99.9%  SILVER COINS
Cannot Be Used in Everyday Exchange
BECAUSE they are TOO SOFT !
They are MEDALLIONS aka Collectors Items.

REAL “HARD” MONEY

For Hundreds of Years since around the late 1400s, the standard in Silver Coinage was set by the THALER (which the Brits & British Colonists called “Dollars”).  An excellent discussion of the renaissance of silver coin minting in Europe is Professor Antal Fekete’s article:

ARCHITECTURE FOR A NEW  WORLD FINANCIAL SYSTEM

To make Thalers hard enough for everyday exchange and use at regional Medieval Trade Fairs required that the silver be alloyed with enough copper.  The Thalers included approximately 7% copper. This Thaler Standard became THE standard (eg: even the Brits’ “Sterling” standard was close to the Thaler at 92.5% Silver and 7.5% Copper) for many centuries.  Then the Americans raised the bar in “Hardness” by adopting a 90% Silver and 10% Copper alloy standard in 1792.  To this day in the Silver Industry “Coin Metal” means a 90-10 alloy.  Below is a chart that amongst other things presents the Provenance of the US Dollar:

To understand what a US Dollar IS!, may I recommend the world expert on the subject – Dr. Edwin Vieira and his essay on the topic or his magnum opus Pieces of Eight.

When the US Federal Government Mint began minting gold and silver coins again in 1985 they knowingly minted coins that COULD NOT be used in every day exchange. Instead of following the US Coin standard (90-10 alloy) set by the Founding Fathers that had stayed the same from 1792 to 1964 they minted 99.9% pure medallions. All private mints fell right in line world wide. After all WHO wouldn’t want 99.9% pure coins? These coins are beautiful “Collectors Items” BUT they like the Dodo Bird will never fly high as mediums of exchange.

So what is a Silver Investor to do ?
Stay Tuned for More

But until then remember the Fibonacci Financial Mantra:
CAUTION:  There are a wide variety of ways to protect your assets and profit from the tidal changes taking place in the world economy ranging from the very conservative to the highly speculative.

But you need active professional guidance – Contact us at Fibonacci Financial.

Do not get the idea that you can trade or make investment decisions from our blog entries.  These blog entries are EDUCATIONAL  and are an introduction to our services and DO NOT constitute investment advice.

Don’t You Wish

that this was the

Equity Curve of YOUR 401K ?

Everything is going UP UP and Away!

Gold is Up, Silver is Up, Oil is Up, Stocks are Up.
What Next?

Listen to this Tech|Ticker interview with Bob Prechter
Titled: Yes, Robert Prechter Is Still Worried About Deflation

One of several markets we are watching to help answer

the Inflation vs Deflation Outcome

of the current financial crisis is Silver !

In addition to Silver, we are watching to see which way the Stock Market and the CRB index break (see Stock Market Head and Shoulders formation from last weeks blog entry).

But remember the following Fibonacci Financial Mantra :

There are a wide variety of ways to protect your assets and profit from this tidal change ranging from the very conservative to the highly speculative.

BUT you need active guidance – Contact Us at Fibonacci Financial.

Do not get the idea that you can trade or make investment decisions from our blog entries.  These are EDUCATIONAL and an introduction to our services and DO NOT constitute investment advice.

Dear Reader,

The Markets have been in a Holding Pattern since late last year.

That’s about to change DRAMATICALLY.

The Stock Market as exemplified by the Dow Jones Industrial Average  (aka: the D.J.I.A.) has been stuck in a trading range roughly between 10,000- and 11,000+.

For the last year the D.J.I.A. trading range market has been forming a potentially OMINOUS Head and Shoulders Top.  This is just a potential until the neck line is broken decisively!

Remember Summer School over a year ago when we first reviewed the Head and Shoulders Formation? If you need a refresher course,

Go here : http://www.fibonaccifinancial.com/financialwarroom/if-bonzo-is-buying-then-you-should-be-selling/

When this neck line in the D.J.I.A. is broken decisively,

I believe we will be entering  a very dangerous period of HYPER-DEFLATION.

The Federal Government’s Plunge Protection Team ( aka the PPT) have been very busy!  With the X-Ray vision provided by the COT (Commitment Of Traders) reports we can see that each time the D.J.I.A. is in danger of breaking down, the PPT  jumps in with tones of money and buys the market. If they loose this game (which I suspect they will a la King Canute) the breaking of the neck line will be even more ominous and meaningful. If all the Fed’s horses (fiat money) and all the Fed’s men (Ivy League Whiz Kids – full of hubris) can support the market – there’s a hard rain coming…..

This has real potential of making the Great Depression of the 1930s look like a dress rehearsal. For some interesting insight into the potential magnitude of this HyperDeflation buy The Great Wave by David Hackett Fisher and read the last chapter. (FYI David is not an economist but he is a Pulitzer Prize winning author/historian).

Go here to Amazon.com and buy it!

http://www.amazon.com/Great-Wave-Revolutions-Rhythm-History/dp/019512121X/ref=sr_1_1?s=books&ie=UTF8&qid=1283634769&sr=1-1

To sum up – It’s time to WAKE UP again. Go to Safety! Don’t wait till the D.J.I.A. breaks the Neck Line at approx. 9500

You may still have a couple of months (till after the election), a couple of weeks or only a couple of days !

DON’T WAIT –  ACT NOW !

Have You Missed My Posts ?

If you have missed my posts while I was on Sabbatical and want me to post more often again

- Please drop me a line.

Are Your Assets Allocated Properly ?

And REMEMBER

There are a wide variety of ways to protect your assets and profit from this tidal change ranging from the very conservative to the highly speculative.

BUT you need active guidance – Contact Us at Fibonacci Financial.

Do not get the idea that you can trade or make investment decisions from my blog entries.  These are EDUCATIONAL and an introduction to my services and DO NOT constitute investment advice.

Vindication ?

The Wall Street Journal

Announces

The Worst Decade For Stocks EVER!

“The U.S. stock market is wrapping up what is likely to be its worst decade ever.

In nearly 200 years of recorded stock-market history, no calendar decade has seen such a dismal performance as the 2000s.

Investors would have been better off investing in pretty much anything else, from bonds to gold or even just stuffing money under a mattress. Since the end of 1999, stocks traded on the New York Stock Exchange have lost an average of 0.5% a year thanks to the twin bear markets this decade.”  TOM LAURICELLA WSJ digital December 20,2009.

I started aggressively moving clients out of Stocks and into T-Bills during the 2000-2001 market blow-off and then again in late 2007.

This appeared foolish to my clients, family and friends many times during the last nine years.

But my evolving

Asset Allocation Model

has kept my client’s investments and retirement plan assets SAFE.

BUT NOW

“Danger Will Robinson, Danger!”

The Worst Is Yet To Come!

So Stay Tuned.

Remember Gentle Reader – the best strategy is still:

Go to Cash NOW = Run don’t Walk!

The Commercials have been selling the Stock Indexes for 3 weeks now.  There has been a normal Bear Market retracement of the first leg down in this Bear Market in percentage & Elliot Wave terms.  Now is the time to go to cash.  The next leg down in this Bear Market will be devastating.  The Dow Jones Industrial Average will most likely go well below 6500.

The COT readings in the precious metals and daily sentiment are at a bullish extremes also.  Better prices will be forth coming.  We will add to our core holdings at much lower prices.

Where should you put your cash?  Contact us for tactics.

AGAIN

There are a wide variety of ways to participate in this opportunity ranging from the very conservative to the highly speculative.

BUT you need active guidance – Contact Us at Fibonacci Financial.

Do not get the idea that you can trade or make investment decisions from my blog entries.  These are an introduction to my services and do not constitute investment advice.

Obamacare!

Executive Summary

1. Our current health insurance model massively violates the basic fundamentals of risk management.

2. This violation of prudent risk management concepts grossly enriches health insurance companies & greatly increases the cost of health care to all of us.

3. When you combine the violation of risk management principles with the bureaucratic red tape of medicare and medicaid the costs to society become outrageously expensive.

4. This is not the only reason that health care costs are out of control, but it is a primary reason.

Now the Proof

Risk Management 101

To understand why America’s health care costs are expensive and how to fix the current system you must first understand the fundamentals of risk management.

There are four fundamental choices when considering how to manage risk.

You can do the following:

1. Retain the Risk – You pay for it on a pay-as-you-go basis.

2. Reduce the Risk – Examine the nature of the risk and engage in actions that reduce the risk.

3. Transfer the Risk – Insurance -join with others who are exposed to the same risk and pool your resources to spread the risk out.

4. Avoid the Risk – Just don’t engage in activities of this nature!  Don’t jump of cliffs without parachutes.

Now let’s apply these risk management choices to Health Care Risks.

Let’s start by examing quadrant #1.  This quadrant includes health risks that don’t happen that often and don’t cost very much.  Timmy scrapes his knee when he falls off his bike.  What do we do? Run to the doctor? No, we wash his knee with hot soapy water, spray disinfectant on it, cover it with a bandaide then send him back out to play.  We Retain this risk and pay the small costs as we go.

Next let’s consider risks that fall into quadrant # 2.  This quadrant includes health risks that are relatively infrequent by also relatively expensive.  A good example is the risk of getting gall stones.  OOOOUUUCCCHH – OMG !  This, thank heavens, doesn’t happen to all of us and can be relatively expensive as well as tremendously painful.  Given it’s infrequency but expensive nature, it is an ideal candidate for pooling of risks through insurance.  Those actuaries are able to nail down the minimal shared expense of this health risk fairly easily.  This risk should be Transfered.   Another well recognized health risk in this category is death.  OK, I know we all die; so the frequency is rather high. .  But it does not make sense to insure against death at 98.  But for a young father who is 35 with family financial obligations it make a great deal of sense.  Can the actuaries estimate the frequency of death amongst 35 year old males.  Can this group insure against this health risk relatively inexpensively?  Yes.

Now the problem area.

Now let’s examine quadrant # 3.  These are the relative low cost but more frequent health risks.  They consist of risks such as strep throat and broken arms.  We can also throw in the ubiquitous maladies such as acid reflux and high blood pressure.  We should be retaining and managing these risks.  Because of their relatively high frequency and low cost , if they are run through a health insurance bureaucracy they become very expensive.  This is an area that we should self insure and manage.  The costs to administer these high frequency low cost events is very very high.  But the health insurance companies make bank off each of these transactions. This is equivalent to instituting grocery care insurance.  Imagine the cost!!!

Stupid!  Stupid!  Stupid!

So how did we begin to expose ourselves to this insane insurance industry money machine?

Well as all good economic stories begin – It started with the government interfering with our market choices.  During WWII the government froze wages.  Now businesses could no longer compete for talent by offering higher wages.  But they could offer benefits without restriction.  So they decided that instead of paying people more money they would straight out pay for health care costs through health insurance programs.  This was another story of the unintended consequences of inappropriate government intervention.  They should have also instituted grocery care insurance.  My goodness it costs thousands of dollars a year to eat, why don’t we have food insurance?  By including these risks in health insurance plans we also open a Pandora’s box of behavioral finance risks.  When we don’t pay directly for these frequent relatively low cost health risks, we tend to over use the health care system.  We also don’t have the immediacy of the cost to incent us to modify our poor health behaviours.

Now add into the third quadrant mix medicare and medicaid red tape and you have a health care cost disaster.

Insert Obamacare into Quadrant #3 ?

So, I ask you, is the way to solve two failed government interventions the institutionalization of these errors with a third massive government intervention called Obamacare?   The health “insurance” industry (and its lobbyists) is licking its fat fingers!

What we need to do is to return to sound risk management principles.

Get the Health Insurance Industry Out of Quadrant #3!

This will greatly reduce health care costs to all of us.

Properly understood and used HSA plans were a giant step in the right direction.

Recently I we reviewed the classic head and shoulders top formation.  The Dow had formed one and sucked a lot of analysts into recommending selling or shorts.  But we weren’t fooled because it never broke below the neckline by a decisive 3%.  What I also didn’t tell you though was that the Commercials had been buying!  I didn’t want to give away my hand. .

But we have been waiting months for this bear market rally to resolve.  We are getting closer.  As the Commercials unload their positions at the end of this rally, it will probably mark the last opportunity to sell stocks at reasonable prices for several years.  The decline from the top of this rally will be absolutely devastating to most investors.

Remember what I said in earlier blog posts – it will be hard to sell at the end of this bear market rally because all the talking heads and headlines will be positive about the Obama recovery etc. etc.  It is almost impossible to fight the herd!

AGAIN

There are a wide variety of ways to participate in this opportunity ranging from the very conservative to the highly speculative.

BUT you need active guidance – Contact Us at Fibonacci Financial.

Do not get the idea that you can trade or make investment decisions from my blog entries.  These are an introduction to my services and do not constitute investment advice.