Dow down 300 points.
Gold down $71.00 an ounce.
Silver down $1.65 and ounce.

At 1400 hrs CST..

Everybody's blaming Bernake for his comments yesterday. Personally, I couldn't figure out what drove the market so high in the first place.

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Pace

The traders - from the pit to the high glass offices all want action. Up down they don't care so long as they are on the right side of the action!

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Dennis
SWCA #2409, SWHF #353

Computers automatically do the trading, and they are set to trade based on algorithims, and they do it in such fractions of a second and quantities of trades that it's mind boggling.

Also, since they've allowed "paper gold" into the market, that's messed it up too. Well, really, it's been messed up since 1933.

I just wish I could deal in...

Uh oh! I had an idea!!!

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Lost it all in a boat accident

I just checked and my 22LR ammo seems to be holding value so the family fortune is secure.

Bernake and his easy money policy. Also with interest at close to zero, the "market" was the only game in town. I took half of my IRA out of stocks about 2-3 weeks ago. I think an awful lot of folks felt as I did that the market was due for a correction and once they see the market going down they jump on the "sell" bandwagon. Actually, now would probably be a good time for me to call my advisor and get back into the market. I think the "easy money" is still there and there is still nowhere else to go to get any kind of return. I don't see Bernake stopping his policy of printing money anytime soon (0-18 months).

If you bought gold at or near $1600/oz you are probably ready to cut your wrists. Gold=$1280.86

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Luke 22:36

I see at the moment I am down $5,000.00s Brother, can you spare a dime?

The market made a dive several years ago and made a rebound, but Glad I invested in lead, powder, and copper jackets. Too bad the tsunami got it.

Looks like now is a good time to buy.

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Regards,
Guy-Harold Smith II

This evening I’m going to invest lead in the back stop. Could there be a better investment?

Exactly correct. Monetary policy is/was driving the stock market. Throw $85 billion/month at anything and I can guarantee the price will rise.

All this talk of "tapering" is BS, as the Fed essentially has few options at this point.

1. Keep monetizing/printing and hope that the public doesn't get antsy and increase the velocity of money in the system beyond normal levels.

2. "Taper" off monetizing/printing and watch the entire economy crater before your eyes.

3. Try and reduce your balance sheet by repackaging the MBS's and other questionable securities that you've been buying, rate them AAA, and sell them forward to retirement funds and institutionals, thus allowing for more balance sheet expansion.

The first option sets you up for hyperinflation, especially when the monetary base or narrow money has been expanded to over $10 Trillion FRN$'s.

The second option brings outright default into the picture, as the Fed is currently buying almost 78% of Treasury issue now, and keeping the coupon rate at a reasonable level. Trying to get the investing public or foreign entities to buy them would likely entail an increase in the coupon, and at our current level of debt, every basis point increase in the coupon adds $1.7 billion in debt service to the Federal budget.

The third option will work for awhile, until the institutions try and sell the bonds and get $.10 on the dollar as the underlying "assets" are impaired or not worth as much as they were claimed to be worth.

None of these are rosy options, and all but number 2 may kick the can down the road for a few more months to a couple of years, but eventually, the piper must be paid, and will be, but the bill will be exponentially higher.

IRT the gold/silver markets and the current dump in "prices", keep in mind that the Fed is using the bullion banks-who are also their Primary dealers-to keep a lid on the PM's, and try and turn the public into either bonds or equities v. metals. The Exchange Stabilization Fund and the Federal Reserve Bank of NY are two of the major players in this bit of manipulation, supplying the bullion banks with the goods and cover to make their play. Given the increase in the base money supply and the increasing amount of liquidity in the system worldwide, the metals should be screaming higher, and would be if not for the intervention of the Fed and the Treasury.

If you bought physical metals at any point in the last ten years, do not sell, as it's your only protection against what is coming. If you don't have any, then now is a great time to take a position. Physical metal in your possession is the best financial insurance plan available. No counterparty risk, outside the banking system, and holds purchasing power through time. I place my trust in the 5000 year history of gold/silver being used as money, as opposed to the promises of politicians and the charity of banksters.

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ΜΟΛΩΝ ΛΑΒΕ

A few years back GE hit around $6/shr. I bought a thousand. Pfizer was $11.50, I bought a thousand. Sold both around $20 about a year later. I'll get back in at those prices, not before. Hopefully this will be the last financial disaster in my lifetime, I'm getting too old for this.... The market was down today because Uncle Ben said "We might need to slow down the printing presses at some (nebulous) future date."Joe

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Wisdom chases me; I'm faster

Mostly Bernanke has been buying up bonds by the billions of dollars. Guess he plans on stopping that little exercise.

We were overdue for a "correction"...........hope your sold yesterday!!

Some investors are moving to stocks that pay dividends. That may be a way to go if you have anything to invest.

I am in Real Estate. I have 2 houses rented and I am rehabbing an Appalachian square log cabin. I also own my house. (4 total). I figure that I can lock in interest at 4% and when the fertilizer hits the fan I will pay it back with inflated dollars. Also with real estate you can stretch your budget. A quarter million dollars will get you a million dollars worth of property. One problem is If I rent a house for $14400/ year and pay $10000/yr in payments, I have to pay taxes on $9400/yr (the rest is interest and not taxable). Also, renting is not for everyone. I find if you rent property for $800/mo in this area you have to watch out for deadbeats. Higher rent gets you better renters.

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Luke 22:36

That might work unless the law is changed, as it was in the Weimar Hyperinflation, where the banks were allowed to increase the interest rates-even on fixed rate mortgages-to ensure that they didn't take a loss on their "investment". Remember, contract law is dead in this country, and the banksters own Washington.

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ΜΟΛΩΝ ΛΑΒΕ

Gold and silver are normally counter-cyclical. However, since the Fed has been engaged in the QE program, they've been moving with the market. We're seeing the effects of the later stages of credit expansion. When the Fed started QE, or increasing the money supply, the large institutions got in on the ground floor with the quantity of money at low rates, at their disposal. That supply is now lower, causing an upward movement in interest rates, which probably won't turn down again in the foreseeable future.

Just last year, the economy remained in the tank, since there was a high money supply, and few takers, even at low rates. There were few businesses with access to capital, which were anxious to jump out in the market and get into debt, either long or short term.

The manufacturing sectors are not hiring in great numbers, and there's little desire for banks to get into the MBS market, which they know will lead to another market slide.

The Austrian School economists have been forecasting this phenomena for years, and they've been spot on.

Friend, you sure said a mouthful. Couldn't agree more.

300 points is no correction. 3000 points is a correction.

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Wayne
Torn & Frayed

Well you could invest in tax free municipal bonds. I hear Detroit has a really good return (NOT!)

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Luke 22:36

The stock market is a big casino as is every other form of investment.

And the house ALWAYS wins. Joe

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Wisdom chases me; I'm faster

Gold and silver has not been used as money in this country for over a generation. Might not work in a daily trading situation.

Actually I know several people that felt it prudent to invest in silver coins. One once told me in a SHTF situation "if it takes a silver quarter to buy a loaf of bread, I will have the quarter."

I am not in precious metals (not counting gold watches), but if I was, I would want the gold in small coins that I could trade for things I need. Owning gold on paper doesn't do it for me.

It is actually a couple generations since gold coins were in circulation. Franklin Roosevelt had laws passed outlawing private ownership of gold, then the government bought it for $35/oz and immediately he took us off the gold standard. IMHO this was thievery.

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Luke 22:36

Silver coins maybe but I'm not sure enough people have handled $5 gold coins that they would feel confident they were real. That would reduce the barter value considerably. Assuming there is not a repeat of 1934.

The biggest hit I ever took was buying silver about in 1981 just before the hunt brothers collapsed the silver speculation. Over $14,000 1980 hard earned dollars went bye bye at probley the most significant time of my life when I needed it the most as I also had just bought a house and was getting married with a new baby. I had earned ever cent of that money liveing at work with no days off at about 65 hours a week at night watchmans wages. Its a wonder I am still not wearing a barrel! I lost it buying on margin.
On the other hand, in the years since I have hit it big with several stocks I bought cheap within my ira`s and 401K. Or, have I? I still have the stocks and havent cashed them in. Bought qual com for a couple bucks back in the early 70s, rode it all the way up to around $250s, and back down to whatever it is today, about $60s I think. Its all still just paper untill I cash it in.
The rules keep changing as you age. Now that I have hit the manditory age where you have to draw out of your 401Ks and ira`s it also forces you to sell if the market happens to be down. If you were to take out say $10,000s and didnt, you are automaticly fined half of what you didnt take out and should have. And-----you have to pay taxs on that half that you were fined and never got! You darn sure better know the rules when you hit 70 1/2 years old!
Where I really went wrong many years ago was either renting or when I finaly did buy a house, was buying the cheapest house I could stand to live in. I remember seeing other guys with my same job and wages get $90,000 houses while I thought I was being more respondsable buying a $12,000 shack. Their`s went up to $250,000 and I gave mine away. In other words, I have no words of wisdom here. Good luck to you all.

Another term for that is gambling.

Actually, there was reportedly a lot of this going on in 1929. When the market went south and the margin calls went out the fertilizer hit the fan.

There is a lot of things to be aware of with 401K and IRA's. I was told I would be paying at a lower rate and I doubt that I am. Also my social Security wouldn't be taxable if I didn't take money out of my IRA, Since I do, I have to also pay tax on my Social Security. It seems like double taxation to me.

In 2001 when the market went south I lost thousands on paper. Of course I lost the most in my divorce. I probably paid $50,000 in lawyer costs alone!

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Luke 22:36

If you drive to prayer meeting you are gambling a drunk doesnt T-bone you on the way. Name me a thing in life that isnt a gamble one way or another to some degree. I didnt know the kink about te double social security tax though, thanks for that. I dont do my own taxs, have my accountant handle it all. I did know this year was the hardest I seemed to have got hit. Now have to prepay estimated tax to both state and fed, and thats with me being retired. Its a self building consumeing fire. I had to take extra money out of the ira`s to pay it, that in turn raises my "income" for more taxs. Now I dont begrudge paying my fair share whatever that is but I dont like seeing my money being thrown away and the IRS haveing a unGodly budget partying and line dancing on it.
Lockheed besides haveing a 401K plan also had a basic benifit plan that even if you contributed nothing, the company put in 2o dollars a quarter, whopping $80s a year.
We could have it put in a bond fund, or a mutual fund of some kind they had. I hired in 1965. A friend hired in the same time about 25 or 30 years later we compared each others. He was very conservitive and picked the savings bonds fund. I went for the risky mutual fund. I cant remember the actual amounts anymore but we both surprised to find I had something like 4X what he had. Over time I still belive the market is far better than bonds. Of course if you spend time watching things and moveing them around its likely you can do better.

This. Those in the Stock Market has been relying on Bernanke to prop up their house of cards while they make money and run. He has signaled an end to this so in the medium term the market will go down. However, don't confuse the stock market with the real economy. The former is a flaky construct that will do ANYTHING to get your money only to kick you in the teeth and the latter is a slow lumbering thing that will slowly improve, but not at a rate that satisfies the ME, NOW!! generation.

Buying opportunity!!! In the long term, you'll make money. You lose if you panic and sell. If you bought mutual funds in 2009, you've at least doubled your money, even after this week.

My pain works the other way. My Dad suggested I buy gold when I first came to the US. It was under $300/oz at the time.

I can remember panning for gold back when I was a kid and getting $32.00 an ounce.

Good advice!

Think I'll pick up another 3 1/2 Model 27. They never seem to drop in price...

People will learn the value of things priced in metals if they have to, and value will be determined by what the market will bear dependent upon supply/demand, regardless of what the paper price is. Some things are easy to price, others not so much. You can always look at the historical price of an object back when we were actually on a bi metallic standard, or a gold standard, and see what the price might be, depending upon supply and demand of particular goods. Gasoline for instance, is easy to price in silver, as it hasn't changed. A silver quarter (pre '65) will still buy you a gallon today, same as it did then. Oil same thing. People will adapt. Most people in the world today need two tenths of an ounce of silver to live, and that has held to be the case since biblical times. By live, I don't mean the US definition of "live", I mean put food on the table and shelter over your head type live.

Examples are rife with monetary systems that have collapsed and metals or other goods-or even FRN$'s, have been used to trade, rather than the local currency. The problem this time around is that the FRN$, the reserve currency of the world, is the one that is going to be the one collapsing, or not accepted in trade.

This is already happening as many of our trading partners are making deals with each other for direct settlement of trade with their local currencies, or for gold and bypassing the FRN$.

Russia, RSA, Brazil, Australia, Japan, NZ, and some important players in the Middle East have all created agreements with the Chinese for settling trades bypassing the FRN$, as they see the abuse that is being heaped upon it by its issuers. What this means is that all of those FRN$'s which were needed in the past will not be, and will be coming home to roost, bringing with it price inflation on a Zimbabwean scale.

I love it when the Fed says that inflation is "well anchored". Yes, I would agree; it's well anchored on the print to the moon side, and the inflation has already occurred even should they stop creating FRN's today. That inflation only needs a little velocity to start the prices of goods rising, and I would maintain that it already has if you look at food and fuel, which of course the Fed and BLS ex out of their calculations of CPI.

As to what type of metals to hold, I prefer coins, especially pre '65 silver, silver rounds, and silver Eagles, Maples, and other national mint coins. I like gold coins too, rather than bars, and just about any national mint coin will do, though some are softer than others and easily dented/scratched. Maples come to mind in that regard. They are all easily recognized, and hard to counterfeit. The silver is the day to day transactional metal, and the gold is wealth preservation metal. I recommend having a position in the physical metals in coin form as a type of financial insurance. They will never be worth nothing, and if the worst does happen, as fourth grade math shows that it will, then you have protected yourself from the worst of it.

IRT the 1933 PEO 6102/6260 issued by everyone's hero FDR, it made gold coinage/bullion illegal for US citizens to hold in more than 5 ounce quantities, unless you were a jeweller or dentist, and .gov paid you $20.67/ozT when you turned it in. If you didn't turn it in, and were caught with it in your possession after October '33, it was a 10 year prison sentence and a $10,000 fine. It was AFTER this was issued and in 1934 that FDR and his merry band of fascists arbitrarily decided to revalue gold upwards to $35/ozT, thus giving .gov more dollars to spend and stealing from the public twice, once by taking their gold, and once through inflation. So yes it was stealing, and the theft continues to this day, except that they no longer have to have any gold to do so, just a computer keyboard to enter some digits.

I would be more concerned over a theft of your bank accounts, IRA's and 401k's by .gov than I would another theft of gold, as they are much easier targets, and the "legal" ability to do so is in the language of Dodd-Frank Title II. Even before Cypress, our FDIC and the Bank of England met and the FDIC "found" a way to "bail in" a SIFI using anything not nailed down, and some things that supposedly are, including deposits and other unsecured creditors. This paper came out on 10Dec12, and is available on the FDIC site under the title "Resolving Globally Active, Systemically Important,Financial Institutions.

To confiscate gold again, it would take a door to door search, which likely would be met with force, as most holders of metals also have large quantities of other metals as well, and would likely use them as a deterrent against theft of their property.

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ΜΟΛΩΝ ΛΑΒΕ