Financial Views and Predictions for 2011 (sw)

 (I’m not a professional, these below are my trades, based on visions I’ve seen, please get proper advice if you want to make investments). 

Stocks:

Stocks and shares trade on a multiple of earnings, so if a stock has a price earning (PE) ratio of 15 it is priced on fifteen year’s earning, or stated another way, it is priced on the assumption it will earn the same money or more for 15 years.

Shares in the Internet company Salesforce.com Inc (CRM) trade at a PE of 231, which represents 231 years of today’s earning. It’s bubble-trouble. Looking at the PE ratio tells you how much blue sky is in a stock price. The average in a bull market is usually 15. 

Right now I wouldn’t buy stocks in anything unless you are fully hedged (insured) for a drop, which requires a derivatives trade like a put option that costs money, and most private investors don’t know much about derivatives.

In the visions-world I watch in trance, there are several catastrophic scenarios that may come to pass (See Annual Review Part Two here in the archives). Then there is the worry of a terrorist bomb in NY, which is bound to happen sooner or later as the Moslem fighters are becoming more savvy, they know if they can get New York they can seriously hurt the US.

The Dow has risen from 7,500 to 12,000 since the financial crisis started; there can’t be much further for it to go. Selling short (see ETFs below) hoping to profit from a drop is the only sensible trade, but it’s a timing play.

Bonds:

I don’t know anything about bonds but as interest rates go up bonds go down, so I soon became ‘not interested in interest’. Safer.

Currencies:

I saw a vision in which the dollar was at $3.60 to the Euro, it’s at 1.3600 right now and falling. With the Federal Reserve creating trillions of dollars of new money it will devalue the dollar. But in times of crisis people buy the dollar as a safe haven. While investors see the dollar as safe it can’t fall very much, but once they see the dollar is on its last legs it could tank quickly.

Euroland is in a huge mess because of debt, so the Euro is a difficult trade to the upside, shorting the Euro for now is likely to be profitable. Austerity measures in countries that are broke, Portugal, Greece, Italy, UK, Spain, Belgium and Iceland will lead to social unrest. As I said before insurrection is the new direction.

Other than the Swiss Franc (CHF), precious metals are the only safe currency (see below). I recommended CHFs some time ago when you had to pay 1.04 Swiss francs for a dollar, now you can get a dollar for .95 CHF, so that is a gain in the CHFs of 9%. Wait to buy it on the dips when it falls to par with the dollar.

 

Ireland is very broke—devastated really, by ego-trips, greed, irresponsible bankers and rotten leaders. Recently their central bank came up with the canny idea of secretly printing/creating a few billion Euros to help itself along. Imagine 26 counties in Euroland all secretly creating new Euros, the lure of free money titillates the corrupt, it’s addictive, so we could be awash with Euros quite soon. Awash = down.

The British pound (GBP) is quite strong, based on the false perception that the Government is tackling the deficit, which has fallen from £160 billion last year (2010) to ‘a hoped’ for £154 billion this year. They are not actually paying off any of the country’s debts, they are just borrowing £6 billion less this year. And the coalition may fall.

If the Labour party, who created the trillions of debt get back into power, then markets will freak out and the UK will go into replication, as they say in the Matrix film. The GBP would tank over night. 

The Yen is seen as a safe currency, it goes up in troubled times, but Japan’s economy, as a percentage, is the most heavily indebted country in the world with a deficit of 200% of GDP. And it has the highest percentage of old people, so its forward liability for pensions and health care are through the roof. Recently Japan was downgraded by Standard and Poor from triple AAA to AA-. This does not bode well for the sushi train, ya tekka maki roll is just about to fall off the plate coming round the corner.

All the currencies except the CHFs look dodgy, they are set to collapse; journalists talk about a ‘race to the bottom’ and that’s accurate in my view given a 1-3 years timeline, maybe sooner.

Commodities:

Soft commodities like sugar, wheat, soya beans, and rice will continue to rocket upwards. Saudi Arabia just doubled it’s wheat purchase, and Bangladesh upped their annual order from 200,000 tons to 800,000 tons. People are scared, countries are hoarding food.

In my Annual Review Part Two (see archives here) I made various predictions from visions and one was that food riots will become the norm. I recently bought enough food to feed 8-10 people for eight months, and I’m still buying. If you fancy soft commodities to go up then consider going long in the agricultural ETF—DBA.

Everyone says the non-precious hard commodities are a good buy: iron ore, coal, zinc, tin, copper, but there is a catch, if the economies tank because of a sudden and catastrophic fall in the financial market, or if the China bubble bursts, hard commodities will drop precipitously.

Oil:

When West Texas Crude (American oil) was at $92 a barrel, pundits said that $100 a barrel was not far away. It then dropped to $85 in just a week or so. Then a riot in Egypt saw it go back up. Predicting can be very dodgy. If the economies collapse it could fall to $50 or less, but if the Arab oil countries become unstable it could rocket to $120-150. The Moslem fighters will eventually figure it all out; they could easily hijack a ship in the Suez Canal and sink it, thereby blocking the main oil routes to Europe affecting Brent Crude (European oil).  

When the Moslem fighters wake to the power they have to create economic mayhem it will affect us all. It must be coming.

If you fancy oil “up” you might want to look at the oil ETF —USO, or HOU.TO on the Toronto exchange. 

Precious Metals:

Gold will keep rising, but it does have dips from time-to- time, and silver could well make $36 this year (it is $28-29 right now) and some say $80 next year, so long-term it’s a good ‘un’. The precious metals get a five-star rating. The more ‘funny money’ that gets printed/created, the better gold and silver will do. GLD and SLV are the two main precious metal ETFs.

(See: Jim Sinclair, the gold guru’s newsletter at http://jsmineset.com/. It’s free).

In Obama’s health care bill there is a strange clause that requires Americans from 2012 onwards to present their driver’s license and social security number when buying gold. What that has to do with health care is mysterious, buying in 2011 is best. Once the Gov’t knows where the money is they will find a way to take it from you. Roosevelt confiscated all the gold in America at $20.67 an ounce, it became illegal to own gold, then he plopped it all back on the market at $35 robbing people of billions. Handy-dandy, mucky stuff. 

Emerging Markets:

The emerging markets have gone up a lot as the Fed’s free money policy has had the effect of driving investors to take more risk and seek higher returns. They invested $95 billion last year. But the emerging markets are topping out, $7 billion came out this last week. People play those markets short through—EEV.

The Third World will collapse horribly, as and when the US starts to fall, and while these emerging markets might be a good bet short-term, in the long run it’s a wipe out in the making. Corruption really sets them back, they are too immature to run their countries properly without all the back-handers under the table.

China:

Investors love China, its economy is growing at 9%+ a year, but China has no Plan B. Its fate is linked to America. If you are betting on America to last then China is probably a good thing for a while, but eventually the China bubble will burst. 70% of their investments are in property, but 99% of Chinese people can’t afford to buy into the buildings being erected. There are entire ghost towns of brand new buildings that no one lives in.

It’s bound to collapse, maybe this year 2011. While the Dow in 2010 rocketed the Shanghai index fell 11%—tells ya something, chop suey—Louie? .

For a China short try—FXP, but it’s best as a short term trade. See ETF shorts explained next. 

Exchange Traded Funds (ETFs):

These funds are very popular and GLD the gold fund is the largest stock in the world. The short ETFs look good, but they can be a trap, I’ve lost a bit on them, they don’t always perform as they should.

FXP the Proshares Short China fund fell from $45 to $28 last year, while stocks in China fell as said, 11%. As it is a short fund it should have gone up to close to $55. It’s an ok short term day-to-day bet, but long term it’s a flop.

SRS the short real estate fund did the same, it fell from $45 to $17.50 when the underlying real estate index fell 50%. SRS  should be at $80-90. Dismal. 

Technology/ Internet Shares:

I never consider these stocks as I know very little about them. Their PE ratios are often stratospherically high, Google $600+ Amazon $136, Apple $346, these are disasters waiting to happen. Apple fell 8% in a day last week because the boss S. Jobs is unwell and he’s taking a sabbatical. Imagine losing 8% of your pension just because a man gets sick—scary stuff.

I predict the world will grow bored with technology as they will have more pressing problems to spend money on. And the Internet stocks are very vulnerable to more Government control, as well as a rupture of the ionosphere and sun bursts. The sun is not acting as normal, some astronomers are wondering if there is a second sun behind the one we can see affecting things. Most star system are binary, and so that is what has set off this conjecture on the second sun.

I find this very interesting, in a tune I wrote in 1998 called “The Song of the Innocents”, a children’s choir sing about a pole shift, they say, “Two suns high in the east, snake bites, Come Berenices, which is a constellation in the region of Leo. Odd, eh?

Internet:

The local broadband here where I am went down for 48 hours this weekend over a quite large area, twenty miles or so, because of a technical hitch at the phone company. It’s a warning. The systems are very frail. The Internet could end over night. If you are looking for an Internet ‘short’ consider Salesforce.com Inc (CRM) I mentioned above it is most over priced.  

Unemployment:

Austerity measure undertaken by Governments that have spent billions and trillions they don’t have, will dampen growth rates for decades to come. If you are in a job I’d advise you to hold on to it no matter how grim it might be for you (sorry), and begin to save as much as you can. Sell stuff, cash is vital, even small amounts of cash. I reckon it’s best if you have six months money under the mattress in hard cash.

Unemployment in the US is far higher than the official statistics show (see www.shadowstats.com), and it will get ever worse, true unemployment in the US is estimated by shadowstats.com to be about 25%, it was 30% in the Great Depression of the 1930s. Unemployment in the UK is going up very fast.

Real Estate:

Real estate prices are linked to interest rates and having power of having lots of people in well-paid employment, which is rare nowadays. Interest rates are going up, which is not good for property. I don’t believe the market in the US and the UK will ever recover, in the US it may fall another 10% this year. If you own a home sell, unless you absolutely need to keep it.

One million homes were repossessed in the US last year. Houses in Detroit are selling for $100. I don’t know about other markets, certainly property is sky rocketing in China, and places where Russian gangsters buy, like the South of France might be good, I don’t know.

If you own a home you are a sitting duck for governments that are desperate for money—they know where you and where your main asset is, you can’t flee in a hurry if conditions become adverse. People in Europe that lost their houses in the Second World War are still fighting the system to get them back.

Would you put your entire life’s saving in a sitting duck? Do not under any circumstances believe the official government spiel and the TV news, and don’t ever think the government will treat you fairly. The officials are fighting to survive, they’ll steal as much as they can from citizens and it can only get worse.

Recently, the Irish government took all the civil service’s pension pool, many billions, and lent it to the two main basket case banks that are still standing, Allied Irish and the Bank of Ireland. The Bank of Ireland shares used t0 be Euro 18.00+, they are 33 cents today, and they have people’s pension money. Eek!   

On the housing front: Protect yourself from a quack-attack, rent.

America

The US owes $14 trillion and it has another further $41 trillion in other debts, and its forward liabilities are $112 trillion. When they collapse under the weight of this debt the end of the financial world will be nigh. They are making no effort to reduce spending, it’s too politically uncomfortable. Here again is the link to the debt clock, its staggering.

http://usdebtclock.org/

If you watch the box in the center that says US Total Debt you’ll notice it takes just 26 seconds for it to go up by one more million.

The idea that America will trade its way out of trouble is silly. Even the system of printing/creating new dollars can’t cope with the level of debt. If they printed all the dollars they need to cover the debt the dollar would collapse. Strange world; interesting evolutionary experience, I reckon.

Bloomberg’s reported that the Federal Reserve has created nine trillion new dollars since September 2010. Where that money went is a secret. The Federal Reserve is a private company it is not required to tell the American people, or the Congress what it does. Bernanke can give a trillion dollars to his ol’ Yiddisha granny that has the fruit and veg’ stand down at the Peckham market if he wants, it’s all legal and yet bent, and dangerous—too much power, too much corruption.

Writers like David Icke talk about the world being controlled by a secret society he calls the Illuminati, but there isn’t any Illuminati, it’s a red herring. The world is owned and controlled in secret by the Federal Reserve and some very powerful Jews—in association with a couple of thousand families some of which are not Jewish.

The Jews control America, the dollar, and interest rates, and Wall Street, and all the bonds, stocks and shares that go with the shebang—and then they own the politicians, the Congress men and women, Senators, the White House personal, the President, Royalty, European heads of states, as well as computer manufacturing, food distribution, booze, and 98% of the American media is owned or controlled by them—then, diamonds, Hollywood, book publishing, TV networks, music and on…

….and they probably own the stands at the ol’ Peckham market, who knows? And what you pay for a bag of tomatoes, or two ears of sweet corn for your supper tonight is influenced to the upside pricewise by the Reserve, who indirectly are the supreme controllers of the world.

They don’t care if the poor and the working classes of the world struggle and are in despair, and the price of onions doubles in India. They create great fear in people, but they are just there for themselves and those close. It’s all about money: millions, billions, trillions, squillions, stuff it in ya ear!—blow it out ya tubes!—rattle ya’ bling, bling! Gorge ya face on endless money that you don’t need. It’s a form of demonic possession the insanity of money-itis.

But in the end we have to accept it, if it were not them it would be some other overlords, thousands of years ago it was the Messy-Potanians, then the Pharos, then Rome, it’s our karma to be subjected and mistreated.

The earth plane is a penal colony for fallen souls, like us. So we have to work to provide for ourselves and our families in a system that does not care for us or love us, that does not acknowledge our input or value, and all that so the country might pay the money lenders and controllers and those who would syrup the last drop of blood from our soul. 

We have to accept our karma. Never struggle against it, if you are very calm and soft ya karma changes and melts away—if you struggle and get angry it binds you, as its prisoner. Legend says, in the end a force of good will come to set the people free. I’ve always held faith in that promise.

Conspiracy theorists talk about a Zionist plot to control the world, but all that seems a bit dippy to me—paranoia politics, the Zionists don’t need a plot to control the world, they already control it anyway. Tee hee, enough already why argue?  

So, render unto the Reserve what is the Reserve’s, and walk away with a song in your heart. That’s what ya man Jesus said. In his time it was the Caesars that controlled everything. In ten thousand years from now it may be some obscure tribe of reindeer herdsmen from Norway that control the world, everything is possible. The Reserve collapses in the end embalmed in its cruelty—the money they worshiped became worthless almost overnight.

“Fate is not without a sense of irony,” as Morpheus said in the Matrix film.

This business of power, control and corruption is endemic to the human conditions, it’s part of our collective shadow-soul that we all have to evolve through without rancor or anger, it will always be there. Lust for power is a human thing it does not exist in the natural world. And spirituality is the act of becoming ever more soft and natural. 

Where is Safe?

I don’t mean to be glib but ‘safe’ is in your heart only you know what feels safe to you. But away from cities by at least 50 miles is soon to be a ‘must’, and having a very low expenditure is vital, you have to become happy with simple pleasures and more Zen living conditions. Once you don’t need things you become more free.

Etherically you have to have a golden energy and that only comes with softness and true kindness, that is why I recommend people become kind like never before—a deep compassion for nature, animals and humans helps you make the right moves and stay safe. 

Ireland is broke but it is safer than most places as the people have a heart. Remote parts of Scotland are good. BC Canada is excellent especially the hinterland and the islands. Remote parts of the US are OK, Oregon, Washington state, but there are 400 million guns and 300 million people in the US, so everywhere could be a worry.

Australia, outside of the cities could be fine, but make sure there is water, right now the floods give the impression there will always be lots of water, but Australia has just come out of a ten-year drought. Long term Australia is a rain-free zone.

And there must be remote places in Europe in the French and Spanish mountains that are good, and of course, Switzerland is very safe because while the crisis may cause high unemployment, it wont be caught up in the financial turmoil.

Summary:

I’m going long on oil for the next few months, I am 100%, no shadow of a doubt, I’m expecting a crisis, and I’m long on silver and gold, I mostly have coins which are over 50% of my portfolio. I sometimes short the S&P via QID, and the financial shorts FAZ, and I’ve got a few small shorts in various basket cases like the Italian Borsa, and Spain. I’m short the Euro at 1.3660 and I was long CHFs but I sold at a profit, it’s .95 right now. I would wait for it to fall back to par or near par with the dollar before you buy.

Sometimes when the CHF gets very strong the Swiss Government devalues its currency to protect its exports, this may happen again as the high CHF is creating a crisis in Switzerland, there is some chatter about ‘emergency measures’—read, devaluation.

I was long China but I sold out as interest rates rose there recently—I’m considering shorting the China exchange with FXP, it might be a good short term play as well as shorting emerging markets EEV.

I’m not a financial advisor so please don’t make any trades based on my advice - seek proper help. I’ve just written out what I’ve done and while my trades have been successful in recent months they could easily tank and go the other way.

The Overall Feeling:

The markets are in denial, it’s all held up with funny money, while the Federal Reserve is pumping the American dream with trillions, it is not allowed to change or die. It’s an ego-trip of self-importance and self-interest. But the extraordinary flow of phony money will eventually collapse everything.

The political-ego can’t admit to failure, no matter how much pain is inflicted on ordinary Americans day-to-day. Forty-two million are on food stamps. Holding up Wall Street and the banks is more important than fixing the debt and helping people. The debt mess is sadly landed at the door of the innocent workers of the world in higher taxes, lower benefits, and more uncertainty and inflation. As said, the fear level spikes up.

The cartel feeds itself to profit the institutions it often owns, so quantitative easing (QE) it is all about them, but the weight of circumstances will bring them down, meanwhile you can follow the stock market up but it’s a risk. If the subsequent food riots take a global hold then all the QE in the world won’t work. I saw a vision two weeks ago and the Dow had fallen 800 points in one day. All the charts of the current frenzy looks like pre-1929. 

The trick is to know exactly when to leave the casino, if you don’t you are almost bound to lose. I made quite a handy sum on Blackjack by counting cards, but the rules changed, they shortened the odds, and bought in machines that shuffle every hand, I never went back, stocks are the same, you have to know when to fold ‘em and when to walk away.

No one knows when the collapse will come, maybe it’s April fools day 2011, or maybe December 23^rd 2012, and the Mayans saw the collapse of the financial world not the end of the planet, funny idea eh?

You need warmth, people, animals, nature—and distance from large centers of population, and a few gold coins, and of course you need a song in your heart—sweet freedom’s kiss and liberty’s bliss. (sw)

Sweet Freedom’s Kiss