Posts Tagged ‘US Dollar’

Long Term Market Success and Wealth Accumulation Requires Patience

Currently All Markets are in Flux.

(Except recent recommendation to buy the US Dollar)

We are waiting for large declines in Gold and Silver before adding to core positions.

We are waiting for a short term decline then a final advance in the current bear market rally in stocks.  This will give us a final opportunity to liquidate stocks before the next killer decline.

While we wait, meditate on these wise words from the most famous stock trader of all time – Jesse Livermore.

“Cash was, is, and always will be – king. Always have cash in reserve. Cash is the ammunition in your gun. My biggest mistake was not in following this rule more often. Time is not money because there may be times when your money should be inactive… Often money that is just sitting can be later moved into the right situation and make a fortune. Patience-Patience-Patience. Patience was the key to success – Don’t be in a hurry.” – Jesse Livermore. How To Trade In Stocks, 1940.

The inimitable Steve Briese of COT fame not only correctly identified the potential for a massive commodity collapse over a year ago but he is also the only analyst (in my humble opinion)  to have explained what really happened.  He laid it all out in his Barron’s article early last spring.

In his latest Bullish Review he indicates that while a buy signal has not been generated there has been a minor COT buy signal in the NYFE Dollar Index.   The Commercials (Insiders) have been accumulating (buying) dollars on this decline!   LET ME BE CLEAR – I use the Bullish Review as a key tool (Steve is brilliant) for determining asset allocation but neither Steve Briese nor the Bullish Review is responsible for my recommendations. As the dollar approaches the December 2008 low, a low risk buying opportunity will be available.  A stop loss could be placed just below the December 2008 low.

Yes I know that “everyone”  who is “anyone” thinks the dollar is on its last legs, may it RIP. 

And you dear reader thought I was a pessimist.  So, what does a contrarian do?  Look for an opportunity to buy the Buck on the cheap. 

Steve Briese identified the end of a 6 year dollar bear market in September 2008 (great call Steve) and the US Dollar will most likely climb its wall of worry for a couple of years now.  The enormous debt accumulated in dollars constitutes a massive historic short against the dollar.  That massive short position constitutes highly combustible fuel for a buying explosion.  The only fly in the ointment would be if Helicopter Ben’s dollar drop (QE – quantitative easing) and the  O’Bomba Bailouts and Stimulus ignites inflation and another fiat money boom (low risk at this time).  Our portfolios are still on deflation watch.  I am keeping an open mind though.

One of the more conservative ways (as apposed to Forex or Futures)  that I am recommending to my active clients is to buy iPath shares of UUP.

Dear reader DON’T TRY THIS AT HOME, get professional guidance in determining whether this fits into your portfolio and in properly placing an order with appropriate stop loss protection.  Proper money management is a must.

What Are All Those XXXX’s and OOOO’s on the Charts?

( No Dear Reader They Don’t Represent Hugs n Kisses! )

Several readers have indicated that they are not familiar with the point and figure charts that I use for illustration purposes in the blog.  John Murphy (world class technical analyst) provides an excellent overview of Point and Figure charting on his web site StockCharts.com.  If anyone is interested in why I use these “old fashioned” P and F charts drop a comment requesting additional information.

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.

Grok This First!

Don’t Invest Without Understanding This

Investment Wisdom Begins With…..

Understanding that we live in world dominated by one overwhelming investment reality – the entire world went on a FIAT Money Standard in 1971. Fiat money, besides being a tool of virtually invisible confiscation, inherently creates systemic risk and distorts our perception of what is happening in the world. This core reality informs all the asset allocation decisions that we will recommend to our clients and subscribers. Again, I beg that you read the prophetic words of the most eminent economist of the 20th century.

Read Very Carefully What Keynes is Telling Us

” Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they do not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. the sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their just deserts and even beyond their expectations or desires, become “profiteers,” who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.

Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”

John Maynard Keynes, C.B., The Economic Consequences of the Peace page 235.

How could this happen to us ???

With the drafting of the US Constitution, our founding fathers attempted to protect us from the devastating results of “rag money”. But unfortunately after decades of manipulation and disinformation, powerful banking and finanical interests won out. For one of the best explanations of HOW we lost sound money and what the founding fathers originally intended for us, read a short monetary history of the dollar by one of the most brilliant scholars I have ever had the pleasure of reading. Edwin Vieria, Jr., please take the stand. If you can ever get a copy of his magnum opus on the dollar “Pieces of Eight” lock it up. It is eighteen hundred pages of U.S. monetary scholarship that is breathtaking in it content.

Are you outraged now ? You should be ! ! !

Fiat money and the havoc it wrecks upon the investment world is the first and most important reality on our investment map. We will show you how deal with it.

The volatility created by a fiat monetary system can be protected against and used to accumulate wealth.

For a free initial half hour consultation email me at: michael@fibonaccifinancial.com