04/03/2012: GARY ON NATIONALLY SYNDICATED INVESTORS EDGE RADIO BROADCAST
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https://archives.warpradio.com/btr/InvestorsEdge/040318.mp3
JUST LETTING YOU KNOW
Gold…and Why There is No Way to Get the Crap Back in the Goose
Going back many, many months, I outlined for you that Gold was tracing out the 1970s…a major bull market. And then 1978 a bear market, where Gold prices actually dropped about 40% to 50%. But we were still way up off the lows which led to a final climactic move into, I believe, January of 1980.
And about a year ago, I told you I expected a bear market (I called it a “big washout”) before the final leg up because of the inflation that is coming ahead.
And you know why: The Fed and their maniacal, sickening debt and leverage laden policies which can paper over the problems now but only cause problems down the road. We already felt the brunt of Fed policy in 2008.
So I want to me a little bit repetitive here. There’s nothing to do right now. There’s nothing to think about right now. But Gold started its own bear market in August-September 2011. Interestingly enough, Gold price are only down 14% – 15% since then. Actually, I wouldn’t call that a bear market in price. But to be sure, it’s in a bearish phase, whatever you want to call it.
If we trace out the late 1970s, we are now in the 8th month since Gold’s high. The bearish phase in the late 1970s lasted 18 months. I can all but guarantee you that we’re not going to do it exactly right. And who knows, maybe the same won’t happen.
But as a lesson to you, most grand bull markets end in a gigantic, gargantuan move at the end. And in case you don’t know, the final move in Gold back in the 1970s went from 200 to 800 before the blink of an eye. So just be prepared. Be ready. We are not there. We are not even close. I want to continue to remind you that, I’m not saying that history is going to repeat. I’m saying, so far it has. And I’m not saying I’m going to catch it.
I’m saying I’m going to try to catch it. Because if you can catch climatic runs, you get some serious cheese, ladies and gentlemen.
Now…back on the Fed. Everything the Fed is doing is inflationary. Every move they make…every dollar they print…every bond they buy…is inflationary.
That is my take. And that would be the reason why we get that that big bout. Keep in mind, that it doesn’t take a genius to print and create out of thin air trillions of dollars to save your own legacy. But there is no way to get the crap back in the goose. The same goes for the debt. That the past two presidents have piled onto us. We couldn’t get a worse quinella than Bush-Bernanke and Bernanke-Obama, when it comes to the future of this country.
You don’t know it now because the market’s going up.
Well I jokingly said a year ago that Bernanke could just wake up one morning and say, “I’m buying up the whole S&P.”
Well, in a manner he is.
How are We Ever Going to Normalize This Maniacal, Insane Activity?
Guess what I have been talking about the past few weeks? The Bond Market. Guess what’s happening to the bond market, which means guess what’s happening to interest rates?
What the Fed has been doing is buying bond with fake money. You don’t believe me? Go ask Ben Bernanke. They physically make money out of thin air and buy the long-term bonds to bring yields down in order for people and businesses to have a lower cost of capital.
In 2011, the Fed purchased 61% of the total net Treasury issuance. 61%…we’re talking trillions. Let’s be clear about this. The Fed is not a business. They don’t have squat. It’s printed money. So the Fed is squashing the dollar and printing money. I don’t even know what to say. The subsidizing the U.S. Government spending and borrowing via the expansion of their balance sheet through the massive purchase of Treasury Bonds.
It keeps rates abnormally low.
It camouflages real problems.
The question again is: How are we ever going to normalize the maniacal, insane activity.
How are we ever going to normalize what Obama and Bush have done, using our money and spending it into oblivion where the next six years of our taxpayer dollars have already been spent by this miscreants.
Barack Obama is making George Bush look like a piker though.
And my big worry is that, if this guy gets another 4 years, unfettered, not worried about elections – WHAT NEXT?
I’m sure you don’t think this is serious do you?
After all, the economy’s getting better and the market’s up.
They said that in 2006 and 2007. And they had a chance to do something with what happened in 2008.
But instead…just more leverage and debt. And just remember. Every dime of that leverage and debt is our money. It’s our future earnings. That’s why they do it so uncaringly.
If it was their money, do you think they’d be doing this? Do you think they’d be giving Solyndra money if it were theirs? Or the rest of the crummy, screwed up Green companies, some of which don’t have any business being in business…and yet are getting billions of dollars in loans…GUARANTEED BY YOU AND ME?
Well, therein lies my long-term worries.
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Gary Kaltbaum owns Kaltbaum Capital Management, LLC (“KCM”), an investment adviser registered with the U.S. Securities and Exchange Commission. The opinions expressed herein are those of Mr. Kaltbaum and may not reflect those of KCM. The information offered in this publication is general information that does not take into account the individual circumstances, financial situation or individual needs of an investor. The information herein has been obtained from sources believed to be reliable, but we cannot assure its accuracy or completeness. Neither the information nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Any reference to past performance is not to be implied or construed as a guarantee of future results.