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3.25.2015 Financial Intelligence Report Bookmark

They’ve All Been Wrong

Over the course of human history there’ve been quite a few people that have called for the end of the world, the end of civilization, the end of humanity, you name it. Yet here we are on March 24 and the sun came up, folks ate breakfast and for the most part, life goes on.

Likewise there’s been no shortage of folks calling for all manner of doom and gloom over the years. I cannot count on both hands how many people have called for financial collapse, global financial Armageddon, and populations reduced to eating bugs in their front yards to survive. Yet this morning the traffic on Rt. 75here in Sarasota is horrendous as people flock to the beaches, the bars, the eateries and to work.

They’ve All Been Wrong

Over the course of human history there’ve been quite a few people that have called for the end of the world, the end of civilization, the end of humanity, you name it. Yet here we are on March 24 and the sun came up, folks ate breakfast and for the most part, life goes on.

Likewise there’s been no shortage of folks calling for all manner of doom and gloom over the years. I cannot count on both hands how many people have called for financial collapse, global financial Armageddon, and populations reduced to eating bugs in their front yards to survive. Yet this morning the traffic on Rt. 75here in Sarasota is horrendous as people flock to the beaches, the bars, the eateries and to work.

Like the boy that cried wolf, people have “heard it all before” and nothing untoward has happened.  So it comes as no surprise to me that when I  write about things such as hoarding some gold and silver for the “events” I think we’re going to witness; a lot of people shrug and say “yep, he’s nuts…another doom and gloomer”.  I get it. I really do.

Two weeks ago I wrote about the Shemitah and the seven year cycle. Last week I wrote about why Gold and Silver shouldn’t be dismissed as your “insurance policy” against dangerous events. Yet each article was responded to by quite a few folks who made it clear that my thinking was “ridiculous”.  

I’ve never called for the end of humanity. I’ve never called for the end of the world. I’ve never called for any of the more colorful examples of some form of Armaggedon. I have however read a lot of history, and one of the things that are glaringly evident is that “systems” do indeed perish. Monetary systems dissolve, military systems erode and even entire civilizations tend to “disappear”.

I find it very interesting that in at least 12 instances, huge civilizations that built tremendous “cities” were left to disintegrate. Why would a flourishing civilization, advanced for its time, suddenly cease to exist, its inhabitants gone and its architecture abandoned? Archeologists present theories but nothing ever gets proven.  We simply don’t know.  What we do know is that there are giant structures around the world, that obviously took tens of thousands of people to build, that stand quiet…abandoned.

Systems break down. Anyone that has ever used a computer has witnessed the “blue screen of death”. Anyone that has ever studied Rome or Greece knows that their systems failed.  Yet somehow as if mystically we tend to believe that our current system cannot fail.  Well I disagree with that. See, MAN made our current system and anything man makes can indeed “break”.

Our economic system is broke. This isn’t some pie in the sky, lunatic fringe, tin foil conspiracy theory. It’s fact. The IMF now states that there are One thousand Trillion worth of derivatives in play. Nation after nation is swallowed in more debt than can ever be repaid. Ever.  So let’s get down to some soul searching “nitty gritty” for a minute.
Just what exactly is it that I think we’re facing? Is humanity about to end its reign here on earth? Nope, not at all. While full scale nuclear war is always a remote possibility, I refuse to let myself “go there” in the hopes that a few rational people still exist on this planet.  But what I do see is the end of our current system of monetary policy. The framework of our fiat money, and endless debt.  And when it ends, it simply will NOT be pretty at first.

Now in the “long run” I think we come out the other side of our system collapse in a better place. I really do. It’s the short term that leads me to thinking that some mighty big hell can take place.  This is why you have NEVER, not once seen me tell you to run out into the country, build a bunker, and live like a “prepper”. However you have seen me write a dozen articles about armed self defense, home defense, disaster planning, food storage, water filtering etc. See, all I’m trying to suggest is that WHEN our monetary system ends, only to be replaced by another one, there’s going to be pain in the transition period.

Any type of “self help” article I write about survival, gold, food, etc is simply based on the concept of helping you all get through a nasty period. And here’s a cold fact that many of you might find to sound snarky, but let’s face reality… most of you have never known a truly bad day. I’m not talking about your blow dryer not working or your pants ripping on the way to work. I’m talking about having NO food for a week or no money in your pocket with no way to get any. I’m talking about turning on the faucet and nothing comes out. And nothing will come out for a month.

We’ve built an incredible system of infrastructure here in the states. And as long as everything is normal; your stores have food in them, your water flows, your bank cashes your checks, your electric service tirelessly powers your home, etc. But the fact is that a tremendous amount of things have to continue to work harmoniously for all this stuff to continue working. I lived through Hurricane Sandy. I saw first hand no water, no natural gas, no food, no electricity, no open banks.  Things get ugly quickly.

That was a storm. A big one no doubt but a storm none the less. It was “centralized” so to speak on the NorthEast Coast. 100 miles inland, it was a non event. But what happens if our financial system shuts down and it’s not contained to the Northeast coast but instead is nationwide? What happens if a run on derivatives shuts down a major bank and that ripples through the land, ultimately shutting down our financial system for a week?

Debts too big to ever be repaid, simply will not get paid. Make sense? Yep. So the only choices we have are 1) they continue for 100 years to print new debt to swallow the old debt and we live in a continuous make believe economy for ever, or 2) Something goes wrong like in 2008 and the system melts down on its own, or 3)the system gets a reboot.  I simply believe we’re going to witness the “reset”.

Each week I bring you the real news that doesn’t play on main stream media. It tends to line up with the idea of a reset. Is that conspiracy theory? Not at all. And if a reset is coming, and I think it is… then what happens and what do we do about it? That’s my goal here folks, to try and help…not stir up crazy fantasies.  

I am not Nostradamus. I have no magical power to predict the future. But if you assemble enough information, you can indeed make predictions based on probability. It was the amalgamation of information that led us to predict gold to 1K, the housing bubble and burst, and the credit bubble and burst of 2008.  Right now the information points to a global monetary reset.  If that’s correct and I think it is…am I to believe it all goes along seamlessly? No problems? Please.  See that’s the only fear here, the fear that as they try and implement a smooth transaction to debt restructuring and a new global currency, something goes awry. There’s a lot of things that could go wrong.

So please folks, spare me the spears and daggers. This system is broken beyond repair and will change. You might not be willing to accept that, but it won’t change things. A change is coming. I’m trying to help you navigate through it when it happens. Nothing more, nothing less.

Let me end with this.  The US was built on the idea of using gold and silver as its currency.  While the Constitution does NOT require money to be only gold and silver, there’s no question that for a couple hundred years, gold and silver were the “go to” item people wanted to have, not colonial paper money. Individual States were actually forbidden to coin anything but in gold and silver. Then in 1933 the US Government “made” everyone turn in their gold.  That’s right, they confiscated EVERYONES gold.

Executive Order 6102 is a United States presidential executive order signed on April 5, 1933, by President Franklin D. Roosevelt "forbidding the Hoarding of gold coin, gold bullion, and gold certificates within the continental United States". The order criminalized the possession of monetary gold by any individual, partnership, association or corporation.

To say this was a shock to the system is a gross understatement. Yet with the swipe of a pen, people were forced to turn over any and all gold that they might have been holding for years and years on end. Money handed down to them from their grandparents for safekeeping.  In return people were given paper money. This was an economic “reset” event folks.  So it is indeed evident that huge “resets” have happened in the past and it’s my belief that we’re about to witness another one.

That’s not doom and gloom, that’s simply preparing for an event that has happened before, and will happen again. Only this time because it will be more global in nature, there’s a lot more that can go wrong in the short term of it. So don’t roll your eyes and throw darts when I try and show you all the roads that are leading up to our present situation, think about it in the context that I’m trying to provide. “What do I do about it?”  is the question we try so hard to answer. So stay tuned.

The Market…

Monday they tried really hard to break the pattern but they couldn’t pull it off. What pattern? For the last month the S&P has not been able to put two back to back green days on the board, something that might be a record. ( I haven’t looked it up to see)

Early in the session the market was striving for higher and even by 1 pm the S&P was green on the day. But it rolled over and went red for the close. The pattern was intact.

Tuesday they tried again with a flurry higher in the morning that eventually faded off and we plunged for about 104 DOW points. So what was the problem? Why the herky-jerky market action?  

Two reasons. First is the fact that any time a market gets back to an "all-time" high level, that level serves as an overhead resistance. So as we get near that resistance, sellers sell. Shorts come in. It creates a battle line and you usually need some buying volume to push through.

Secondly we're in that mysterious "buy back blackout" period. The way the rules are written a company can announce a buy back, just like MRK did this morning as they announced a whopping ten BILLION dollar buy back. But in the five weeks ahead of its earnings report it cannot actually DO any physical purchase of its own stock. Considering that buy backs are the SINGLE biggest boost to this market, a lack of companies gobbling up their own stock leaves a major vacuum in the market, and there's no other buyers to fill the void.

Now you see why the market is struggling here. We've got an overhead resistance AND a serious lack of companies foregoing growth and expansion to do stock buy backs.

But Wednesday was a real washout. After starting the day a big soft, they tried to reverse things and for a while the S&P was slightly green. But around noon, the air came out and we saw this market drop for over 200 points by about 1:30 pm. Was it the big miss on Durable goods? Nah, the market doesn’t care about fundamentals. Was it more fear of a rate hike? Nah, the Fed heads were out talking about being patient again.

But what was an interesting coincidence was a ruling passed by the SEC wherein high frequency trading firms must join FINRA, meaning they will be subject to more regulation. Interesting is that the market rolled over just when that headline hit. Interesting.

In any event it was an ugly day on Wall Street for the bulls.  When the final bell rang we had lost 292 DOW points, 30 S&P points, and over a hundred NASDAQ points.  Even in this crazy market that’s a notable loss.

The DOW lost its 50 day moving average. The S&P lost its 50 day. The transports got smacked big time. The recent leaders like Biotech and semi-conductors got walloped. It was just ugly. Now the question is…is it over?

Today was the third red day in a row and it was quite a washout. There’s no reason to think that tomorrow we won’t just see a big bounce. In fact I expect it. But the problem is, as we’ve seen for a MONTH, we can’t get two green days back to back. So even if we put in a big fat green day tomorrow, it doesn’t mean we’re out of the woods.

Here at InvestYourself, we are completely flat, meaning we sold out our positions today. I wasn’t about to let profits go from nicely green to ugly red on us, so we took our positions off the table. Thus we head into tomorrow with no positions to fret over.  

If they’re going to bounce us tomorrow it might be wise to try ETF’s instead of individual stocks. That way you don’t have to try and find the “exact” stock to buy. Watch the SMH, IBB, SPY, DIA, and IYT.  Just don’t “marry” anything until this market proves it can bounce for more than a day. Have a great evening folks, we’ll see you all Sunday.

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