12 December 2010

Trader Rog.

St. Gaudens double eagle ($20) first minted in 1907.
Gold and silver enthusiasts may be familiar with Roger Wiegand whose columns appear every few months at Kitco.com. Kitco publishes a variety of perspectives on the precious metals market — they also sell the stuff — ranging from bullish (gold though the roof) to bearish (it's got to come down). Wiegand falls into the former camp, in which regard, readers may find it interesting to compare his apocalyptic prognostications with the more measured predictions of Jon Nadler, Kitco's Senior Analyst. In brief, Wiegand preaches economic and political instability (you ain't seen nothing yet); Nadler, the fundamentals (diminishing Indian demand for gold jewelry, etc.), which he believes cannot in the long (medium? short?) term support current prices. Both gentlemen are far more knowledgeable about precious metals than your humble correspondent who can only observe that for the past couple of years, Wiegand has been more often right than wrong; Nadler, more often wrong than right. Eventually, of course, what goes up will come down. The questions are when and from what level. For gold, the answers range from "we've already seen the top," to "a lot higher."

Bearing in mind the uncertainties, we turn to "Trader Rog's" latest column, "Phase Two Of Greater Depression II Begins Now." Here are some tidbits (emphasis per the original).
"If you thought Lehman was fun get ready to see new price controls and acceleration of existing capital controls, with inflation that will knock your socks off. We have at least two to five more years of crash and burn in the financial markets before a new base is found.

Many of the very large global banks will be nationalized and some will fold into insolvency or merger. Roughly 90% of the derivatives and real estate toxic paper trash remains hidden on banker balance sheets. Not only was the problem never fixed, they’ve been piling on more bad loans-paper at a furious pace.

Corporate insiders, CEO’S, presidents, and other officers have been selling gobs of stock at a rate we last heard of as 1600 to 1. That’s 1600 shares sold for each one purchased. Mr. Ballmer, chief honcho at Microsoft is dumping well over $1 billion as we speak…that is only one example.

The next big government taking will be to steal the pension pools of national and international corporations. This is the last remaining honeypot for government theft and has already been practiced in South America.

Individuals holding pensions and government paper will wake-up one morning to find its all been seized and piled into 30-year USA bonds, which are sinking like the Titanic. There will be no buyers and no exits for those assets. The owners could get totally wiped out."

For retirees and those nearing retirement, the last is perhaps the most appalling. And it's been bruited about for some time. Something to think about as the year winds down.

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