for petroleum products has dropped every week this month.The drop-off in gasoline usage is noticeably acute.
What’s more, the Daily Treasury Statement for the month through January 28 shows $132.8 billion in withholding taxes paid this year vs. $142.9 billion a year ago.That’s a decline of about 7%. So the miracle recovery is happening without an increase in energy OR payrolls.
So no, I don’t buy the government’s story on economic growth.In fact, I think the economy is declining and that decline is picking up momentum.
This decline doesn’t have to be the end of the world. In fact, it could be turned around by a second stimulus package that focuses on creating jobs. But President Obama had better get cracking if he wants to do that (with this administration, I’ve learned to judge by actions, not words).
The bigger question that Americans should be asking themselves:If the government is flat-out wrong about economic growth – something we can see right in front of us – what else could they be wrong/hiding about the economy?
Here’s an amazing story out of Zimbabwe. Zimbawe was once hailed as the breadbasket of Africa. Now, according to the video, the Zimbabwean people, once one of the best educated and most productive in Africa, have become a nation of gold panners and grub-stake miners. Why? Because Zimbabwe’s currency is worthless. To buy food, you need gold. According to the video, one-tenth of a gram of gold buys a loaf of bread.
The man who made this video is a political opponent of Zimbabwe’s strongman Mugabe. Certainly, some people there are suffering horribly. And Zimbabwe’s gold production rose 35% in 2009 while the rest of that country’s economy evaporated, so there’s obviously a lot of gold mining going on there.
